The Smithsonian apparently has scuttled a proposal by Marriott Corp. and Warner LeRoy Enterprises Inc. of New York to revamp the Capitol Mall museum restaurants and to install a fancy, world-class eatery at the National Air & Space Museum.
John F. Jamison, the Smithsonian's assistant secretary for administration, said that a "careful analysis" of the proposed multimillion-dollar project showed that the museum would be "hampered" in controlling some aspects of the restaurant operations. And, financially, he said, it is probably cheaper for the museum itself to build a new $13 million to $15 million restaurant at the Air & Space Museum and hire a contractor to run it.
"It is now our intent to go back on the street and solicit new bids from anyone who is interested in running the restaurant," Jamison said. "We do not intend to simply renegotiate with Mr. LeRoy and the Marriott Corp. This is a political, moral and legal obligation that we have, to go out and invite everyone in again."
The renovation of the other Smithsonian restaurants probably will be handled later and separately, Jamison said.
That decision has left both Warner LeRoy, the New York restaurateur who brought the glittery Maxwell's Plum and Tavern on the Green to the Big Apple, and Marriott Corp. miffed. "There is nothing that I can say right now," LeRoy said. "We have to wait to see what the Smithsonian wants to do."
Marriott spokesman Robert Souers said, "We were disappointed when we found out that they were going out to rebid this thing, because we had put a lot of time and effort into it. It's unfortunate that we both [Marriott and LeRoy] went so far down one particular road only to have nothing happen."
Claudia Oakes, an Air & Space Museum official who was involved in the negotiations, said the LeRoy/Marriott proposal was examined by the Smithsonian's new treasurer, Ann R. Leven, who determined that the "numbers were not there to support the project being financially sound for the museum."
The Smithsonian's Jamison added that when the deal was first being negotiated early last fall, interest rates were high. "As rates fell, it became more attractive for us to build the restaurant," rather than to contract with Marriott and LeRoy to build it. Otherwise, Jamison said, the joint venture would have been able to retain the difference between the contract price and the falling interest rates as added profit, because it would have cost LeRoy/Marriott less to borrow the money to finance construction.
In addition, Jamison said that the contract contained a provision that "would have required us to reimburse LeRoy/Marriott for lost opportunities should we want to cancel the contract we were negotiating to have them manage the properties for a 10- to 20-year period. We would have had to pay them for the lost earnings."
From Marriott's point of view, such a multimillion-dollar investment required a certain number of years to guarantee a "proper" rate of return, Souers said. "We couldn't very well give away our profits. We thought that we were moving towards a mutually acceptable goal of us doing the food service there."
Walter J. Boyne, director of the Air & Space Museum, said that as a result, "We thought that it would be best to recompete the contract."
The exterior design for the restaurant of the Air & Space Museum's now-vacant North Terrace will remain as planned. It was negotiated separately with Hellmuth, Obata and Kassabaum Inc., of St. Louis, the museum building's original architects. Oakes said plans still call for an 800-seat fast-food area and a 200-seat mezzanine for table service.
The Smithsonian plans to solicit bids for the construction contract this summer.
The Torch, the Smithsonian's official internal publication, said this month that Smithsonian Secretary Robert McCormick Adams planned to "borrow $12 million to $15 million, either from [the Smithsonian's] own funds or from lending institutions, for the construction" of the restaurant. Restaurant projects for the other museums are on hold, including an expansion of facilities at the American History and Natural History museums.
Will that leave the Smithsonian with more "government cafeterias?" "That's not our goal at all, but we fully intend to go with competitive bidding for the project and see what turns up," Jamison said.