Marriott International plans to relocate its headquarters from its sprawling Bethesda campus in coming years, chief executive Arne M. Sorenson said last week, prompting what could be a high-stakes battle for the prominent corporate nameplate among local jurisdictions.
A little more than 2,000 people work at Marriott’s corporate headquarters, located in over 900,000 square square feet on Fernwood Road in Bethesda.
Sorenson said last week that the global icon would be relocating within the region and that he had begun informally discussing the company’s options with local leaders. Marriott’s lease expires in 2022.
“It’s time to start thinking about it,” Sorenson said. “We’ve got almost a million square feet in Bethesda. Obviously you can’t decide one month you’re going to move one million square feet worth of office and move the next month. This is something that’s going to take some years to get worked out.”
Sorenson said he considered the Washington area the hospitality capital of the world, with competitors Hilton Worldwide, Choice Hotels, DiamondRock Hospitality and other firms in close proximity. He praised the area’s “supremely well-educated workforce” but said in order to attract the best talent he needed a location that would appeal to young workers.
“I think it’s essential we be accessible to Metro and that limits the options. I think as with many other things our younger folks are more inclined to be Metro-accessible and more urban. That doesn’t necessarily mean we will move to downtown Washington, but we will move someplace.”
Marriott is currently housed in a suburban office park, the center of which was built in 1978, and the likes of which some companies have been vacating in recent years during a rush back into urban areas. Though it is located near Interstate 270 and the Capital Beltway, the complex is about three miles from the nearest Metro stop, the Grosvenor station.
Sorenson, 56, the first non-member of the Marriott family to run the company, would not commit to remaining in Maryland. He said had already had informal discussions with Virginia Gov. Terry McAuliffe (D) and D.C. officials about his interest in relocating. He gave a mixed review of the Maryland business climate.
“Maryland has not been great for business, but it hasn’t been aggressively trying to run them out,” Sorenson said. “I think it’s more just in the last few years [the state] probably hasn’t cared about it. I don’t think it’s been against it.”
Keeping the company may constitute a first major test for new Maryland Gov. Larry Hogan (R), who made waves on the campaign trail about the fact that his state is no longer home to many Fortune 500 companies.
There are currently only four, as previously Maryland entries including Black & Decker, Coventry Health Care and Constellation New Energy have been acquired or merged with companies headquartered elsewhere. Another major employer, McCormick & Co., maker of Old Bay Seasoning, is also mulling a relocation.
“We’ve had the largest mass exodus of taxpayers fleeing our state, of any state in our region, and one of the worst in the nation,” Hogan said during his first State of the State address, in February.
State officials are working to make sure the company remains, said Karen Glenn Hood, a spokeswoman for the state department of business and economic development.
“Obviously Marriott’s an iconic company. It’s a world-class company and we have a great relationship with them. We are engaged with them on a regular basis. And it’s a company that we clearly want to continue to call Maryland home so we are going to work with them and make sure that happens,” she said.
Sally Sternbach, acting director of the Montgomery County Department of Economic Development, said the county was taking a “very thoughtful and very thorough look at what will help them to grow and succeed.”
“Accessibility is important and amenities are important. And yes we will try to work with them on both and put them where they feel they will get a good return for that,” she said.
Spokespeople for McAuliffe and D.C. Mayor Muriel E. Bowser (D) declined comment.
Marriott’s headquarters have been in Montgomery County since 1955, but if its proposed relocation prompts something of a bidding war among local jurisdictions it will not be the first time. .
In 1999 the company flirted with a move to Fairfax County before Maryland put up an incentive package worth as much as $58 million, depending on an array of circumstances.
Marriott has been a darling of the stock market during the past two years, and increased its fourth quarter earnings by 30 percent last year. It posted 2014 profits of $753 million, or $2.54 per share, on revenue of $13.8 billion. Sorenson expects it will have 1 million rooms open or in development by later this year.
In all, the state said Marriott employs 9,970 people in Maryland.
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