Strife Sinks National Harbor Bill
Showdown Engulfs Liquor Licenses

By Rosalind S. Helderman, Ovetta Wiggins and Philip Rucker
Washington Post Staff Writers
Wednesday, April 9, 2008

A bill to create new liquor licenses for the massive National Harbor development in Prince George's County died in the waning hours of Maryland's legislative session Monday night, torpedoed amid heated arguments about minority contracting at the project that escalated into a showdown between Gov. Martin O'Malley and a state senator.

As negotiations broke down, National Harbor representatives requested that the bill be killed, preferring to let the projects' hotels and restaurants take their chances on navigating the standard liquor licensing process in front of the county's liquor board.

The bill's failure came as its sponsor, Sen. C. Anthony Muse (D-Prince George's), pushed amendments opposed by the developer. One confrontation between Muse and Senate President Thomas V. Mike Miller Jr. (D-Calvert) became so animated that their raised voices briefly attracted the attention of a state trooper, an observer said.

Then, late Monday afternoon, O'Malley (D) summoned county senators and County Executive Jack B. Johnson (D) to a closed-door meeting at the State House to try reach a compromise. According to numerous participants, O'Malley told Muse that his demands of the developer might be perceived as a "shakedown."

According to Sen. Ulysses Currie (D-Prince George's), Muse shot back, "Are you calling me a crook?"

"It was pretty rare and pretty uncomfortable," said Sen. Paul G. Pinsky (D-Prince George's), who was also present.

The bill would have allowed for 40 liquor licenses at National Harbor's entertainment complex on the Potomac riverfront, 20 of them to be issued by the county's liquor board in the next year. The bill also would have allowed liquor licenses at nightclubs that do not serve food, otherwise banned in the county, and alcohol at outdoor festivals for 120 days each year.

It failed after Muse, who represents the southern Prince George's district that includes the project, tried to wrest new commitments on minority contracting from developer Milton V. Peterson. The development, which includes condominiums, office and retail space, hotels and restaurants, is under construction and is scheduled to open in a couple of months.

As negotiations foundered, Muse proposed amending his bill to cap at seven the number of liquor licenses issued at the 300-acre development. He said the 40 sought by National Harbor were unnecessary and unprecedented.

In a letter to Muse, Peterson wrote that construction is underway on 18 restaurants and groundwork has begun on six others, including Ruth's Chris Steak House, McCormick & Schmick's Seafood and Rosa Mexicano. The cap would mean the project could not attract more high-quality restaurants, the letter said.

A compromise worked out at the tense meeting Monday afternoon among O'Malley and senators would have capped licenses at 13. Soon after, National Harbor representatives requested that the bill be killed.

The alternative licensing process available to restaurants and hotels might mute the impact of the bill's failure on the $4 billion project. But the experience left county politicians bruised, as some expressed concern about Peterson's commitment to minority contracting while Johnson and others fretted that the events could tarnish the county's business reputation.

In an interview, Muse said he had been working on behalf of minority business owners, some of whom say they have been shut out of the project.

He said he was disappointed to learn from a recent report delivered to the Prince George's County Council that, though Peterson has met a pledge to the county to give 30 percent of work to local or minority-owned businesses, only 12 of 361 contracts were issued to minority-owned businesses in the county.

"It was discouraging," he said. "I was trying to figure out how I was going to satisfy the contractors and Peterson."

Muse declined to comment on the meeting with O'Malley.

Johnson, meanwhile, argued that Peterson had met the minority business participation guidelines outlined with the county.

"I'm especially concerned that we don't get a reputation of being a hard county to work with," he said yesterday.

Peterson did not respond to requests for comment. But in a statement yesterday, National Harbor spokeswoman Bridget Graves said project officials were "grateful to the majority of Prince George's County Officials who have been overwhelmingly supportive of our success at National Harbor."

"We will continue to work with local officials to ensure that all the quality amenities coming to National Harbor will be able to obtain the necessary licenses," she said.

O'Malley spokesman Rick Abbruzzese said the governor remains "committed to doing all that he can to help promote National Harbor."

The dispute has no impact on the Gaylord National Resort and Convention Center, the 2,000-room centerpiece of National Harbor that opened last week. It is operating on a temporary liquor license, and approved legislation allows the hotel to seek a permanent license.

The dispute is the latest development in a souring relationship between some politicians and the developer of the largest project in county history. Many were upset by the minority participation numbers in the council report.

Then, two weeks ago, Peterson was quoted in a local newspaper as saying "people in Prince George's are always saying, 'We don't got no classy restaurants.' Well, you do now, sweetheart."

The comment, with its suggestion that county residents use incorrect grammar, was blasted by many residents and elected officials as racially insensitive. Del. Dereck E. Davis (D-Prince George's), chairman of the House Economic Matters Committee, likened the remark to "little more than verbal blackface," referring to racist minstrel shows. He said Peterson later told him and other lawmakers that he meant no offense.

Monday's unraveling of long-sought legislation -- a similar bill failed last year -- left some county politicians deeply concerned about elected leaders' inability to work out disputes.

"What took place was pathetic," Pinsky said.

Currie said it "reflects negatively on the state and Prince George's County."

Miller said, "It sets back the county light-years in terms of bringing economic development to Prince George's County."

Muse said he believes the procedure for awarding contracts needs to be reviewed to ensure fairness.

"I don't have the authority to form a committee, but I do think one that represents the community should be formed to look at the process," he said.