BETHESDA -- Marriott International Inc., armed with $44 million in state aid, will spend $85 million to refurbish and expand its headquarters here in an effort to alleviate overcrowding and to accommodate an anticipated 700 new employees, the company announced yesterday.
The hotel giant ended months of speculation about its headquarters, after the company pledged in March that its primary base would remain in Montgomery County. In deciding to stay put, Marriott passed over other sites in Bethesda and Rockville.
"We concluded that staying here made economic sense for the company and was more convenient for our associates," said J. W. Marriott Jr., chairman and chief executive officer.
The additional employees would bring to 4,200 the number of Marriott workers at its headquarters. Marriott said it will need the employees as part of a plan to add 1,000 hotels to its management lodging system by 2004. The company operates 1,900 hotels and related projects in the United States and 55 other countries.
Within the next five years, Marriott intends to add a 250,000-square-foot building to its 10400 Fernwood Road headquarters. It will modernize and renovate its existing 865,000-square-foot building, a six-story structure that has been home to the company since May 1979, and add hundreds of parking spaces.
Marriott, which in its 1998 fiscal year generated sales of $8 billion, will offset the costs to construct and expand its headquarters with $44 million in state and county financial incentives. That pledge stirred controversy when The Sun reported that the company had bargained for the incentives even after it had rejected a move to Virginia but then concealed the plan from Maryland officials.
Additionally, state transportation officials have pledged to coordinate about $30 million worth of construction of Interstate 270 and nearby road improvements with Marriott's building, upgrades that are expected to ease traffic jams in and around the Rock Spring Office Park, where Marriott is located.
State leaders and economic development executives said the incentives and road improvements are justified because of Marriott's stature and because of its employment growth.
Last year, Marriott paid wages and benefits to its Maryland employees of $440 million, and paid $20 million in state and local taxes.
"Marriott's contributions to the county over the years have generated a wellspring of affection and support for the company, and the economic engine fueled by Marriott will help lead a strong and vibrant Montgomery County forward for years to come," said Montgomery County Executive Douglas M. Duncan.
"We are extremely proud to call Marriott and all of its associates one of our own," he said.
J. W. Marriott told employees packed into the company's cafeteria that it has had its headquarters in Montgomery County since 1955.
"This is where we have worked together, grown together, where we have built a global hospitality company," Marriott said. "We will provide you with a great workplace."
Marriott will sign a lease with its New York landlord to remain in the newly expanded building through 2024.
The planned improvements will mark the third time Marriott has renovated or expanded its headquarters since it opened two decades ago.