Official: Keeping Marriott International in Montgomery is a ‘Must-Win’ for County

Official: Keeping Marriott International in Montgomery is a ‘Must-Win’ for County

The acting director of the county's economic development department says the county is intent on keeping the headquarters of the hotel giant

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The Marriott Corporate Headquarters on Fernwood Road in Bethesda

via Google Maps

Montgomery County officials are in the midst of a comprehensive effort to keep Marriott International’s headquarters in the county.

Sally Sternbach, acting director of the county’s Department of Economic Development, said it’s the number one business retention project her department is working on. She said the department is coordinating closely with the county executive’s office.

Sternbach described the effort as “a marathon and not a sprint.” The company’s lease in Bethesda expires in 2022. Although the expiration is seven years away, there’s a sense of urgency among county officials. She said the company may choose the jurisdiction where it wants to locate its corporate headquarters within the next few years.

“We have a government that’s intent on making [Marriott] feel welcome here and making it impossible for them to say no,” Sternbach said.

At the beginning of March, Marriott CEO Arne Sorenson told The Washington Post the company had plans to relocate in the region and that it was looking for a location that’s Metro accessible and more urban.

The announcement generated instant speculation about where the company, which employs 2,000 people at its 900,000-square-foot suburban headquarters on Fernwood Road, would relocate. Washington Business Journal proposed several possible locations, mostly in Washington, D.C., and Northern Virginia, such as Union Station, the Navy Yard, Tysons Corner and Rosslyn.

But Sternbach says the county has a big advantage over neighboring jurisdictions—the fact that Marriott’s employees have already built their lives around commuting to the Bethesda headquarters.

“You shift that center with great care,” Sternbach said. “Your employees are your most important resources. Work-life balance issues play a huge role in how far employees can and will go, regardless of how long they’ve been employed there.”

She said the county also has qualities the company desires—such as “a rich transportation system” that she says will be improved by the construction of the light-rail Purple Line, and plans to build a bus rapid transit network to better connect urbanizing areas including White Flint and the I-270 Technology Corridor.

When asked if the county has identified specific locations—such as the developing White Flint/Pike District area—as a possible new home for the hotel company, Sternbach declined to divulge that level of detail.

“We’ll be willing to talk to any developer with sites that are appropriate,” Sternbach said, mentioning Metro-accessible sites in particular. She said the company would likely be interested in a headquarters with about 750,000 to 800,000 square feet—slightly smaller than its current location.

“The building [Marriott] is in right now was built to be self-contained—it’s amenity rich with food, shops, and daycare—these are things that if you’re in a vibrant area, on top of Metro, you don’t need to build yourself,” Sternbach said.

Already, developers in the White Flint/Pike District are positioning themselves to land the company. At a Friends of White Flint meeting in March, Brian Downie, senior vice president of Saul Centers, said, “This might be the single best thing that can be done to really kick off White Flint and turn it into what we’d like to see it be,” according to a Bethesda Now report. Saul Centers is developing four residential buildings near the White Flint Metro station.

Friends of White Flint—a group of residents, developers and businesses dedicated to guiding the implementation of the White Flint Sector Plan—agreed at the March meeting to form a task force to help pitch the area to Marriott.

From a crystal ball perspective, the Pike District would seem an ideal location for the company—the county’s sector plan calls for developing the area over the next two decades into a walkable, millennial-attracting mix of restaurants, shops, apartments, condos, businesses and entertainment hotspots complete with a bus rapid transit system and a Metro stop. Already, Federal Realty’s Pike & Rose, with its mix of luxury apartments, office space, restaurants and entertainment venues including iPic Theaters and the AMP by Strathmore music venue offers a preview of what could be coming for the area. Washingtonian featured White Flint as one of four projects that are going to change the Washington metropolitan area in the future.

Nonetheless, the competition for the Fortune 500 Company will be fierce. Sorenson, the Marriott CEO, told the Post he’s already had informal discussions with Virginia Gov. Terry McAuliffe and D.C. officials about the company’s plans to relocate. Maryland Gov. Larry Hogan, who campaigned last fall on a pitch  to attract more business to the state, faces a test in keeping one of its most prominent companies from leaving.

Sternbach said the county is working closely with Hogan’s staff and the Maryland Department of Business and Economic Development on negotiating with Marriott. Incentives could be part of those negotiations. Sternbach said tax breaks or other incentives are part of the “toolbox” being used to help make the county more attractive.

“Will [incentives] be considered? Yes. It was in the past, it will be in the future,” Sternbach said.

Details about what those incentives may be will likely be a closely-guarded secret. Revealing them could provide Virginia, D.C. or other jurisdictions competing for the company’s attention the opportunity to make their own offers more lucrative. In the late 1990s, Maryland provided more than $50 million in incentives to keep the hotel company in Montgomery when it considered moving to Northern Virginia, according to the Post.

Sternbach said the timeline for the move will depend on the direction company leaders choose to take the company.

“There’s just a very general idea of how this will play out at this point,” Sternbach said. “It’s presumptive of anybody, other than the people at Marriott to talk about this project in terms of what it looks like. We want to work with them on their terms and on their timeline.”

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