Prince George’s Land Millions of Dollars, Promise of Jobs in Agreement with MGM

By Michael Neibauer

Prince George’s and MGM have negotiated a community benefits agreement tied to the $950 million MGM National Harbor project that guarantees millions of dollars for the county, the promise of thousands of jobs for residents and significant work for local businesses.

The CBA, signed two days ago by County Executive Rushern Baker and MGM National Harbor President Lorenzo Creighton, sets out goals for construction and operations-related contracting and employment, MGM’s “philanthropic responsibilities” and other commitments. The deal was not a statutory requirement, as there’s no government money tied up in the massive and closely watched casino project.

“We look at these numbers as being aggressive,” said Bradley Frome, assistant deputy county administrative officer. “We think our firms can step up and do these.”

Frome said the county wants its local businesses to “grow through this project,” so when future opportunities become available — FBI, “knock on wood” — “Prince George’s businesses can take more and more of that work.”

The financial contributions detailed in the CBA are over and above the revenue slated to return to the county under the state’s gaming laws — an estimated $17 million-plus annually from slots and tables.

“County Executive Baker and his team worked diligently in crafting a tough-but-realistic agreement,” Creighton said in a statement. “Above all things, I know we share the common goal of ensuring Prince George’s County residents receive significant economic benefits from MGM National Harbor.”

MGM expects to hire upward of 4,000 people to staff its resort, including the casino, the 300-room hotel, nearly 50,000 square feet of conference and assembly rooms, a 3,000-seat theater and numerous restaurants. There is great demand.

The CBA must still be approved by the County Council, which was briefed on its details Tuesday in executive session. That vote won’t come until at least mid-July, roughly when MGM is expected to start construction. MGM National Harbor is expected to open in July 2016. Site work is well underway.

Now, to the benefits:

Before opening, MGM must contribute $250,000 to the nonprofit Community Foundation, $250,000 to still-to-be-determinated programs or organizations that benefit the county and $500,000 to workforce training efforts.
After opening, MGM must give $150,000 per year — in perpetuity — to the Community Foundation and $250,000 per year to organizations that benefit the county.
MGM will accept up to $100 million in private investment in its project, including up to $30 million from county residents. It will be up to MGM whether to provide tiered investment opportunities.
Contracting goals, construction: MGM must make its best efforts to hire 30 percent minority business enterprises, 12 percent county-based MBEs, and 16 percent local business enterprises, which may include outside entities with offices in Prince George’s. The “aspirational goal,” that is, Frome said, “what you shoot for,” is 35 percent, 15 percent and 20 percent, respectively.
Contracting goals, operations: Best effort to hire 20 percent county-based MBEs, 30 percent aspirational.
Employment goals, construction: Best effort to hire 20 percent county residents, 30 percent aspirational.
Employment goals, operations: Best effort to hire 40 percent county residents in years one and two, 45 percent in years three and four and 50 percent in year five. The aspirational goal is 50 percent on the day MGM National Harbor opens.
MGM will pay the salary of a compliance manager to ensure MGM is following the agreement. The manager will be a county employee.
If it fails to hit its marks, or to demonstrate it made a best effort, MGM will be liable for $30,000 per item in liquidated damages, up to $300,000 per year.
MGM will lease the shuttered Thomas Addison Elementary School in Oxon Hill for $1 per year, until six months after the resort opens, for employee recruitment and training, offices and construction staging. During its lease term, MGM will invest $4 million in upgrades to the school, and when the lease is up, the renovated building will be turned back over to the county.
MGM will offer 10 internships per year, sponsor 25 summer youth jobs annually and establish a culinary program, most likely at Potomac High School.