Trump hotel in DC sold to Miami investment group

 Trump hotel in DC sold to Miami investment group

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Donald Trump left Pennsylvania Avenue again.

Trump’s name on the former president’s DC hotel – on facade signs, linen, bar napkin and coaster – is set to be removed after the sale of his government lease for CGI Merchant Group property for a record -setting $ 375 million.

Miami -based CGI Merchant has partnered with Hilton to turn the Pennsylvania Avenue property into a Waldorf Astoria hotel, ending a more than five -year run in which the hotel became Trump’s powerhouse of Washington and a symbol if how he mixed business and politics. like no other president in history.

“We took a dilapidated and underutilized government building and renovated it into one of the most beautiful hotels in the world,” the president’s son, Eric Trump, said in a statement Wednesday. “We’re very proud of what we’ve done.”

With Trump in office, the hotel served as a central gathering place for Republicans and a background for mass protests against his leadership and policies. After signing a lease with the General Services Administration for the property in 2013, he hung a large blue-and-white flag on Pennsylvania Avenue: “TRUMP,” it said, “Arrival in 2016. ” Construction was completed nearing the end of his presidential campaign, and the hotel opened within weeks of his election victory.

Government ethics experts rejected his willingness to promote his candidacy alongside his business. During the week of its inaugural, its Presidential Inaugural Committee spent about $ 1 million on ballrooms and meeting spaces at the hotel. That prompted a lawsuit from DC Attorney General Karl A. Racine, which was finally settled on May 3 this year, clearing the way for closing the deal.

Calls to revoke the lease or for Trump to remove himself from his real estate assets were even louder after he entered office and foreign leaders, corporations and Republican politicians booked hotel rooms and parties as part of their efforts to gain Trump’s favor.

Trump has continued to hire despite a series of lawsuits and constitutional challenges led by Democratic leaders. The GSA-until the last months of President Barack Obama’s second term, Trump’s own full term and President Biden’s more than a year-never acted against Trump despite a clause to rent which prohibits any “elected government official. United States” from taking “any benefit” from the arrangement.

Many embassies and associations have refused to book hotel events, causing the property to accumulate millions of dollars in losses over four years, according to financial documents provided by Trump’s company to the government and released. to the House Oversight Committee in October 2021.

But Trump supporters – whether tourists in MAGA caps or senators raising campaign money – crowded the hotel and its spacious lobby bar. At the steakhouse in the back, Trump’s private attorney put up a nameplate, “Rudy Giuliani, Private Office.” In an upstairs room, Giuliani and his team are planning outreach in Ukraine that will lead to Trump’s second impeachment.

Keeping the contract can now give Trump a big salary. Trump won the lease deal from the GSA after promising to spend $ 200 million on property development. Critics have ridiculed the price, which is much higher than other companies are willing to pay.

Now his $ 200 million stake in the property – like most of his daring political gambles – will pay off, possibly giving him a profit of more than $ 100 million, hotel experts said, even after accounting for $ 170 million. debt to Deutsche Bank that he had to pay. off, the operating losses he suffered and a complicated government revenue -sharing agreement.

The revenue will come as a result of the willingness of CGI Merchant, whose investors include famous athletes Alex Rodriguez and Floyd Mayweather, to pay higher than what some hotel analysts say is likely to make a profit.

“We are excited to partner with our friends at Hilton to bring the Waldorf Astoria brand to an iconic landmark in the nation’s capital and look forward to working together to have a lasting and positive impact on the Washington, DC community,” he said. Raoul Thomas, CEO and founder of CGI, in a statement Wednesday.

“Hilton is committed to serving any visitor, for whatever travel need they may be, anywhere in the world, and we are excited to partner with CGI to expand our presence in the nation’s capital,” he said. Chris Nassetta, president and CEO of Hilton, in a statement.

By every measure, the $ 375 million price is a record for Washington. Hotels are priced on a per room, or “per-key,” basis. In Washington, the high water mark came in 2016, when the Capella Hotel Georgetown – now the Rosewood hotel – sold for about $ 1.3 million per key, according to industry data. At $ 375 million for 263 guest rooms, Trump’s proposed sale would come to about $ 1.43 million per key, 10 percent higher than the Capella sale, despite the requirement that CGI pay the government a base rent of more than $ 3 million per year.

“Today’s sale is the latest in a long line of questionable deals, conflicts of interest, and constitutional violations involving former President Trump and his Washington, DC hotel,” House Oversight Chair Carolyn said. B. Maloney (DN.Y.) in a statement.

GSA completed a cursory review of sales in March.

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