Hotel chain stirs anger; Lawmakers bridle at tax breaks Marriott seeks to stay in Md.; 'Trying to gouge us'


With Marriott International Inc. pushing for more financial enticements from the state government and Montgomery County to keep its corporate headquarters in Maryland, several lawmakers said yesterday that the company's demands go too far.

Some lawmakers from Montgomery County even said the state should stop negotiating, and dared the giant hotel-management firm to follow through on its threat and move to Virginia.

"I think they're trying to gouge us," said Del. Michael R. Gordon, a Montgomery Democrat. "Let them go to Virginia. Let them have the congestion. We have 1.9 percent unemployment in the county. We can make up the difference."

Gordon and many other lawmakers in Annapolis objected to Marriott's request to state and local officials this week for additional tax relief as they weigh a choice of expanding in Maryland or relocating to Fairfax County, Va.

The company pressed a counter-offer seeking a break in the $1.3 million in annual property taxes Marriott pays on its current Bethesda headquarters, government sources said.

Previously, the focus of the talks between Marriott and state and county officials had been on tax breaks associated with either a proposed $150 million new headquarters in Rockville or a $90 million renovation and addition to its current Bethesda complex, sources said.

Some legislators said it would set an unwise -- and expensive -- precedent to grant tax breaks on an existing building.

"They've been a good corporate neighbor and we want to work with them and keep them," said Senate President Thomas V. Mike Miller. "But this latest proposal, that they need tax breaks on existing buildings, could be a deal breaker."

The state and county have proposed a package of tax credits, loans, grants and other assistance valued at more than $50 million, according to sources familiar with it.

Whether Marriott expands at a new site or refurbishes its current location, the company is expected to add up to 700 new jobs to its current work force of 3,000 in the county.

Spokesmen for both Marriott and the Maryland Department of Business and Economic Development declined to comment on the negotiations.

Montgomery County Executive Douglas M. Duncan spent much of yesterday explaining the latest turn in negotiations to legislators, downplaying Marriott's property tax proposal, lawmakers said.

In an interview, Duncan declined to discuss specifics of the bargaining but said he remained optimistic. "We are in active negotiations with Marriott," he said.

House Speaker Casper R. Taylor Jr., who was among those briefed by Duncan, said that nothing in Marriott's proposal gave him pause.

"Based on what I have been told by the county executive, I am still very strongly supporting accommodating Marriott because of the increase of 700 new jobs and the capital investments," Taylor said.

He added that Maryland was caught in the same bind as many states that are competing feverishly with each other for new or expanded business.

Historically, economic development incentives have been linked to significant, new capital investment by companies.

In recent years, though, many employers have gotten incentives without building big new facilities, said Howard Singer, a consultant specializing in corporate location for Grant Thornton, a large accounting and consulting firm based in Chicago.

"It used to be based totally on how much capital you're going to invest," Singer said.

"To a certain extent, that's changing. What economic development people are looking for is not just the capital intensity of the project, but what is the economic impact of the project. Tell me how many people you're going to employ and how they will help the local economy."

Incentives these days are often tied to new jobs or even retaining existing jobs, Singer said, and it's not unheard of for employers threatening to move to receive tax discounts on existing real estate.

Staff writer Gady A. Epstein contributed to this article.

Pub Date: 2/25/99

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