Navy League to Move Sea-Air-Space Exposition to National Harbor

From The Washington Post, Monday, April 17, 2006; Page D01

Developer Milton V. Peterson revved the engine of his silver Mercedes through the thick red mud and gravel of his $2 billion National Harbor project on the banks of the Potomac River in Prince George's County.

"Some view, huh?" Peterson said, as he extricated the car from the muck of the construction site. He pointed from a hillside of sycamore and cherry trees down to the sun sparkling on the water with the District and Alexandria skylines in the background.

After 11 years of planning and design for the largest economic development project ever in Prince George's, the first phase of National Harbor -- 4 million square feet of hotels, restaurants, retail stores and condominiums -- is under construction.

Today, Peterson, accompanied by County Executive Jack B. Johnson, plans to announce that five major hotel chains will open properties at National Harbor, in addition to the 2,000-room hotel and convention center that is already being built by Gaylord Hotels.

Peterson said the additional hotels being announced today will include a Hampton Inn, a Residence Inn by Marriott, a 195-room Westin, a boutique hotel called Aloft run by Starwood Hotels & Resorts Worldwide Inc., and a 246-unit Fairfield Resorts timeshare property. They will bring the total number of hotel rooms at the 350-acre complex to just under 3,000.

"We want to draw the tourist, the conventioneer and the business traveler," Peterson said as he showed off the mounds of dirt, cranes and bulldozers on the site where the hotels will go. "We want to give each of those kinds of travelers something more than a bed, a bureau and a bathroom."

That prospect is causing increasing concern in the District's hospitality industry, which is already starting to feel the effects of a new, nearby competitor in Peterson's project.

Over the past three decades, Peterson, 70, has built some of the largest developments in the Washington area, including Fair Lakes and Fairfax Corner in Northern Virginia and the Washingtonian Center in Gaithersburg. He also played a major role in the revitalization of downtown Silver Spring.

The state and county have provided more than $300 million for roadway interchanges and infrastructure near the National Harbor project, just south of the new Woodrow Wilson Bridge. Peterson designed it after seeing Las Ramblas, a popular street in central Barcelona.

"I just fell in love with the feeling of Las Ramblas because it was so active and it has a center plaza," Peterson said as he showed off a 12-by-10-foot model of the project, which about 30 consultants are helping him design and build.

The model in the lobby of an office he rents on Oxon Hill Road, overlooking the project, is complete with little people walking along wide sidewalks and sitting at outdoor cafes, a maritime museum, water taxis docking at piers, condominiums with balconies, the large atrium at the Gaylord hotel, and trees that he wants to line the main avenue.

"We'll have that with kiosks where you can buy something to eat, and we'll have art shows and entertainment," Peterson said as he fussed with the miniature trees. "We're creating a city" -- a city that will compete directly with the District for hotel guests and business meetings.

Gaylord, which expects to open its hotel in March 2008, already has booked almost 600,000 room nights -- the total number of rooms booked, multiplied by the number of nights they are reserved -- Peterson said. Many groups that hold large-scale meetings book hotel rooms and convention space years in advance. Gaylord owns complexes at Opryland in Nashville, near Disney World in Kissimmee, Fla., and at the Lake Grapevine resort in Texas.

The District's largest hotel, the 1,300-room Marriott Wardman Park on Connecticut Avenue NW, has lost three events to the Gaylord -- two military-related shows and a major computer software company's meeting, according to Ed Rudzinski, the general manager at the Wardman Park. He said losing the three annual shows cost him $6 million a year in room revenue, food and beverages, and banquets.
 
They're not to be taken lightly," said Joe Stern, sales director for the Grand Hyatt Washington, referring to National Harbor. The National Harbor has not had any "dramatic effect" on his hotel at this point, he said. But, as its opening gets closer, he expects to compete with the Gaylord hotel for shows that need 1,000 to 2,000 rooms. "Every dollar lost to Prince George's can be directly linked to lost tax revenue to the city," Stern said.

Convention-industry leaders in the District have cited National Harbor as adding urgency to plans to build a 1,434-room, $550 million hotel next to the Washington Convention Center.

The Navy League of the United States is one of the groups going to the Gaylord hotel after holding its annual exhibitions at the Wardman Park since the 1960s.

"We've filled all the space at the Wardman Park, and we're turning exhibitors away," said Stephen Pietropaoli, executive director of the nonprofit group that promotes the nation's maritime forces. "When we looked at Gaylord there was room to grow."

Although Pietropaoli said he appreciates the service his group received at the Wardman Park hotel, and its proximity to the Metro, he's getting a larger meeting area with fewer columns. That's something many exhibitors seek so they can have larger booths. And there will be more loading docks at the Gaylord, an advantage to moving exhibitors' equipment in and out quickly, saving them money.

"If you had an exhibitor who wanted to bring a combat ship up into the Potomac it could be anchored at Gaylord," Pietropaoli said. "It gives you a lot of opportunity that you don't have other places. You're not going to get a big ship up Rock Creek no matter how hard you try."