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State offers record deal to Marriott; 'Most aggressive' package is intended to keep headquarters; Loss 'would be devastating'; Incentives believed to top $50 million in various credits; Economic development


State economic development officials made the "largest and most aggressive" financial incentives offer in Maryland history yesterday to Marriott International Inc. in a bid to keep the hotel giant's headquarters and more than 3,700 employees in Montgomery County.

Although state and county officials refused to reveal specifics, sources with knowledge of the incentives offer said it is more than $50 million, a figure Marriott had indicated that it would require to stay in Maryland.

"It is a full and fair offer. It is the best offer the state of Maryland could make," said Richard C. Mike Lewin, secretary of the state's Department of Business and Economic Development.

"We're very interested in keeping this company in Maryland," Lewin said. "We have made the largest and most aggressive offer in our history to do so."

He said the incentive package, which is likely to evolve further before Marriott decides on a new headquarters location in March, includes a mixture of county property tax credits, training dollars, transportation enhancements and job-creation tax credits.

The package, presented at a morning meeting with Marriott, may also contain some state "Sunny Day" fund grants, sources said.

The incentive figures differ for each of three sites Marriott is evaluating in Montgomery County. But the largest single component in each package is property tax credits, which would come primarily from the county and could be spread over 15 years.

Marriott is considering sites in Maryland and Virginia for a new headquarters because business growth has made cramped the six-story building that the company has occupied for two decades. Its lease there expires in 2004. By then, Marriott expects to have an additional 750 headquarters workers. Marriott says it will require roughly 1.2 million square feet of office space, a little more than 50 percent more space than it occupies today, to house them all.

A new headquarters could cost the company up to $144 million.

"If the state loses Marriott, it will ruin any reputation it has as a business-friendly state for the next four to five years," said Montgomery County Executive Douglas M. Duncan. "It would be devastating for the county, for a company that grew up here and wants to stay here to leave. That's how seriously I take this. There would be international repercussions."

Marriott spokesman Nicholas A. Hill said the meeting with Maryland was part of "our ongoing discussions with them, which we are having with Virginia officials as well." He declined to comment on the incentive package.

The incentive package is greatly improved from the roughly $35 million that the state and Montgomery County offered to Marriott two weeks ago, but considerably less than the purported $70 million that the company was seeking.

Late last month, Marriott told state officials it would need a minimum of $51 million in incentives to maintain its headquarters in Maryland.

Virginia, which has lower corporate income and corporate personal property taxes, would save Marriott at least $42 million over the next 15 years.

Pub Date: 2/02/99

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