Council Approves $35 Million Bond Issue for National Harbor

After weeks of intense negotiations, the Prince George's County Council agreed yesterday to issue $35 million in bonds to pay for improvements at the National Harbor waterfront development in exchange for more work at the project for minority contractors from the county.

Under the agreement, Milton V. Peterson, the developer of the $4 billion project, promises to give at least 15 percent of the work from new construction to minority contractors in Prince George's. National Harbor would also provide $5 million to Prince George's Community College to help increase the number of minority contractors in the county and give at least 20 percent of the work from operations at the project to county-based minority contractors.

If Peterson does not meet the requirements, he will have to pay a $500,000 annual fine.

The bonds may be used for "public facilities and improvements," which include but are not limited to streets, sidewalks, promenades and public art. Under the proposal, the county will levy a 5 percent tax on hotel rooms to pay off the debt.

Andre Gingles, an attorney for National Harbor, said his client, who has sought the legislation for more than a year, was pleased with the bill's passage.

"We're obviously happy," Gingles said. "It means we'll have uniformity on the tax structure at National Harbor and be able to complete some of the infrastructure and amenities that make National Harbor a great place."

This is the third time the project has asked for public funds.

In 2004, the council approved a $160 million bond issue for National Harbor to pay for roads, sewers and other infrastructure. Two years later, it agreed to a $50 million bond deal for Gaylord National Resort and Convention Center to pay for improvements at the resort. That bond agreement imposed a 5 percent tax on the 2,000-room hotel. Gaylord would not be affected by the latest hotel tax.

"We're happy that they are setting terms and conditions before they release funds," said Sandy Pruitt, head of People for Change, a group pushing for more minority involvement in development projects. "We want to make sure they are enforced. . . . I think [National Harbor] will do a better job of reaching out because we're demanding it. More eyes are on them."

The council was supposed to consider the measure earlier this year but opted not to take action after questions were raised about the number of minority contractors.

Of the 361 contracts issued to build the development, 12 went to minority-owned businesses in Prince George's.

Peterson had promised to give 30 percent of the work at the project to local or minority-owned businesses; the county required a pledge of 20 percent. Peterson met the goal by turning to minority firms outside the county or white-owned businesses in the county, which prompted criticism from some lawmakers and business owners.

The issue delayed the bond deal for several months.