Liquor Board Wants A Pricier License
By Rosalind S. Helderman
Washington Post Staff Writer
Friday, September 21, 2007
The hotel that will anchor the $2 billion National Harbor development has failed to secure permission to serve alcohol because the Prince George's County liquor board is insisting on a new state law that would create a substantially more expensive license for the project.
The Gaylord National Resort and Convention Center has asked a judge to step in to compel the five-member Prince George's County Board of License Commissioners to issue the $800 million resort a liquor permit before its April opening.
Gaylord applied for a license that has a $2,750 annual fee. The liquor board denies that the fee is the cause of the license delay. But in a public hearing, its chairman suggested that an annual payment ranging from $18,000 to $50,000 would be appropriate because of the size of the project.
A bill that failed to pass in the General Assembly this year would have allowed the county to charge a $5,000 annual fee, plus $500 for each restaurant within the hotel.
In court papers, Gaylord's attorneys argue that failure to get a license for its eight restaurants and bars, 2,000 rooms and 10 acres of meeting space by the hotel's opening date would have a "devastating impact" on one of the largest developments in Maryland history.
Gaylord's court filing opens a window into the sometimes hardball and often secretive world of Prince George's politics. The Nashville-based chain alleges that the board has blocked the license in part because it hopes to wrest higher fees from the hotel giant.
The liquor board insists that the county simply has no class of permit appropriate for the massive hotel. Although enthusiastic about the economic impact of the project, the liquor board has consistently told Gaylord it needs General Assembly action, the board's attorney argues in court papers.
Board lawyer Edmond B. O'Connell declined to comment, as did Chairman Franklin D. Jackson and one of Gaylord attorney's, Linda C. Carter.
The legislation to create a license for the project did not pass in part because of infighting among county lawmakers. Legislators who represent the National Harbor area refused to back the bill largely because it was sponsored by a delegate from a different part of the county.
County Executive Jack B. Johnson (D) said he was "absolutely appalled" and "embarrassed" over the situation, accusing other politicians of holding up what he said should be a routine approval. "People need to stop playing games with this economic engine," he said.
In the court documents, Gaylord highlighted the millions it is spending at what will be the largest convention hotel on the Eastern Seaboard.
According to court documents, the hotel's signature restaurant will be the $3.7 million Old Hickory Steakhouse, designed to resemble a Georgetown rowhouse, where as many as 212 diners will be tended by wine and cheese sommeliers. There will be a sports bar with a 50-foot LCD screen displaying 12 games at once, an Italian eatery, a seafood restaurant and a penthouse nightclub called Pose.
More than 900,000 room nights have been booked at the hotel and, according to the filing, the facility has booked a January 2009 party for 15,000 people.
None of that can proceed without a liquor license.
"No major hotel chain is going to operate without all the major permits," said M.H. Jim Estepp, the president and chief executive of the Greater Prince George's Business Roundtable.
Estepp, who is also a former chairman of the County Council, called the liquor license process in Prince George's "one of the most political of any aspect of government," one in which deference is often paid to the desires of local senators. The liquor board's members are nominated by the governor but must be confirmed by the state Senate. Estepp said he was surprised National Harbor and Gaylord did not first approach the lawmakers who represent the southern Prince George's development.
"It's important for the players, who are not novices in the political process, to recognize what the local norms are," he said.
According to a narrative of events in the court documents, Gaylord first applied in December for a class of license reserved for luxury restaurants.
At the time, three other county hotels operated with the same kind of license Gaylord sought.
A transcript from a February hearing shows that board members reacted with enthusiasm to the project. However, they indicated that the bill then under consideration by the General Assembly to create a waterfront entertainment complex permit would be the best route to a license. Other large projects in Prince George's, including the Redskins stadium, operate using licenses that were created specifically for them by the legislature.
During the hearing, Jackson, the board chairman, said he was "foremost concerned" that the license fee be appropriate, suggesting a yearly fee ranging from $18,000 to $50,000.
Still, at the conclusion of the meeting, the board voted unanimously that it would "be in favor of rewarding an appropriate license to the facility pending outcome of what happens in the legislative session."
"Congratulations," Jackson told Gaylord's representatives.
The board has not reviewed the matter since then, nor has it issued a license. Gaylord argues that the board's failure to act means it has illegally gone back on the February decision that the hotel chain met the requirements for a license of some kind. The board counters it had agreed to issue the new waterfront license only once it was created by the legislature.
From court documents, it also appears the board tried to dislodge political opposition to the bill.
Jackson wrote an e-mail to state Sen. C. Anthony Muse (D-Prince George's) in March explaining that the board felt a bill creating a special license was a necessity for Gaylord. He also contacted a Gaylord executive and called the company's lawyer at home, urging them to lobby lawmakers for its passage. But the bill failed to receive support from other Prince George's delegates.
"It's a matter of legislative courtesy -- you know someone represents a district, you go to them first," said Del. Barbara A. Frush (D-Prince George's), chairwoman of the group.
Del. Marvin E. Holmes Jr. (D-Prince George's), a representative from central Prince George's who sponsored the bill, said National Harbor officials asked him to sponsor the bill because the issue came up during last year's election season, when it was not yet clear who would be elected from southern Prince George's.
Del. Veronica L. Turner (D-Prince George's), who represents the Oxon Hill area, where the National Harbor development is located, and who opposed the initial bill, said she plans to meet with National Harbor lobbyist Michael Arrington soon to talk about a bill that could be considered by the legislature when it meets in January. With the hotel scheduled to open in April, Gaylord would have a relatively short window of time before the April 7 end of the session.
Turner said her first hurdle will be to convince Muse, a prominent pastor, to sign on. A first-term senator, Muse won election last year even though Johnson, with whom Arrington is close, supported his opponent.
Arrington did not respond to a request for comment. Muse also declined to be interviewed but said through a spokeswoman that he is working with National Harbor to meet the community's needs.
A Prince George's judge is scheduled to hear arguments for the legal review of the board's actions Oct. 19.
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