BALTIMORE _ Marriott International said Tuesday it plans to commission new offices for its headquarters and build a hotel in downtown Bethesda, Md., keeping its base in the state after securing state and county incentives worth about $60 million.
The announcement from the firm, which had been based in Maryland for more than 60 years, ends more than a year of speculation and jockeying with nearby jurisdictions over whether the global hotel giant would relocate when its lease at its Bethesda campus expires in 2022.
Losing Marriott, one of the state's four Fortune 500 companies, would have been a major blow for Gov. Larry Hogan, who placed the economy and keeping corporate giants like Marriott at the center of his campaign for governor two years ago.
"Marriott is a world-class company with deep roots in our state, and their decision to continue growing their business right here in Maryland is tremendous news," Hogan said in a statement.
Marriott expects to spend about $600 million on a build-to-suit complex that will include about 700,000 square feet of leased office space for its headquarters, said Carolyn Handlon, an executive vice president and global treasurer for Marriott. A 200-plus room Marriott-branded hotel also will be built on the site.
Handlon said the firm is reviewing proposals from developers and plans to settle on a precise location in the first half of next year. She called downtown Bethesda a good fit for the firm, which was looking for proximity to the metro and a walkable urban environment.
The new facility is expected to house about 3,500 people, the same number as currently work at the headquarters. A move will allow the firm to downsize from the roughly 1 million square feet Marriott leases at its campus and other locations.
The incentives played a role in the decision, Handlon said.
The state agreed to provide $22 million in loans, which can be forgiven if the company follows through on its intended investment and retains 3,500 workers for 10 years. The first loan disbursement is expected in July 2018, said Karen Glenn Hood, a spokeswoman for the Maryland Department of Commerce.
Montgomery County, home of Bethesda, also agreed to provide a $22 million conditional grant from its economic development fund and committed to providing 1,200 parking spaces for the new Marriott complex, said Patrick Lacefield, a county spokesman. (The firm would pay the county $40 million for the parking over 20 years, he said.)
Marriott, which employed more than 10,000 people statewide at its hotels and corporate headquarters last year, also is expected to be eligible for $15 million to $18 million in state and county tax credits related to the new facility.
The $20 million loan through the state's Sunny Day program would be one of the largest in the program's history if it moves forward. Such loans require legislative approval. The conditions of the loan do not require the firm to add jobs at the headquarters, despite a recently completed merger with Starwood Hotels & Resorts.
Marriott has been a recipient of state incentives before.
In 1999, state officials announced a $12.5 million forgivable loan for the firm, which employed about 3,500 people at the time and was supposed to add 700 more. That never happened, so the state ended up reducing its assistance to $9 million.
Lacefield said the earlier deal did not involve construction of a new facility.
"This is always a competitive situation within the region," Lacefield said. "We obviously wanted very much to have that investment here and we're happy for it."
