Proposed casino could bring Las Vegas to the Potomac

It's not hard, after visiting National Harbor, to see what the fuss is all about.

The sprawling, gleaming development along the Potomac River in Prince George's County boasts expensive stores, a half-dozen hotels, highway access and convention traffic — a combination that has sold many on the idea that it could become Maryland's most lucrative casino location.

"On the East Coast, this would be the best site," said County Executive Rushern Baker, who adds that he is otherwise no fan of casino gambling. "If we did not have National Harbor, I would not be supporting it. I don't think it would be worth the investment."

Jon Peterson, a principal in the family-owned company that is developing National Harbor, envisions a casino on a slope leading to the Potomac. The site is about a mile from the offices, shops and residences of "downtown" National Harbor, and it's not hard to envision future gamblers drawn from around the world pausing to notice a spectacular sunset before doubling down on the next bet.

But National Harbor's strength — a location considered by many to be ideal for capturing revenue from out-of-state gamblers — is also a political drawback. Some Maryland competitors fear its potential as a money magnet, and they are fighting efforts to win General Assembly approval for a casino site there.

The impact of National Harbor on Maryland's program of raising revenue from gambling will be one of the main topics studied next month by a task force appointed by Gov. Martin O'Malley. And the group's recommendations are likely to be felt in Baltimore, Anne Arundel County and the three other casino sites already approved by the state.

Proponents of the site just south of the Woodrow Wilson Bridge — led by Baker and Senate President Thomas V. Mike Miller — contend that the impact of competition from National Harbor can be offset by cutting Maryland's high gambling tax, and by permitting table games at all casinos in the state.

But the Cordish Cos., owner of the company that will open the Maryland Live! Casino at Arundel Mills on June 6, vehemently disagrees. Joe Weinberg, president of its gaming and resorts division, said it would be "insane" to add a new gambling site in Maryland.

Weinberg said that when Cordish bid on the Arundel Mills site — and poured hundreds of millions of dollars into it — the business plan assumed it would draw millions of customers from casino-free Northern Virginia and Washington. A mega-casino in Prince George's County would siphon off many of those gamblers and "crown Maryland as one of the most oversaturated casino markets in North America," he said.

In Baltimore, both Mayor Stephanie Rawlings-Blake and Caesars Entertainment, the sole candidate for a slots license downtown, have expressed support for a National Harbor site in exchange for permission to add table games. Still, some city lawmakers are concerned that competition from National Harbor would harm the casino planned just south of M&T Bank Stadium.

If the panel can reach a consensus likely to win legislative approval, O'Malley plans to call a special legislative session for July 9 to pass a gambling expansion bill that could put the issue on November's ballot. But agreement is by no means a foregone conclusion.

The potential casino site at the heart of the dispute is a place many Baltimore-area residents have never visited. But National Harbor, which opened in 2008, has echoes of Baltimore's Harbor East, another fast-growing development on a long-ignored slice of land.

So far, developers have marketed it primarily to tourists, conventioneers and Washington-area day-trippers rather than to the broader Mid-Atlantic market.

That could soon change, however. Peterson Cos., the Fairfax, Va.-based company that is developing the complex, plans to step up efforts to sell National Harbor to residents of Baltimore and other parts of the region as a destination for "stay-cations" — long before the first slot machine "ka-ching" could be heard.

Visitors from Baltimore would discover a mixed-use complex anchored by the cavernous, 450,000-square-foot Gaylord National Resort & Convention Center and its 18-story atrium, familiar stores such as South Moon Under and Jos. A. Bank, as well as a marina.

Still in the early stages of its development, National Harbor is sleek, impeccably clean and well-isolated from the grittier areas of Maryland's second-largest county. What it lacks in historical charm can be remedied by a water-taxi trip to Old Town Alexandria or Georgetown.

Peterson said his company isn't depending on a casino to make the project work. It is, he said, already a success.

"We're becoming the destination location — both for the conventioneers and the tourists," said Peterson, the 49-year-old son of family patriarch Milton Peterson.

That's not to say Peterson Cos. is not intensely interested in developing a casino on the site — if it can do so on its own terms. The elder Peterson traveled to Annapolis this year to make a pitch for a National Harbor casino that would rival the glitzy palaces in Las Vegas. The company has no interest in a downscale "slots barn," he said.

That's part of the attraction for Baker, who has said a study commissioned by his administration shows that National Harbor would depend less on gambling by county residents and generate more revenue from out-of-state visitors than a rival site at Rosecroft Raceway. He has estimated that the site could add $69 million in annual revenue for the county and provide 5,000 permanent jobs.

The downside is that to raise the estimated $1 billion needed to build a luxury casino, National Harbor might have to persuade lawmakers to cut the existing 67 percent tax rate on slots machine proceeds by roughly half. That could be a tough sell just months after the state raised income taxes on about 14 percent of Maryland households.

The complex first opened in 2008, and four years later it offers visitors about 30 dining options, including the luxury Old Hickory Steakhouse, Bobby McKey's dueling piano bar and Nando's PERi-PERi, a specialist in Portuguese flame-broiled chicken. The 40 shops include the House of JonLei Atelier bridal salon, the upscale Tiki & Me pet accessories store and Peeps & Company, the first retail outlet in the nation devoted to the iconic marshmallow candy.

National Harbor's start goes back about 16 years, when the Peterson family acquired the 350-acre tract. It sat on an artificial cove created by the flooding of a former gravel pit, in the shadow of what was then a crumbling bridge with a reputation as the worst bottleneck on the Capital Beltway.

Jon Peterson said his father saw the potential, however. And once the old bridge was replaced and highway connections improved over the past decade, the location became National Harbor's biggest selling point.

The complex opened after more than a decade of wrangling with local residents and environmentalists. Some opponents feared it would contribute to the degradation of the river; others were suspicious that it would bring little but congestion to the middle-class neighborhoods nearby. Even before ground was broken, there were fears that the development was a stalking horse for a casino.

The Prince George's County government, however, has seen National Harbor as a source of revenue and jobs. Equally important has been the pride factor in a county that has existed in the shadow of Washington, Montgomery County and Northern Virginia. Residents had long been rankled by a lack of high-end stores and restaurants in the richest African-American majority county in the nation.

Baker said the early opposition to National Harbor has evaporated. "The county's taken to it like gangbusters," he said.

Del. Aisha Braveboy, a Democrat who represents a nearby district, agreed that county residents take pride in the destination. But she is one of several local elected officials who do not share the view that a casino would make it even better.

"For years, National Harbor has been promoted as a family-friendly destination," she said. "We need to keep that brand for National Harbor. I don't think that putting a casino down there is going to lend itself to maintaining that brand."

But Del. Jay Walker, a Democrat from the district that includes National Harbor, said that if voters approve, he's in favor of allowing a casino. "I think it would raise a tremendous amount of money for the state of Maryland in terms of capturing [out-of-state] revenue."

National Harbor's owners say they are not sweating the outcome of O'Malley's gambling task force or a possible legislative special session. Peterson said that if the General Assembly doesn't pass a bill putting the casino question on this year's ballot, the site might still be available in 2014, the next time Marylanders could vote on the issue. Or it might not.

"We've got a lot of things we can move on and do," he said. "We know that good things are going to come to National Harbor."

Baltimore Sun reporter Annie Linskey contributed to this article.


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