Investment group

Trump hotel in DC sold to investment group in Miami

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Donald Trump leaves Pennsylvania Avenue again.

The Trump name at the former president’s DC hotel – on facade signs, linens, bar towels and coasters – is set to be removed after his government lease for the property is sold to CGI Merchant Group for a record $375 million.

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

“We’ve taken a dilapidated, underutilized government building and transformed it into one of the most iconic hotels in the world,” the president’s son, Eric Trump, said in a statement Wednesday. “We are incredibly proud of what we have achieved.”

With Trump in power, the hotel has served as both a central gathering place for Republicans and the backdrop for mass protests against his presidency and policies. After signing a lease with the General Services Administration for the property in 2013, he hung a huge blue and white banner on Pennsylvania Avenue: “TRUMP,” it read, “Coming 2016.” Construction was complete near the end of his presidential campaign, and the hotel opened a few weeks after his election victory.

Government ethics experts have denounced his willingness to promote his candidacy alongside his company. During the week of his inauguration, his Presidential Inaugural Committee spent about $1 million on ballrooms and meeting space at the hotel. This prompted a lawsuit from DC Attorney General Karl A. Racine, which was finally settled on May 3 of this year, paving the way for the settlement to be completed.

Calls for the lease to be revoked or for Trump to divest of his real estate assets intensified after he took office, and foreign leaders, corporations and Republican politicians booked rooms and parties at the hotel as part of of their efforts to curry favor with Trump.

Trump kept the lease despite a series of lawsuits and constitutional challenges by Democratic leaders. The GSA — in the final months of President Barack Obama’s second term, Trump’s entire term, and President Biden’s more than a year — never took action against Trump despite a clause in the lease prohibiting any “elected representative of the United States government” from deriving “any benefit” from the arrangement.

Numerous embassies and associations have refused to book events at the hotel, which has racked up millions of dollars in losses over four years, according to financial documents Trump’s company provided to the government and published by the House Oversight Committee in October 2021.

But Trump supporters — from tourists in MAGA hats to senators raising campaign funds — have flocked to the hotel and its expansive lobby bar. At the steakhouse in the back, Trump’s private attorney displayed a nameplate, “Rudy Giuliani, Private Office.” In an upstairs room, Giuliani and his team planned the Ukraine outreach that would lead to Trump’s first impeachment.

Maintaining the contract will now provide Trump with a huge salary. Trump won the GSA lease after pledging to spend $200 million to develop the property. Reviewers scoffed at the price, which was way higher than what other companies were willing to pay.

Now his $200 million bet on the property — like many of his bold political bets — will pay off, likely earning him a profit of more than $100 million, hotel experts said, even after accounting for the loan from $170 million to Deutsche Bank that he has to pay off, the operating losses he suffered and a complex revenue-sharing deal with the government.

The profits stem from the willingness of CGI Merchant, whose investors include celebrity athletes Alex Rodriguez and Floyd Mayweather, to pay more than some hotel analysts believe would generate a profitable return.

“We are thrilled 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 closely together to have a lasting and positive impact on the Washington, DC community” , said Raoul Thomas. , CEO and founder of CGI, in a statement released Wednesday.

“Hilton is committed to serving any guest, with any travel need, anywhere in the world, and we are thrilled to partner with CGI to expand our presence in the nation’s capital,” said Chris Nassetta, Chairman and CEO of Hilton, in a report.

By any measure, the $375 million prize is a record for Washington. Hotels are charged per room or “per key”. In Washington, the high point came in 2016, when the Capella Hotel Georgetown — now the Rosewood Hotel — sold for about $1.3 million a key, according to industry data. At $375 million for 263 rooms, the proposed Trump sale would be about $1.43 million per key, 10% more than the Capella sale, despite the requirement that CGI pay the government base rent more than $3 million per year.

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

The GSA completed a cursory review of the sale in March.