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Reports: Trump selling DC hotel to investment firm for $375M

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The Trump International Hotel in Washington. (AP file image / Julio Cortez)

WASHINGTON – Donald Trump’s glorious White House hotel that has attracted lobbyists and diplomats seeking favor with the former president, as well as criticism as a symbol of his ethics disputes, has been sold to an investment group in Miami, according to published quotes from anonymous sources.

CGI Merchant Group has agreed to pay Trump $ 375 million for the rights to the 263-room hotel and has plans to rebrand it as Waldorf Astoria, according to The Wall Street Journal and The New York Times, Citing sources with knowledge on the subject.

Neither the Trump organization nor the CGI responded to many requests to comment.

The deal is expected to close early next year after which the hotel will be managed by Waldorf Astoria as part of a separate deal signed by CGI, according to Magazine. The Waldorf Astoria business is owned by Hilton Worldwide Holdings.

The hotel has been losing big money to the Trump family since it won the rights to convert a magnificent federal building called the Old Post Office from the federal government under a lease that with extensions could last nearly 100 years.

The federal agency that owns the property, the U.S. Department of General Services, must sign every sale.

The Trump organization raised $ 200 million to turn it into a luxury hotel, and opened its doors in late 2016, shortly before Trump became president. It then went on to lose more than $ 70 million over four years, according to audited reports received by a House committee that investigated Trump’s conflicts of interest with the business. The losses came even before the epidemic led to the shutdowns, hitting the hotel industry.

Ethics experts urged Trump to sell the hotel and other business holdings before taking office, but Trump refused and the hotel soon became a magnet for powerful and power-seeking: industry lobbyists trying to shape policies, Republican politicians seeking presidential action, and other Azerbaijani diplomats, diplomats and Azerbaijanis. .

Above all the hustle and bustle in his gleaming lobby was the question: How many did Trump make decisions a few blocks away in the Oval Office, shaped by his financial interests, and even if at all, why risk tarnishing U.S. policy even with a semblance of conflict?

Trump has dismissed such concerns, saying he is too busy in the business of government to bother making money from his office. The Trump organization has promised to send a check to the U.S. Treasury each year equaling profits from foreign government patrons, in response to criticism that it violates the benefits clause in the U.S. Constitution that bans gifts to foreign governments.

“The Trump DC Hotel stood as a bright neon sign that told foreign countries and financially vested interests how to bribe the president and an absolute reminder to Americans that his decisions as president are likely to be on his bottom line as well as on our interests,” he said. Noah Sprinder, President of Citizenship and Ethics in Washington, DC Dogs. “Sell it now that it’s out of order and the grief has dried it up, to say the least, too little, too late.”

The buyer, CGI, manages $ 325 million from wealthy families, entertainers and sports people, while investing in office buildings and hotels among other types of assets, according to its website. In addition, the firm partnered late last year with baseball star Alex Rodriguez and another investment firm to set up a $ 650 million fund to buy hotels and convert them to Hilton brands.

CGI has also launched a network of “socially aware” hotels that donate to local charities, support local businesses and buy eco-friendly products. In September, it announced it would open a hotel in Miami with a glass-bottomed pool overlooking the Atlantic Ocean called Gabriel South Beach as part of its social offering. The hotel will be part of the Curio Collection, the Hilton chain.

The head of the company, Raoul Thomas, a native of Jamaica, has made many contributions to Democratic Party politicians, including Joe Biden’s campaign. He is a senior board member of the National Association of Black Hotel Owners. His firm has invested $ 30 million in Morris Brown College in Atlanta for a hotel and hospitality training program at the historic Black Institution in Atlanta.

It is not clear how much money the Trump family makes from the sale given the fact that the terms of the deal were not disclosed. Hotel sales sometimes include the “profits” in which the seller will be transferred all the money promised only if the buyer reaches certain financial targets in the years following the closing of the deal.

The Trump family originally hoped to receive $ 500 million for the hotel when it first launched it in the fall of 2019. It was removed from the market, and then returned this year.

Some hotel experts were surprised by the reported deal price given how few businessmen, tourists and lobbyists come to Washington.

Bill Collins, senior vice president of commercial real estate broker Cushman Wakefield, said a $ 1 million price per room is the “top dollar” in the industry. According to this rough estimate, the Trump Hotel will be worth no more than $ 263 million, almost $ 100 million less than it received.

“They invested too much money in it and could not increase occupancy,” he told the AP last month. “Can anyone manage this better? Maybe, but only marginally.”

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