National Harbor opened eight years ago in the middle of a recession. Today, it’s an economic and entertainment center for Prince George’s County. Now, some experts and officials say the arrival of the MGM National Harbor casino complex later this year could bring the waterfront community to a new pinnacle.
“It’s going to be very definitive,” developer Jon Peterson said. “The day they open, life around here will change.”
“All of a sudden in the Washington menu is gaming through a great resort like MGM,” he said. “They will bring entertainment that has never been here. Tell me the last time there’s been a boxing match in the Washington area.”
Peterson, who along with his father, real estate magnate Milt Peterson, is behind National Harbor, sees the gambling resort as a turning point. Anticipation is so high, he said, that several months before the opening, tenants at National Harbor are investing in renovations, construction is taking off, and there’s a renewed effort to improve transportation options for workers and visitors.
The $4 billion community has built a name as the county’s entertainment hub and is an important economic driver. The $1.3 billion MGM project is a spinoff of National Harbor’s success, county officials say.
Just a decade ago, what is now National Harbor was 350 acres of undeveloped waterfront land. Today, it’s a mini-city, with nearly 2,000 residents and 7,000 workers at 30 restaurants, six hotels and 150 retail stores. More than 11 million people visit annually, according to National Harbor officials.
Its future got brighter in December 2013, Peterson said, when Maryland awarded the state’s sixth and final casino license to MGM Resorts International, giving the gambling giant permission to build on 23 acres of Peterson Cos.-owned property outside the waterfront district.
The resort complex, slated to open by the end of the year, according to MGM officials, will feature 3,600 slot machines, 140 gambling tables, a 300-room hotel and several celebrity-chef restaurants. It promises to bring an array of events to its 3,000-seat theater and thousands of visitors.
That, combined with the opening of Tanger Outlet National Harbor and the addition of the 180-foot-tall Capital Wheel, elevates National Harbor’s status as a regional attraction, officials say.
Tanger brought in 80 stores with brands such as Michael Kors and Coach, putting Prince George’s on the map as a regional shopping destination, and the Ferris wheel redefined the harbor’s skyline, becoming one of the most popular attractions for visitors eager to get a view of Washington’s majestic monuments.
“When you tie together the outlet mall, the casino, conferences and hotels, it seems to me that it makes for a pretty interesting destination,” said Jeff Finkle, chief executive of the Washington-based International Economic Development Council. “It’s all happening in a piece of vacant real estate that we were going to call Port America at one point, and we actually accomplished something this time.”
To be sure, the development is not without its critics.
Some neighbors, community leaders and visitors complain about pricey parking on the property and the resort’s lack of a comprehensive transportation plan. Neighbors also have grumbled about noise from events at National Harbor. With MGM opening this year, some say there’s an even greater sense of urgency for the developers and the county to address traffic congestion.
“I am still highly concerned about the transportation plan,” said Prince George’s County Council member Obie Patterson (D-Fort Washington), who represents the area. “When Tanger Outlets opened, people couldn’t get their kids to the school on time or get to a doctor’s appointment. I don’t want to see that happen again. We cannot continue to build there at National Harbor and not provide some means of getting in and out of there.”
County officials say they are working with MGM on a traffic-management plan.
Zeno St. Cyr II, a community leader and longtime area resident, said the development gives southern Prince George’s something to be proud of, but attention must be paid to what more growth will mean.
“That is going to bring increased traffic,” St. Cyr told the county Planning Board, which reviewed proposals for construction around MGM. “As we move forward we hope that a very hard look will be taken to improve the transportation nightmares that some of the residents have addressed.”
As construction workers press on with the mammoth gambling resort nearby, pressure is on the established businesses to keep up.
“As National Harbor continues to grow, obviously so does the demand for our business,” Gaylord spokeswoman Rachel A. Dinbokowitz said.
Gaylord recently broke ground on a $20 million waterfront ballroom that will add 23,000 square feet of meeting space to the facility. With nearly 2,000 hotel rooms and 500,000 square feet of meeting space, Gaylord is the largest hotel on the East Coast and a competitive venue for large conventions in the Washington region, hosting major groups such as the Conservative Political Action Conference and the annual Scripps National Spelling Bee.
The MGM resort will add meeting and event space to the area, yet MGM is projecting that many of its guests will probably stay at Gaylord and the other five hotels at National Harbor.
“We don’t have enough rooms to accommodate all the guests,” said Lorenzo Creighton, chief executive of MGM National Harbor. “Our business model was thought of and developed to fit into the region and not in any way cannibalize the region.”
The MGM resort’s 300-room hotel is minuscule by MGM’s standards; the chain’s smallest hotel in Las Vegas has 2,400 rooms, company officials said. The size of the gambling facilities, however, are more in line with those on the Vegas Strip.
Creighton said MGM could help grow single bookings as well as convention business in the area, with some people extending their stay now that they’ll have a gambling option nearby. Gaylord sees that potential.
“It’s an international brand name, and it is going to bring a lot of great offerings,” Dinbokowitz said. “Is there going to be some things that may compete with us? Possible, sure. But it’s more positive for the area and more opportunities for our guests to do additional things.”
The region’s hospitality industry overall appears to be preparing for how to capitalize on MGM. Washington tourism officials, for example, are strategizing on how to get casino crowds into the city.
“Now we have a chance to attract those visitors,” said Elliott Ferguson, president and chief executive of Destination DC, which promotes travel to the District. “We can get them for sporting events or nightlife or restaurants or things they would want to do, because they assume they are in Washington, D.C.”
Besides Gaylord’s expansion, other National Harbor tenants are redoing their spaces. Harrington’s Pub & Kitchen is closed for renovation. Cadillac Ranch reportedly spent $1 million on enhancements.
“They are preparing for the life after MGM opens,” Peterson, the developer said. “We know that their successes are our successes and our successes are their successes.”
Looking ahead, Peterson Cos. also is embarking on a plan to build around the MGM site. Earlier this year, the county’s Planning Board approved a proposal for a multiple-wing, 17-story building to house a 500-room hotel on 50 acres next to the MGM resort, and 900 units of a mix of apartments and timeshares. The plan would add a gas station and convenience store, retail, a restaurant, entertainment and a heliport.
Peterson said those plans are on hold until after MGM opens. But the company is moving forward with other projects, including a recent purchase of an office building next door to Tanger Outlet.
Work starts this summer on the second phase of the residential side of the development, with the construction of 500 apartments that will add to the community’s 1,000 residences — a mix of townhouses, condos and apartments.
The construction, expected to start this summer and last about two years, responds to growing demand for rental units in the area, said Stuart S. Prince, who oversees residential construction for Peterson Cos.
The Esplanade, the newest building in the complex. added 262 apartments last year for the missing rental component to the mix of housing options. The building is more than 90 percent leased, Prince said.
National Harbor, the largest employment center in the county, will add 3,600 jobs when MGM opens. It added $1.2 billion in assessed value to the county and an annual net tax revenue of $6 million, after debt-service payments on various financing bonds that the county issued for the development, Prince George’s officials say. MGM National Harbor is expected to generate $40 million to $45 million annually in tax revenue for the county.
“At the end of the day, the numbers tell the story,” said Finkle, of the International Economic Development Council.