Trump Organization Seals a Deal to Sell Trump International Hotel
WASHINGTON — Donald Trump’s business empire reportedly plans to sell the lease to its Washington, D.C. hotel for $375 million to a Miami-based investment firm.
In addition to ending financial problems for the hotel, the deal also is likely to halt political controversy that ensnared Trump International Hotel since its opening in 2016.
The purchaser, CGI Merchant Group, plans to rebrand the hotel as a Waldorf Astoria, according to a story first reported by The Wall Street Journal. CGI is partnering with hotelier Hilton Worldwide Holdings to buy the hotel a short walk from the White House.
The deal still requires approval from the U.S. General Service Administration, which leased the building to the Trump Organization in 2012 on a condition that the soon-to-be president renovate it for his planned hotel. The building was formerly used as a post office but remains government property.
The Trump Organization agreed to invest $200 million to convert the building into a 261-room luxury hotel. The organization also agreed to pay the General Services Administration $3 million a year in rent.
Trump officially resigned from the Trump Organization when he became president but turned over the operations to his sons. As a result, he maintained a financial interest in the hotel and other family real estate holdings.
Before it opened, it was mired in protests and lawsuits that accused Trump of using the presidency to benefit his businesses.
Protesters commonly were seen outside the hotel protesting some of his administration’s policies, such as on immigration, gun control and foreign relations. Three major lawsuits were filed against Trump alleging conflicts-of-interest.
One was filed by the advocacy group Citizens for Responsibility and Ethics in Washington; a second by the attorneys general of Maryland and the District of Columbia and a third by Democrats in Congress. All of them accused the former president of violating the Constitution’s Foreign Emoluments Clause.
The Emoluments Clause restricts members of the federal government from receiving gifts, payments or employment from foreign governments without the consent of Congress. It was designed to prevent “corrupting foreign influences” over U.S. government officials.
Nevertheless, a former Mexican ambassador and other foreign representatives claimed they were encouraged by the Trump administration to stay at the president’s hotels when they visited the United States. A congressional report last month revealed Trump International Hotel earned about $3.7 million from foreign governments.
The first two lawsuits were dismissed as moot when Trump left the presidency. The lawsuit by Democrats was dismissed when a federal judge ruled they lacked authority, or standing, to sue.
In addition to political troubles, the hotel never appeared to be a financial success.
Last month, a House Oversight Committee report showed Trump International Hotel lost more than $70 million over the past four years despite publicly claiming it made tens of millions of dollars.
Its dilemma worsened as the COVID-19 pandemic shut down much of the hospitality industry. The company has been trying to sell the hotel since 2019.
The deal so far is a purchase and sale agreement, which means it might not close for months. If it is completed at the $375 million price, it would turn what had been a loss for the Trump Organization into a profit for its overall investment.
Tom can be reached at [email protected].
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