Marriott Agrees to Smaller Hotel

By Alejandro Lazo and Dana Hedgpeth
Washington Post Staff Writers and Washington Post Staff Writers
Saturday, September 22, 2007

Marriott International yesterday agreed to pursue a scaled-back version of a headquarters hotel at the District's new convention center, putting the project back on track after months of delays.

The deal, penned in a memorandum of understanding among the mayor's office, Marriott and the Washington Convention Center Authority, would put a hotel of about 1,150 rooms on two acres, part of which is owned by the city and the rest by Kingdon Gould III, a developer.

The city has been in negotiations to swap the land with Gould for land the city owns at the old convention center site, at Ninth Street and New York Avenue NW. Gould expressed confidence that a deal could be reached.

"It's the actual swapping of the land that has got to get done, and I don't think there is anything that would keep that from happening," Gould said. "We are not a problem."

Marriott and RLJ Development, the hotel company started by BET founder Robert L. Johnson, had been planning to build the District's biggest hotel, with 1,400 rooms, at Ninth Street and Massachusetts Avenue NW, across from the convention center.

The District has long argued that a headquarters hotel is necessary to compete for the largest and most prominent conventions. The convention center authority said it has spent $2.6 million trying to bring the project to fruition, only to hit many snags.

Less than two weeks ago, the deal appeared to be in jeopardy after Johnson and his team of negotiators requested additional funding from the District. They said extra subsidies were needed because the construction costs were rising and the commercial real estate industry was weathering a global credit crunch, according to sources familiar with the deal. The sources spoke on the condition of anonymity because they were not authorized to comment publicly.

On Wednesday, J.W. "Bill" Marriott Jr. made a personal commitment to Mayor Adrian M. Fenty (D) that his company would take a lead in negotiations with the city and the convention center authority, one of the sources said. The commitment is considered to be an important one to Marriott, who grew up in the Washington area and whose company is based in Bethesda.

The latest agreement would include 100,000 square feet of meeting and ballroom space. A plan to put additional space under the hotel was scrapped, saving the project an estimated $100 million.

The deal also includes an agreement in which the convention center can block out 80 percent of the rooms when making bookings.

"We are very pleased that we have reached both a room-block agreement and an agreement on all principal business terms with the city and the WCCA to develop a headquarters hotel," said Roger Conner, a Marriott spokesman.

The D.C. Council had pressured the city to complete the terms of the deal. D.C. Council member Jack Evans (D-Ward 2), a long-time supporter of building a convention center hotel, in recent weeks recommended to the mayor that the District pull the plug on the Ninth Street site.

He had proposed putting a hotel on part of the old convention center site, where a 1.5 million-square-foot project of housing, retail and office buildings is planned.

Council member Kwame R. Brown (D-At Large), chair of the Committee on Economic Development, had called a public oversight hearing for Oct. 15.

Staff writer Michael S. Rosenwald contributed to this report.

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