DC Trump Hotel Will Be Waldorf Astoria by End of April
WASHINGTON — Control of the Old Post Office Building in Washington, D.C., will be sold to Miami-based investment firm CGI Merchant Group by the end of April when it will become a Hilton-affiliated hotel.
The historic building is currently the site of Trump International Hotel in Washington and is under lease with the Trump Organization, which is transferring its contract agreement over to CGI for $375 million. Although the deal has been in the works since mid-November, the General Services Administration only cleared CGI’s acquisition of the federally-owned property in late March.
The Old Post Office Building and Clock Tower, the second tallest structure in the nation’s capital after the Washington Monument, stands centered on the north side of the Federal Triangle and occupies an entire city block.
Its construction took seven years to complete between 1892 and 1899 and it was nearly demolished after the Great Depression and in 1964 when the President’s Council on Pennsylvania Avenue recommended razing all but the iconic clock tower.
D.C. residents successfully lobbied the government to save the building with help from National Endowment for the Arts Chair Nancy Hanks, and redevelopment plans for the Pennsylvania Avenue corridor in 1977 included its preservation. The building was added to the National Register of Historic Places in 1973.
Once the deal’s ink is dried, the building located on Pennsylvania Avenue will be rebranded as a Waldorf Astoria luxury hotel. GSA officials said the agency based its decision to approve the transfer in part on the parties’ equity and material credit support to assist with debt financing.
The federal government retains ownership of the building under the agreement while CGI will financially operate the business. During Trump’s tenure as president, the hotel served as a place of gathering for his allies and supporters in addition to housing numerous foreign dignitaries on diplomatic outings in Washington.
Although Trump resigned from operating his business entities prior to taking office, his refusal to fully divest from them led accountability groups to scrutinize the arrangement. Citizens for Responsibility and Ethics in Washington tracked 12 payments made by foreign governments to Trump properties during his second year in office alone, a practice they contend violates the Constitution’s foreign emoluments clause in a January 2019 report.
“Donald Trump should never have been allowed to keep his D.C. hotel as president. He should have divested himself of it along with the rest of his businesses before taking office,” CREW President Noah Bookbinder said in a written statement. “Instead, he rode out four years of using it for influence peddling and constitutional violations.”
Trump’s longtime accounting firm, Mazars USA LLP, severed its relationship with the former president in February and instructed the Trump Organization to retract its financial statements ending June 2011 through June 2020, according to court filings. Those filings were disclosed amid an ongoing civil investigation into Trump’s business practices spearheaded by New York Attorney General Letitia James.
The revelation that three years’ worth of financial statements Trump relied upon to obtain the Old Post Office Building’s lease may have contained significant omissions in listed assets and liabilities prompted the House Committee on Oversight to intervene. In February, The Well News reported members of the Oversight Committee submitted a letter to GSA Administrator Robin Carnahan requesting the agency consider canceling his lease rather than allowing him to sell it for profit.
Despite taking out a $170 million loan from Deutsche Bank in 2014 to pay for renovations to the building, the Trump Organization’s sale to CGI would net a profit of roughly $100 million. The Trump Organization reported in tax filings that the hotel’s annual revenue ranged from $15 million to more than $40 million between the years of 2016 and 2020.
“The [Oversight] Committee has long focused on the serious conflicts of interest posed by then-President Trump’s continued lease of the Trump Hotel from the federal government during his presidency,” the text of the letter to Carnahan read. “Although the sale of former President Trump’s lease of the Old Post Office Building may appear to address some of those conflicts, commentators have raised concerns that the $375 million sale price is at least $100 million above market value.”
In the face of serious charges against him and his father’s business, Trump Organization Executive Vice President Eric Trump publicly rebuked the assertions in a New York Times interview by pointing out the hotel’s profits collected from foreign government officials’ stays were donated to the Treasury Department.
Reece can be reached at [email protected]
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