My seven-year-old would call it a pinky promise.
MGM National Harbor and Prince George’s County officials call it a Community Benefit Agreement.
After working on it for months, the resort’s developers and County Executive Rashern L. Baker III (D) released details of the agreement Wednesday. (Hat tip to WJLA.) It is the county’s attempt to get MGM National Harbor officials to make good on long-standing claims that the project will bring jobs to residents in Prince George’s, one of the last counties in the area to emerge from the foreclosure crisis.
In the document, MGM National Harbor officials promise to make their “best efforts” to ensure that 20 percent of the construction work will be handled by county residents, and that 40 percent of its resort’s workforce on opening day will be either county residents or veterans. The agreement also sets a range of targets for the hiring of minority-owned businesses, including ones based in the county, during construction and operation of the resort.
If MGM National Harbor keeps those promises, then great. But similar agreements have not always been effective in getting the desired results. In this case, success will be defined not only by numbers, but also the judgment of an oversight committee. (The panel consists of five people: two appointed by the county executive, two appointed by the county council and one picked by MGM.)
But even if the committee decides that MGM National Harbor has fallen short of its hiring goals, it does not have much of a stick to wield. There won’t be any take-backs, obviously, as it would be hard to dislodge a massive resort from the shores of the Potomac once it is built. And public officials will likely be loathe to give up taxpayers’ share of the casino’s revenue. Instead, under the agreement, MGM National Harbor is supposed to make a charitable contribution that will eventually go toward helping build minority- and locally-owned businesses. [Update: MGM officials point out that local governments can’t mandate local hiring preference because of a U.S. Supreme Court decision.]
How big a contribution? Well, they’re not sure. The agreement says that county and resort officials “agree that … it would be impractical and extremely difficult to estimate the damages suffered by the County,” if the contracts and jobs for county residents don’t materialize as promised.
Whatever the amount, the agreement says, just don’t call it a penalty because it is not “intended” that way.
Beyond jobs, the agreement also contained a little-mentioned deal to fix up Thomas Addison School in Oxon Hill. The county has agreed to lease it to MGM for less than the cost of a cup of coffee. MGM, in return, would pay to renovate it and use it as a recruitment and training center. If the reno costs run too high for MGM, the resort can give it back. The county will get the building back eventually anyway, once MGM no longer needs it.
But the big payoff taxpayers will be waiting for is a share of the tens of millions of dollars the resort is expected to generate once it opens in 2016. State casino revenue, for now at least, is trending in one direction: up. According to the latest figures released by the Maryland Lottery and Gaming Control Commission, Maryland casinos generated $75.8 billion in revenue for May, an increase of 9.6 percent compared to the same period a year earlier.
UPDATE: Here are a few more details about the Addison School deal, courtesy of MGM National Harbor President Lorenzo Creighton:
The building, which has not been in use for years, needs extensive work. And by extensive, I mean expensive. Creighton said the resort developers plan to spend about $4 million on renovations. Part of that cost is the need for “environmental remediation,” which is another way of saying there is asbestos tile that has to be removed. Once the resort opens, Creighton said, “MGM will return the renovated property to Prince George’s county as a fully functioning building.”