GSA approves sale of Trump Organization’s Washington hotel lease
By Kara Scannell, CNN
The General Services Administration has approved the buyer of the lease for the Trump Organization’s luxury hotel in Washington, paving the way for the deal to move forward.
The GSA said it had contracted a third-party consultant to evaluate CGI Merchant Group and its partner Hilton Worldwide Holdings Inc., which will operate the hotel as a Waldorf Astoria property. After a review, it said, it had determined CGI is a “qualified transferee” and Hilton is a “qualified operator,” a necessary step for Trump to sell the lease. The GSA said its contracting officer had notified the Trump Organization of its determination on Friday.
The Trump Organization did not immediately respond to a request for comment. A spokesman for CGI declined to comment.
A person familiar with the deal says it is on track and could be announced in the coming weeks.
CNN previously reported the Trump Organization had reached a deal to sell the lease for the ornate building for $370 million.
The hotel has been a source of controversy — and the subject of lawsuits and investigations — since Donald Trump became president. It was a meeting ground for Republicans and others who sought to cozy up to the then-President. But it also drew scrutiny by Democrats who believed Trump was improperly profiting from his presidency.
The GSA, which manages federal buildings and land, awarded the lease for the Old Post Office building to Trump in 2012. Trump opened the hotel in 2016, when he was the Republican nominee for president.
When he took office, Trump resigned from his companies but transferred his assets to a trust run by his sons, allowing him to still benefit financially from the DC hotel and his other businesses.
Documents released by the House Oversight Committee showed the hotel received millions from foreign governments in payments and loan deferral, which Trump did not disclose, raising questions about potential conflicts of interest during his presidency. The committee asked the GSA last month to terminate the lease before Trump could sell it, to prohibit the Trump Organization from profiting off the sale.
The GSA said its review had determined that the sale price was reasonable.
“The contracting officer does not have any basis to conclude that the sale value of the lease is commercially unreasonable or inconsistent with market demand,” it said. “The brokerage firm hired by Tenant to market the Lease indicated to the contracting officer that there was broad interest in acquiring the leasehold interest and it received multiple offers in the same range as the sale price to CGI. Moreover, in the contracting officer’s opinion, the dollar per key amount (a common metric used to evaluate the sale of hospitality assets) was on par with similar transactions.”
It added that Trump and CGI believe that the hotel, which was not profitable under Trump, would “generate significantly more revenue than is currently being generated, based in a large part in being able to bring more guests to the hotel.”
This story has been updated with additional details.
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