President-elect Donald Trump's hotel company might need to relinquish its new Washington hotel because of terms in the long-term
lease the Trump Organization signed with the U.S. General Services
Administration (GSA), which oversees the property that was previously the Old
Post Office Pavilion.
The 60-year ground lease for the Trump International Hotel
Washington D.C., which the Trump Organization signed in August 2013, dictates
that no "elected official of the government of the United States ... shall
be admitted to any share or part of this lease or to any benefit that may arise
therefrom," according to a copy of the lease provided to Travel Weekly by
the GSA.
The Trump Organization pays the GSA $3 million a year for the D.C. hotel's ground lease.
And merely transferring operational control from Trump to
his adult children Donald Jr., Ivanka and Eric, as he has said he plans to do,
won't resolve the issue, according to Steven L. Schooner, the Nash &
Cibinic Professor of Government Procurement Law at the George Washington
University Law School. Schooner co-authored a Nov. 28 article in Government
Executive outlining the issues.
As a result, the only solution would be for "the GSA
and Trump to transfer the entire lease to Marriott or Four Seasons or another
firm" in time for Trump's presidential inauguration on Jan. 20, Schooner
said.
The Trump Organization pays the GSA $3 million a year for
the ground lease.
Complicating such a process is the fact that unlike Trump's
other properties that are managed and branded but not owned by the company, the
Trump Organization and its financial partners invested about $200 million
redeveloping the 117-year-old landmark into the 263-room luxury hotel, which
opened in September and held its grand opening in late October.
"It is the Office of Government Ethics that provides
guidance to the executive branch on questions of ethics and conflicts of
interest," said a GSA spokesperson. "GSA plans to coordinate with the
president-elect's team to address any issues that may be related to the Old
Post Office building."
Trump, in a series of Nov. 30 tweets, said he would announce
on Dec. 15 how he would recuse himself from his organization's business
operations and leave them to his children. Representatives for the Trump
Organization didn't respond to requests for comment from Travel Weekly.
"While I am not mandated to do this under the law, I
feel it is visually important, as president, to in no way have a conflict of
interest with my various businesses," Trump tweeted.
The GSA said in 2008 that the Pennsylvania Avenue property,
which was built in 1899, would be redeveloped, and it awarded the bid to the
Trump Organization in 2008. Trump beat out Hilton Worldwide, which had proposed
a Waldorf Astoria for the site, as well as Hyatt.