Trump Hotel Sale Will End an Era: “It was America’s lobby of corruption”

From a New York Times story by Eric Lipton headlined “Checking Out: Trump Hotel Sale Will End an Era”:

It’s last call at the bar of the Trump International Hotel in Washington.

The hotel — which for much of President Donald J. Trump’s four years at the White House served as his dining-out spot, a gathering place for his allies and a bazaar of sorts for those seeking influence and access — is slated to be sold in the coming days to a Florida investor group that will take down the Trump name and rebrand it as a Waldorf Astoria.

Even though it opened only a few weeks before Mr. Trump’s election in 2016, the 263-room hotel quickly achieved a status in Washington that historians agree was unlike that of any other venue owned by an American president.

The sprawling lobby turned into a gathering spot for Mr. Trump’s cabinet, Republicans in Congress, foreign dignitaries, religious conservatives and Trump fans from across the United States, as well as Mr. Trump himself. The hotel generated millions of dollars in direct payments to Mr. Trump’s family, starting from even before he was sworn in, as his own inaugural committee paid the venue more than $1 million.

The hotel is being sold to a Miami-based investment firm, CGI Merchant Group, for $375 million, delivering an estimated profit of more than $100 million to the Trump family, even after it pays off its debts and accounts for other money spent on the hotel since it opened. The sale is expected to close before the end of the month, according to an executive involved in the transaction.

The transfer of the lease has already been approved by the General Services Administration, the federal government’s landlord, after the agency confirmed that CGI and Hilton, which controls the Waldorf Astoria brand, have the financial capacity to own and manage the hotel.

CGI declined to provide details of its plans for the hotel. Hilton also would not comment, other than saying in a statement that “we continue to recognize the opportunity for growth in the nation’s capital and hope to have more to share soon.”

The building, on Pennsylvania Avenue, is owned by the federal government. A landmark with a 315-foot clock tower that makes it the third-tallest building in Washington, the structure was home to the headquarters of the United States Postal Service until 1934 and is formally called the Old Post Office Building.

Even before Mr. Trump was sworn in, the hotel became a magnet for foreign officials, including from Saudi Arabia, whose government rented out a block of rooms, spending $190,000 on its room tab and another $78,000 for meals and beverages, lobbying disclosures show.

Soon enough, foreign business and government groups from Bahrain, Kuwait, Turkey and Azerbaijan, among others, followed by hosting events at the hotel, with representatives from at least 33 nations sighted there by Zach Everson, a journalist who created an online newsletter tracking social media posts from the hotel during Mr. Trump’s presidency.

In total, at least 29 Trump cabinet members and at least 35 Republican senators were spotted at the hotel, according to Mr. Everson’s count. Treasury Secretary Steven Mnuchin lived there for a while after he first relocated to Washington; the federal government even covered the $33,000 tab for members of the Secret Service who stayed at the hotel to guard him.

Lobby regulars included Rudolph W. Giuliani, the former New York mayor and personal lawyer for Mr. Trump, as well as Corey Lewandowski, Mr. Trump’s onetime campaign manager, and the sisters Lynnette Hardaway and Rochelle Richardson, conservative celebrities known as Diamond and Silk who were promoters of Mr. Trump’s agenda.

Jon Meacham, a presidential historian, said that never before had there been a venue like the Trump hotel, where supporters of the sitting president could effectively pay tribute to him by frequenting a business he owned a few blocks from the White House.

“No, no, no, no,” he said as he listed the names of various presidents, trying to find any other time that Washington featured a similar kind of gathering place. “It is a vivid symbol of the commercialization of the American presidency, which is regrettable,” he said.

Even some frequent visitors eventually were turned off by the excesses on display in the lobby, which became a major venue for fund-raisers by the Republican National Committee, Mr. Trump’s own political committees and dozens of other Republican candidates seeking his support.

The hotel “was America’s lobby of corruption,” said Healy Baumgardner, a political consultant who worked on Mr. Trump’s 2016 campaign and later was hired by the government of Malaysia as a consultant. “It was grifters central.”

Eric Trump, a son of the former president and an executive vice president at the Trump Organization, has repeatedly pointed out that the hotel donated to the U.S. Treasury any profits collected as a result of stays by foreign government officials at the hotel, and took other steps to avoid ethics questions, such as not actively soliciting business from foreign governments.

In an interview this week, Eric Trump said he could not discuss details of the sale. But he said he remained proud of the work that the Trump family did after leasing a rundown gem of a federal building and turning it into what he called one of the most beautiful public spaces in Washington. The company spent extra money during the renovations, for example, to preserve architectural details like the original oak doors, the fireplace in the former postmaster general’s office and the steel frame in the hotel lobby that once held a glass ceiling above the mail sorting room.

“It was dirty and decrepit when we first saw it,” Mr. Trump said of the building, recalling a visit before the family bid on the lease for the structure, which was the first steel-frame building in Washington when it opened in 1899. “What we realized was you could build something great here. You could uncover something wonderful. And we did.”

But various Washington government accountability groups that tracked events at the hotel said its most important legacy was a trail of ethics abuses. One group, Citizens for Responsibility and Ethics in Washington, counted what it said were at least 1,320 conflicts that played out at the hotel during Mr. Trump’s four years in office. They included lobbying outfits like the American Petroleum Institute holding events at the hotel at the same time as it had set up White House meetings.

During Mr. Trump’s presidency, spending at the hotel became a target for legal action, with attorneys general in Maryland and the District of Columbia, among others, filing lawsuits citing the hotel as the primary exhibit in claims that Mr. Trump was violating the Constitution’s emoluments clause by accepting payments from foreign governments. The cases were deemed moot by the Supreme Court once Mr. Trump left the White House.

The Trump hotel in Washington will be the fifth hotel since 2017 to lose its Trump brand, which has also been stripped from hotels in New York, Toronto, Panama City and Vancouver, British Columbia, leaving the family with just five major hotels in the United States, as well as its golf courses and other properties.

Overall, Mr. Trump reported annual revenue from the Washington hotel that ranged from $15 million to more than $40 million from 2016 through 2020, with room rates averaging about $500 a night. An unusually large share of the hotel’s overall revenue came from food and beverage sales, reflecting the nearly constant crowd in the lobby, at least for the first three years of Mr. Trump’s tenure, before the coronavirus pandemic took hold.

The Trump family took out a $170 million loan from Deutsche Bank in 2014 to finance renovations to the building. But even after that loan is paid off and various payments the family made to cover operating losses are accounted for, the family will generate a profit of about $100 million, House investigators estimated after the sale was announced.

The pandemic, followed by Mr. Trump’s departure from the White House, had already resulted in a significant decline in business at the hotel, which is perhaps most famous for its sprawling lobby, set up in a nine-story skylit atrium with giant crystal chandeliers that hang over a collection of couches, leather chairs and lounge furniture.

The downturn was evident on the menu at the hotel’s Benjamin Bar and Lounge, as the $120 Trump Tower — a one-pound lobster, eight oysters, four clams and shrimp — and other high-end items disappeared. The Brioni boutique, an outlet of the luxury Italian suit maker whose customers included Mr. Trump, has moved out, while the Ivanka Trump spa is closed and BLT Prime, the main restaurant, will most likely soon close, too.

But the hotel still draws conservative political activists and lobbyists. On one recent evening, nearly two dozen pork farmers and producers who were in Washington to lobby Congress sat across from a Republican women’s group, sipping on cocktails and glasses of chardonnay.

Others in the lobby included out-of-town tourists who wanted to see the hotel before the Trump name is ripped from the facade.

Eric Lipton is a Washington-based investigative reporter. A three-time winner of the Pulitzer Prize, he previously worked at The Washington Post and The Hartford Courant.

 

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