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Hilton Hotels Checking In To Stay in Fairfax County

Maryland and the District courted Hilton Hotels headquarters, which will take its jobs and capital to Fairfax County.
Maryland and the District courted Hilton Hotels headquarters, which will take its jobs and capital to Fairfax County. (By Kevin Clark -- The Washington Post)
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By Michael S. Rosenwald and Ann E. Marimow
Washington Post Staff Writers
Thursday, February 5, 2009

Hilton Hotels said yesterday that it has chosen a new home: Fairfax County.

The hotel chain, which surprised the local hotel community last month by announcing it was moving to the Washington region from Beverly Hills, chose Fairfax after looking closely at a spot in Montgomery County near Marriott International. The District also tried to woo the company.

Hilton received a $4.6 million incentive package, beating Maryland and Montgomery's offer by more than $2 million. Virginia Gov. Timothy M. Kaine (D) put up a $1 million grant from the Governor's Opportunity Fund, matching $1 million in incentives from the county. The governor also used $2.5 million from the Virginia Economic Development Incentive Grant program.

Officials said Hilton would invest $17 million in the move, creating more than 300 full-time jobs within three years. State officials are also providing $162,500 in training assistance through the Virginia Jobs Investment Program.

Hilton, whose move puts it in the back yard of its biggest competitor, Marriott International, has yet to settle on a Fairfax location but is negotiating with several potential landlords, county officials said. The officials added that $2 million in incentives are for sidewalk work in Tysons Corner, suggesting that Hilton will likely be a tenant there. There is also a 458-room Hilton hotel nearby.

Hilton weighed the Tysons Corner location against a building at 6720 Rockledge Drive in Bethesda, according to people with knowledge of the company's search. Moving to Rockledge Drive would have put Hilton's headquarters about a half mile from Marriott's.

Maryland governor Martin O'Malley's office declined to comment on his state's offer, referring questions to the Maryland Department of Business and Economic Development. Frances Reaves, the agency's assistant secretary for marketing and business development, said she was "disappointed" Hilton had not chosen Maryland. She declined to detail the state's incentive package.

Timothy Firestine, Montgomery County's chief administrative officer, said that the state and local incentive package totaled $2.4 million -- a $1 million loan convertible to a grant if Hilton created 325 jobs and $1.4 million in the form of a tax credit for creating a specified number of jobs.

Firestine and Reaves chalked up the loss not to the incentive package, but to a more favorable leasing situation in Virginia. Hilton spokeswoman Ellen Gonda declined to comment on the Maryland package.

"We were told it was purely a business decision," Reaves said. "The CEO of Hilton reached out to us and said nice things but that it was a business decision."

Hilton's chief executive Christopher Nassetta has close ties to Northern Virginia, having grown up in Arlington County. He has a home in Arlington and in the Annapolis area. He also previously led Host Hotels & Resorts, which is based in Bethesda.

Hilton says it is moving to the region to lower its costs, improve its proximity to its other corporate locations and tap into local hotel brainpower.

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