Marriott's $600M new HQ is designed for 'the workforce of the future' | Crain's Washington D.C.

Marriott's $600M new HQ is designed for 'the workforce of the future'

Marriott’s planned new headquarters, including office space and a flagship hotel, is expected to open in downtown Bethesda, Md., in mid-2022. | Photo courtesy of Marriott

Marriott International’s new headquarters in downtown Bethesda, Md., will be big and green and an economic engine for a city center in the midst of a major transformation.

The $600 million project is expected to open for business in 2022, generating $89 million in construction jobs once ground is broken, plus a subsequent $2.3 billion in annual business activity and $1.8 billion in local taxes over 20 years, according to Marriott’s website.

This is Marriott’s third headquarters move in its 90 years of existence. The current facility, which houses about 3,500 employees, is in an office park in North Bethesda, just a few miles from the new site. Public transportation is limited and options for lunch are minimal.

“Since our lease is up in 2022, we assembled a team back in 2015 to think about the future, not just 2022 but for 30 or 40 years from now—do we renovate or do we move to a new location?  To renovate our current building, which was opened in the 1970s, would cost almost as much to build a building from scratch,” said Carolyn Handlon, Marriott’s executive vice president finance and global treasurer.

“So we decided that the chance to build a brand-new, state-of-the-art, global headquarters that was close to public transportation in a more vibrant setting would be the best fit for our current associates and the workforce of the future.”

The Marriott chain got its start in 1927, when John Willard Marriott and his wife, Alice, opened an A&W root beer stand in Washington, D.C., then two more root beer stands—now “Hot Shoppes” with hot food—in 1928. They opened their first hotel in 1957 in Arlington, Va., according to the company, and went international in 1969 with the opening of a hotel in Acapulco, Mexico.

Today, the international brand reports it has more than 6,200 properties in 125 countries—but its roots remain in the D.C. metro area.

The new, two-acre headquarters will be developed as a joint venture between the Bernstein Cos. and Boston Properties, which will own the property, and will be within walking distance of the Washington Metro’s Bethesda station. In addition, a 35-mile light rail line connecting Bethesda to Prince Georges County is due to be finished about the same time Marriott’s headquarters is, said Ginanne Italiano, president and CEO of the Greater Bethesda Chamber of Commerce.

“This will take a lot of cars off the road,” Italiano said.

The Marriott headquarters site currently is occupied by a number of small retail outlets, an office building and a hotel. The new 22-story facility will have 730,000 square feet and the attached 12-story flagship hotel will boast 238 rooms. A landscaped plaza with benches and green space also is planned, Handlon said.

“Our new headquarters is being designed to be an efficient and sustainable ‘green’ building, both in the way it will be built as well as the way we will operate on a day-to-day basis,” Handlon said. “We intend to achieve a high level of certification in the U.S. Green Building Council’s LEED [Leadership in Energy and Environmental Design] program. And we will bring with us a strong corporate culture that values diversity, opportunity, and inclusion.”

When Marriott announced it was planning a new headquarters campus, a number of communities bid for the project.

“We have a long history in Bethesda and wanted to stay local for our current associates but also have access to restaurants, retail and public transportation, which downtown Bethesda offers in droves,” Handlon said. “Right now, you really can’t walk to many places from our current site—everything is a short drive away, even the Metro. When we think about our younger workers, especially millennials, they want restaurants for after work and access to the Metro so they can live in the city or in the suburbs.”

Mike Smith, development ombudsman for the Office of the County Executive of Montgomery County, said state and local officials worked closely together on an incentive package to keep Marriott in the county, including $44 million in conditional loans that convert to grants after a decade as long as Marriott keeps its workforce from shrinking, along with a $12 million new jobs tax credit. Another incentive was the county’s offer to provide one of its parking garages for Marriott’s use.

“We’re not seeing a downsizing effort here,” Smith said. “We think they’ll grow that employment base, largely because of the Starwood acquisition. We’re hopeful.”

Marriott acquired Starwood Hotels & Resorts in September 2016 and is expected to move some of Starwood’s employees from the Connecticut headquarters to Bethesda.

Bethesda’s downtown is looking forward to the expected increased business resulting from the project.

“This is fantastic for the urban center,” Italiano said. “Thirty-five hundred employees coming out of their offices every day. … This will be a major economic boost for downtown Bethesda.”

Italiano predicted the influx of workers will have a positive impact on downtown restaurants and nightlife such as the Bethesda Jazz and Blues Club, and might mean people will opt to move to the condos being constructed in the area.

Italiano also is enthusiastic about the project itself, which will feature an innovation center showcasing Marriott International’s 30 brands.

The Marriott project dovetails with the city’s 15-year plan, which is in the process of being finalized and includes three other projects of comparable size.

“A ton of construction is going on,” Italiano said. “People know us as a health center. Navy medical [Walter Reed] is up the street. NIH [National Institutes of Health], which is huge, is nearby. There’s a lot of construction for the roads to be able to handle people coming in and out. We’re building a tunnel between NIH and Navy medical that should be finished at the same time as Marriott. There will be a lot of difference in our skyline here as well.”

Italiano noted several other major hotel chains have their headquarters in the area, which may have been a factor in Marriott’s decision to stay in Bethesda.

“We have the highest educated workforce in the country,” she noted. “It’s one of the best places people want to live. Employees love it. It’s among the best places to get around. It’s an urban center. And it’s friendly.”

Editor's note: This article was updated to reflect the current number of Marriott properties worldwide.

August 8, 2017 - 4:08pm