Marriott Selects Downtown Bethesda for New Headquarters

marriottForemost hospitality company Marriott International says it has settled for downtown Bethesda as the new location for its headquarters, with the decision being influenced by promise of incentives from the government for it to remain in the region.

The world’s largest hotel company made the announcement on Tuesday after receiving promise of up to $62 million in subsidies funded by taxpayers. It said around 3,500 employees, who are currently spread across three offices, would be moved to new headquarters to be built in the proximity of the Bethesda Metro station by 2022.

Marriot has yet to determine a specific location where the $600 million complex will be erected. It is said to still be assessing several locations easily accessible to Metro, with a selection expected in the first half of next year.

The company had announced early last year that it would move from its longtime Rock Spring Center office park to an area more accessible to Metro. D.C., Northern Virginia and Prince George’s County expressed interest in hosting the complex, but the incentives promised contributed to sway the company’s management to remain in Montgomery County.

“Marriott has been headquartered in the State of Maryland for more than 20 years and we intend to remain close to our roots,” Arne Sorenson, president and chief executive of the hotel company, said in a statement. “Our goal is to provide a cutting-edge workspace for our associates, offering state of the art technology, modern amenities, and access to a range of transportation options.”

The Marriott CEO said the company decided on downtown Bethesda because it “offers multiple sites that meet our priority needs.”

The proposed complex will have office space of 700,000 square feet to house Marriott employees. The company is working with architecture company Gensler and real estate brokerage firm JLL.

Political leaders in Maryland, especially Montgomery County, were believed to have pushed strongly for Marriott to remain in the region to preserve jobs. They had been criticized in the past for not doing enough in this regard.

The $62 million incentive package includes $44 million grants to be shared by the state and county. It also includes $18 million in tax benefits, majority of which would be provided by the state.

This is the second taxpayer-funded incentive package Marriott would be offered by the state and county in less than two decades. This may likely raise questions on the limit government should be willing to go to keep companies from moving.

Marriott became the largest hotel company in the world following its acquisition of Starwood Hotels & Resorts Worldwide Inc. last month. The transaction added Sheraton, Westin and St. Regis to the hospitality giant’s family of brands, which includes the Marriott and Ritz.

It is not yet clear the number of Starwood employees that would be moved to the new headquarters when completed.

Marriott becomes the latest company to move away from suburban office parks to more urban areas. General Electric and McDonald’s are two of the major corporations that have already left office parks.

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