Trump Gets Approval To Sell D.C. Hotel To Miami Group Backed By A-Rod, Floyd Mayweather
The federal government has ruled The Trump Organization can sell the lease for its D.C. hotel, a move opposed by some Democrats who have sought to prevent former President Donald Trump from profiting from the property.
Miami-based CGI Merchant Group can now move forward with its acquisition of the lease and its plans with Hilton Worldwide Holdings to convert the hotel into a Waldorf Astoria, the General Services Administration confirmed to the Washington Business Journal.
The investment group includes former Major League Baseball superstar Alex Rodriguez and boxing champion Floyd Mayweather, the Associated Press reported.
In November, Trump reached a deal to sell the Trump International Hotel in the Old Post Office Building at 1100 Pennsylvania Ave. to CGI Merchant Group for $375M, The Wall Street Journal reported at the time.
Trump began marketing the hotel in 2019, when it retained JLL as its broker, but that process was scuttled by the pandemic. Newmark was marketing the lease's sale as of June, The Washington Post reported.
Friday, the GSA said it was proactively releasing a 21-page statement in support of the deal "in light of the anticipated public interest surrounding the assignment." It said the determination was primarily based on Hilton's ability to support the deal and operate the hotel as a high-end brand, an initial condition of the 60-year lease given to Trump.
After Trump first acquired the lease in 2013, his company embarked on a $200M renovation to transform the former General Post Office building in D.C. into the 263-room Trump International Hotel. The hotel opened in September 2016, two months before Trump was elected president.
Since reports of the pending sale emerged, members of the House Committee on Oversight and Reform have called for the GSA to terminate Trump's lease and prevent him from profiting from its sale. Those congress members cited Mazars USA, Trump's longtime accountant, which disavowed 10 years of financial statements it had prepared for the Trump Organization.
There have been other questions about the financial realities of the hotel. The Democratic leaders from that same congressional panel, Oversight Committee Chair Rep. Carolyn Maloney and Subcommittee on Governmental Relations Chair Rep. Gerry Connelly, wrote a letter to the GSA saying that Trump's business concealed over $1B in debt when it initially applied for the lease at the Old Post Office Pavilion.
They also noted the Trump Organization lost nearly $74M while operating the hotel from 2016 to 2020.
In the GSA's statement of assignment, the agency found the deal sale to be reasonable, and it said the brokers attested to receiving multiple offers in the ballpark of CGI's ultimately successful bid. The GSA also said the dollar per key amount for the sale "was on par with similar transactions."