BusinessColumnistsOp-EdOpinionWilliam Reed

BUSINESS EXCHANGE: Are Blacks in Business at National Harbor and MGM?

National Harbor is a $4 billion, 300-acre development along the Potomac River in Oxon Hill, Maryland, just south of Washington, D.C. MGM National Harbor is a $1.2 billion resort casino emerging in National Harbor. The casino, scheduled to open in December, will be owned and operated by MGM Resorts International. Like its business partner, National Harbor, the MGM project is estranged from Prince George’s County’s black businesses.

The 8-year-old site is being developed by Milton Peterson and has been at odds with the county’s black business operators and organizations from the start. The county’s black business and political leaders’ issue with the National Harbor projects is “insufficient commitments to Prince George’s businesses and contractors.” In addition, many blacks in the region view Milt Peterson as a threat looming to lure tourists and conventions away from D.C., a potential blow to a city heavily dependent on visitors for tax revenue.

The MGM complex is a 1 million-square-foot, 300-suite hotel and casino that will have 3,600 slot machines, 140 gaming tables and a 3,000-seat theater. Baltimore-based Whiting Turner is general contractor. About 1,500 contractors are now working on exterior finishes and the interior work of hanging drywall and installing millwork for the 24-story hotel tower.

The demographics of the blacks that surround National Harbor are overwhelming. Mostly-black, inner-Beltway communities border National Harbor. Its South County neighbors are high-income residents making up the country’s wealthiest African-Americans with median family income of $103,438.

The county’s share of tax revenue from National Harbor is approximately as much as $45 million annually, and is estimated to garner $19 million in casino-related revenue. MGM signed has a Community Benefit Agreement (CBA) with the county, committing to provide $1 million in philanthropic spending and $400,000 per year after their opening. In addition, they would provide 10 internship opportunities, 25 summer jobs, the establishment of a culinary program, mentoring programs, renovation of a school that MGM will use until its administrative building is built. In the MGM commitment to minority ownership, Radio One CEO Cathy Hughes and her son, Alfred C. Liggins III, have invested $40 million in the project.

MGM National Harbor says they have surpassed minority participation goals established in its CBA. MGM National Harbor says there was 31 percent of Minority Business Enterprise participation that included local and minority businesses in the bid process, and 16 percent participation of county-based minority business enterprises. MGM officials say that of more than 96,000 total labor hours on the project, over 18,000 hours are being performed by county residents. One such minority business is Lord & Mitchell, Inc., an operation headed by President Toya Mitchell that works with the casino and resort’s marketing campaigns.

According to the latest U.S. Census, Prince George’s County is a leader in the number of African-American entrepreneurs, yet the National Harbor’s business commitments — or lack thereof — to those entrepreneurs have blacks up in arms. Members of the Prince George’s County Business and Contractor Association say they are in the process of filing suit in the matter.

According to Bruce Branch of the Prince George’s County Business and Contractor Association, MGM promised to give African-American contractors 32 percent of the work on the casino, but Branch now says “about 72 percent of the work has already been awarded and African-American contractors have been denied those opportunities.”

“African-Americans did not get contracts” for FedEx Field, the Wilson Bridge nor The Gaylord, Branch said. “They said this time it would be different, African American firms would get contracts.”

Black businesses in Prince George’s County are depending on elected officials to set things right. Over the course of National Harbor projects, state Sen. Anthony Muse said the development’s businesses have received generous governmental benefits and “they have an obligation to at least be friendly to the community,” which then-Maryland Gov. Martin O’Malley characterized as a “shakedown.” The outgoing Rep. Donna Edwards, like Muse, wonders whether the county should have driven a tougher deal, insisting that in exchange for tax support, the developer commit to greater use of local contractors.

William Reed is publisher of “Who’s Who in Black Corporate America” and available for projects via Busxchng@his.com.

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William Reed

William Reed is President and Chief Executive Officer of Black Press International. He has been a Media Entrepreneur for over two decades. A well-trained marketing and communications professional, Reed has a national reputation for his expert writing, speaking, organizational, research, management and motivation abilities, along with strong managerial, presentation and sales skills.

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