MGM National Harbor doing its part, but critics fear county isn’t

Luz Lazo//October 24, 2016

MGM National Harbor doing its part, but critics fear county isn’t

Exteriors of the new MGM National Harbor were still under construction in Oxon Hill, Md., on Oct. 18. The casino has met and exceeded goals of contracting minority-own business in Prince George's County, Md. MUST CREDIT: Washington Post photo by Marvin Joseph
Exteriors of the new MGM National Harbor were still under construction in Oxon Hill, Md., on Oct. 18. The casino has met and exceeded goals of contracting minority-owned business in Prince George’s County. (Washington Post photo by Marvin Joseph)

It’s not quite 6 a.m., and Carla Truitt is already making the rounds of the 125,000-square-foot casino floor.

She moves from the food court to the bar to the slot machines. She has a long to-do list: Wipe down any dust left from construction. Check. Polish all appliances, glass, stainless steel. Check. Clean floors. Check.

Her crew of 10 workers, dressed in khakis and navy T-shirts, are on a mission to get the new MGM National Harbor casino resort spotless and gleaming for its Dec. 8 opening.

“I came with some torn jeans and a T-shirt and from there the business just grew,” said Truitt, who owns Be-Clean Cleaning Services, a Prince George’s County, Maryland-based company hired two years ago to take care of the project’s construction trailers and now some post-construction cleanup. “The gratification of all of this is that I am able to give people jobs and opportunities.”

Be-Clean is one of 94 local businesses that secured contracts during construction of the $1.4 billion gaming resort. A minority-owned enterprise, Truitt’s company grew twofold as its relationship with MGM evolved. Her story, she said, is a testament to MGM making good on its promise to give local and minority-owned businesses opportunities.

“Maybe it was luck of the draw, but it worked in my favor,” Truitt said, recalling the first contract she got before the building was erected. “I noticed this big empty space was available with trailers and said, ‘I have to think outside the box. They will need cleaners like anyone else.’ So I left my card and then, I finally got a phone call.”

Since the casino giant received Maryland’s sixth and final gaming license, it has paid local companies $236 million for work related to the facility’s construction, meeting or exceeding goals set in a 2014 community benefits agreement with Prince George’s, according to its most recent quarterly report.

The report, verified by the county and an independent auditor, paints a glowing portrait of MGM’s hiring and contracting practices in the region.

In interviews, government officials and business leaders praise MGM’s outreach to recruit talent in the Washington, D.C., region, particularly among minorities in Prince George’s. They note that the company was able to meet most of the goals despite being faced with a limited number of firms in the county capable of handling a project of the casino’s magnitude and a post-recession shortage of qualified electricians, plumbers and welders in the region.

The project unfolded in a competitive environment for such labor, partly because of a building boom with several large ongoing projects.

Still, with a little more than six weeks left before opening, MGM has fallen short on some commitments, critics say, partly because of the county’s failure to follow through with oversight.

For example, the county and MGM had two years to establish a high school culinary program. A Prince George’s schools official said MGM has said it intends to invest in the district in “real demonstrable ways,” but officials are still looking at potential schools to house the program, which could consist of MGM donating kitchen equipment, providing teaching assistance and money.

Two county officials said MGM was working with Bladensburg High School, but school officials said no deal was reached. The original plan to partner with Potomac High School in Oxon Hill fell through because the school didn’t have the needed infrastructure, according to the county.

The community benefits agreement also calls for MGM to donate a total of $1 million to the county before the casino opens. But county officials responsible for monitoring compliance couldn’t provide a reporter with a breakdown of where MGM stands in meeting the goal.

The money, to help local nonprofit groups provide workforce training, is to be distributed with the help of the county; half of the funds are to go to organizations providing the training. About $250,000 is to go to the Community Foundation for Prince George’s County, an advocate for the county’s nonprofit groups.

So far, the Community Foundation has received two donations of $50,000 each in support of its civic leadership awards program. MGM also has donated $100,000 to Prince George’s Community College for a hospitality program, and $16,200 to the Accokeek Foundation to support its educational programs. Bowie State has received $50,000.

According to MGM’s quarterly report, the company has made about $619,000 in charitable donations, but it doesn’t specify whether they were made in Prince George’s. Casino officials said the company is on track to meet the $1 million goal, but neither MGM nor the county would provide a breakdown.

“Some of it is in the works,” said Roland Jones, director of Prince George’s County Central Services and chairman of the committee that provides oversight of the agreement. He wouldn’t respond to questions about what donations had been made to date.

While MGM appears to be meeting or making a good-faith effort to meet the goals, critics say the county needs to do a better job of monitoring things. Oversight is crucial, because if the committee determines that MGM has failed to make its “best efforts” to meet the terms, it could be required to make additional charitable contributions to the county.

It took the compliance committee seven months after the agreement was signed to hire a compliance manager – the person responsible for analyzing MGM’s progress reports and determining whether the company is in compliance. That person left after just three months in the job and it took the county five months to replace him. The manager reports to Jones.

Asked why the first manager left the job, Jones said, “We won’t get into that.”

Prince George’s officials commend MGM as a top contributor to the local economy, saying its agreement with the county is unheard of in the corporate world.

“They have put forth money, manpower, resources. They have developed relationships,” Jones said.

“They could have blown us off entirely and said we are not going to do this,” he said, referring to the benefits agreement. Instead, he said, “they put forth a true heartfelt effort.”

Some business groups say targeted outreach would have given more small businesses, particularly Hispanic- and Asian-owned firms, a greater chance at competing for jobs in the mammoth development. Meanwhile, some black business leaders and activists say that the majority-black county has not received its fair share of the contracts.

Daryl Branch said his company, Alliant ATM Services, wasn’t given a chance to bid for a contract to provide ATM and cash-advance services at the gaming resort. The company partnered with a larger one to expand its capability and presented a proposal – not a bid – to MGM.

“We didn’t even get an opportunity to put in a bid on the opportunity,” said Branch, a Prince George’s resident, who said his Annapolis, Maryland-based business is certified with the state and county as a minority-owned business. “They should give us an opportunity to at least compete.”

But MGM said cash services are strictly regulated and licensed and only a small number of vendors are qualified to do the job. To bring in a local vendor with no experience in the casino industry, they said, would have been an uphill battle; neither Alliant nor the company it partnered with met the guidelines.

For Truitt, the owner of the cleaning company, the MGM contract has helped her grow her business, which she started nearly two decades ago cleaning houses with her mother. A Prince George’s native and daughter of immigrants from Guyana, Truitt had five people cleaning casino trailers two years ago. Now she manages about 20 workers, half of them in the post-cleanup operations and the rest doing janitorial services at the trailers and MGM offices.

“I get mad at those people complaining,” she said, noting that some small businesses may have found some MGM requirements intimidating, including strict licensing and insurance. “You have to do your due diligence and you have to be proactive. People just want to sit around and wait for them to call.”

According to the casino’s quarterly report, as of the end of September nearly 40 percent of MGM’s construction payments had gone to minority-owned businesses, exceeding a 30 percent goal. Of the 164 minority-owned businesses that worked on the project, 58 were based in Prince George’s and received $118 million in payments – about 15 percent of the construction payments and higher than the goal of 12 percent.

The numbers, however, exclude nearly $200 million spent on areas such as leases, charitable donations, payments to government, security systems and networking services, and the purchase of furniture and fixtures, gaming equipment, structural steel, escalators and elevators.

MGM said that more than 1,700 county residents were hired for the construction phase, and the company expects that when the casino opens, more than 40 percent of the 3,600 permanent employees will be from the county. That will exceed its commitment to have 40 percent of its workforce come from Prince George’s. County officials say they look at payroll to verify the labor numbers.

“Realistically not every single person who has a company is going to get an opportunity. It’s just impossible,” said MGM National Harbor President Lorenzo Creighton. “But we have exceeded all of the goals and expectations.”

In addition to building a database of more than 2,000 local and minority-owned businesses, MGM held webinars, meet-and-greets and procurement events across the county and the region, officials say. It required its primary contractor, Baltimore-based Whiting-Turner, to bring in a minority business enterprise component.

Moving forward, MGM estimates it will spend $60 million to $80 million a year on procuring items for use in the casino operations, and a share of that will go to county and minority-owned businesses. Business leaders say the opening not only benefits the county but the entire Washington region.

“They are very big players here,” said James C. Dinegar, president and chief executive officer of the Greater Washington Board of Trade. “They are bringing 3,600 new jobs. That is 3,600 more people who get hired, who get trained, who have hospitality experience,” he said.

And it brings a new 24-hour industry to the region.

“It is such an amazingly big complex that I think there is something there for almost everyone in terms of jobs and opportunity for business,” he said.

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