MANDARIN ORIENTAL HOTEL PROJECT

On March 7, 2000, the District approved its second tax increment financing (TIF) deal to assist the Portals Hotel Site, LLC in the development of the Mandarin Oriental Hotel - Washington DC. The hotel will be constructed within the Portals complex, a former Redevelopment Land Agency site located along the waterfront in southwest Washington.

In March 2002, the District issued $46 million in tax-increment financing bonds to help fund this hotel project, which has an estimated project cost of $144 million. The bonds are insured and were given an underlying rating of 'A-' from Standard and Poor's. The debt service on the bonds is payable from portions of the incremental sales taxes and real property taxes generated by the TIF project.

Construction on the hotel began in spring 2002, with expected completion in 2004. This first-class, full service, 400-room hotel will boast approximately 33,000 square feet of associated meeting and banquet space; two restaurants; and a health spa with fitness center totaling approximately 10,000 square feet. It will also house 6,500 square feet of retail space, an art gallery, and an approximately 90,000-square-foot parking garage. The Mandarin Oriental Hotel will be the first 5-star hotel in the District.

Contracting opportunities for companies registered in the District as small, local and disadvantaged business enterprises will also be available, awarding these companies approximately $38 million in contracts. The developers are also required to award 35 percent of all project operating cost contracts to these companies from start-up to five years after receiving a certificate of occupancy.

This project is estimated to create approximately 500 construction jobs over a two-year period. When fully operational, the hotel will provide approximately 500 full-time, ongoing employment opportunities for District residents. In addition, the developer will create a training program that teaches residents the necessary skills to work in the hospitality industry.

For more information on the Mandarin Oriental Hotel chain, consult their website*.