Gaylord Entertainment will withdraw plans to build a 500-room, $133 million expansion of its hotel and convention center at the National Harbor unless the Prince George’s County Council drops millions in potential penalties tied to minority-owned business participation, according to a letter obtained by The Examiner.
The move would cost the county more than $5 million in taxes on the Potomac River project and, according to Gaylord, tens of thousands of visitors each year as well as 200 permanent hotel jobs.
In the letter dated Thursday, a senior vice president of Gaylord Entertainment wrote Council Chairman Tom Dernoga that the Nashville, Tenn.-based company felt withholding any part of $50 million in bonds was “unfair and inappropriate” and a “punitive punishment.”
“We are unaware of such an extreme approach to penalties in the County’s contractual dealings on other matters,” wrote Bennett Westbrook. “Gaylord will use its best efforts to meet the County’s new MBE requirements because we honor our commitments and walk our talk.”
Vice Chairwoman Camille Exum, D-District 7, of Laurel, said Friday that Gaylord has met requirements tohire local businesses, but not minority firms. The council is serious about minority business involvement, she said, and is ready to vote on the legislation Tuesday.
“It’s nothing to negotiate,” Exum said. “We’re interested in putting teeth into the minority business provision.”
The latest draft of legislation calls for Gaylord to use at least 15 percent minority-owned businesses during the construction and operation of the Gaylord National Hotel Convention Center expansion or lose up to half of the $50 million in bonds.
Westbrook wrote that Gaylord prides itself on being a diversity-sensitive company but restrictions would make the bonds “unmarketable to bond investors.” He said that local and minority businesses have 36 percent of the total amount of construction contracts through the beginning of June.
Gaylord announced in 2000 it would build at the National Harbor, a 300-acre site just south of the Capital Beltway on the banks of the Potomac River. A spokesman for Gaylord said construction is well under way on the original 1,500-room portion of the hotel and convention center with completion scheduled for the end of first quarter 2008.
“Construction has not yet begun on the additional 500 rooms,” said Brian Abrahamson.
At stake
Gaylord Entertainment outlined in a letter Thursday what would be lost if the company was forced to cut 500 rooms from its National Harbor hotel and convention center project due to potential financial penalties tied to minority-owned business participation.
» $133 million investment in the expansion
» 200 additional permanent hotel jobs as well as construction jobs
» $157 million in county taxes over 30 years
» Tens of thousands of visitors and conventioneers
» $1 million grant to Prince George’s Community College to create a hospitality program
» Continued opportunities for local-owned and minority-owned businesses
