National Harbor Seeks More Public Cash

The Prince George's County Council will consider additional public dollars for the $2 billion National Harbor development, where construction is already well underway.

Under a proposal presented to the council yesterday, the county would float $35 million in bonds to pay for improvements at the Potomac riverbank complex and then levy a 5 percent tax on hotel rooms at National Harbor in Oxon Hill to pay off the debt.

The bonds could be used for "public facilities and improvements" at the 300-acre development, including streets and sidewalks, a plaza, entrance features, security, piers on the river and public art.

If approved, it would be the latest bond package for the development, which is the largest in county history and is to include office space, houses, condominiums, stores, restaurants and six hotels.

Three years ago, the council agreed to issue $160 million in bonds for National Harbor, intended for roads, sewers and other infrastructure, as a condition of the agreement with the Peterson Cos. to develop the massive project.

Then last summer, the council agreed to a $50 million bond package for the Gaylord National Resort and Convention Center, a deal that imposed a similar 5 percent tax on the 2,000-room hotel to be the development's centerpiece. The Peterson firm said that most of the bonds approved so far go toward improvements of the Gaylord portion of the project and that it needs more money for additional enhancements elsewhere on the site.

Council member Tony Knotts (D-Temple Hills), who represents the National Harbor area and is sponsoring the bond legislation, said the bill is intended to create parity for the other hotels envisioned for the development by imposing a similar tax on their rooms. The new tax would not apply to the Gaylord hotel.

He said that tourists who don't live in the county would pay the tax and that it would be used for the upkeep of a project that includes the kind of high-end stores and restaurants residents have long sought for the county.

"We're all stakeholders in this," he said.

The proposal would also need County Executive Jack B. Johnson's approval to become law. Spokesman John Erzen said Johnson is still reviewing the legislation and declined to comment further.

The introduction of Knotts's bill yesterday began the legislative process. The measure would need approval from a council committee and the full council, as well as a public hearing.

Prince George's already imposes a 5 percent hotel tax countywide and uses the revenue to promote tourism and for local services. The National Harbor tax would be an additional 5 percent. In 2002, the Maryland General Assembly granted counties the ability to use hotel taxes to help developers pay for improvements, said Alan C. Cason, a lawyer who represents Peterson.

Cason argued that the tax was not "public money in any way" because "it's either use it for the project or you don't have the ability to levy it all."

He said the funds would ensure the best possible project, enabling it to draw more customers who would help expand the county's tax base.

"Most people believe the nicer and the more enhancements at National Harbor, the better it is for the county," he said.

When Gaylord was granted a similar deal last summer, however, a council hearing was packed with residents who argued the company should be asked to make concessions in exchange for the public help. After intense negotiations, the council agreed to the package only after strengthening the requirements for minority business participation.

Arthur A. Turner Jr., a community activist who helped lead that effort, said he hopes the council conducts similar talks with Peterson before voting on the deal.

"We all support National Harbor and are very proud of it, except at some point we have to say no," he said. "At some point, we have to tell them the deal is what it is and now you make it work. You can't drive your Brink's truck up to the [county executive's offices] anymore."

The first phase of National Harbor, including the Gaylord hotel and some restaurants, is scheduled to open in 2008.