We may see the return of the Trump hotel in Washington, D.C., which has previously drawn scrutiny over potential conflicts of interest.
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Timothy Noah, writing for The New Republic, explained that one of President Donald Trump’s crusades over the past year is selling tons of government buildings and assets, and they’re doing it at remarkably low prices. Noah noted that it’s not entirely smart since the commercial office space world has been shrinking. The pandemic showed corporations that they can achieve the same without much overhead of an office building. The fire-sale is “making the GSA look very foolish as it claims thrifty stewardship of the taxpayer dollar.”
One of those buildings Noah has kept his eyes on is the Wilbur J. Cohen Federal Building. Last year, the GSA declared it an “accelerated disposition.” The historic value of the building is priceless with “murals by Philip Guston, Seymour Fogel, Ethel and Jenne Magafan—and most especially Ben Shahn, whose dry frescoes along both sides of a 70-foot lobby corridor, ‘The Meaning of Social Security…'”
He pointed out that Sen. Joni Ernst (R-Iowa) never knew there was priceless artwork in the building when she agreed to sell it. Once she found out about the artwork she cared even less, saying in a letter, “let the property’s buyer decide its artwork’s fate.” Luckily, there is a mission afoot by some lawmakers who have been encouraged to stop the sale. Some Republicans have been willing to join in the historic preservation of Washington buildings and the artwork they contain.
Thus far, there have been three buildings that the GSA has already sold: the GSA’s own Regional Office Building, the Liberty Loan Building and the Old Post Office Building. The first was unloaded at “less than one-tenth” the value, the report said. The second was ” about one-fifth the average sale price for a D.C. office building in the current depressed market.”
The Old Post Office Building, which Trump renovated into the Trump International Hotel, where anyone attempting to curry favor with the president would stay, funneling more money into his family’s pocket. Noah referred to it as a kind of “kleptocratic vortex” until it was ultimately sold after Trump’s term. It was sold at $80 million. When Trump unloaded the lease of the building after making $200 million in renovations, he sold it for $375 million, and that was only for the lease agreement, not for the building itself.
“Trump got paid for the renovated Old Post Office $452 million, or $972 million per square foot—again, just for the lease,” the report explained. So, if there was a bidding war and a buyer managed to get it for $400 million, it would be less than the lease alone sold for in 2021, finalized in 2022.
The Wall Street Journal reported earlier this year that Eric Trump has been sniffing around.
Read more Trump fails again
Now Trump is “poised to re-purchase not just the lease but the entire building at a heavy discount, shredding whatever remains of the Constitution’s emoluments clauses as he uses the presidency to expand his fortune at a rate of $1 billion or more per year.” He called it Trump’s “premier shakedown venue,” and the anticipation is that the move would return. The larger problem with the purchase, however, is that Trump is only in office for a few more years.
While Trump scored major cash from allies willing to pay to win Trump’s favor, he still ended up about $70 million in the hole. So, when he sold it at $375 million, the most expensive hotel in Washington, he made about $100 million. The purchaser ultimately fell into foreclosure.
John Phelan, one of Trump’s biggest financial backers, is the CEO of BDT & MSD Partners, which snagged the building for “an additional $80 million.”
“We know why GSA would be charitable; these folks work for President Donald Trump, who wants to repurchase the Old Post Office, this time at a less burdensome price. But why would BDT & MSD Partners be charitable? Because when Trump was trying to unload the Old Post Office back in 2021, MSD Partners’ chief executive was a Palm Beach neighbor named John Phelan. (Phelan left the firm in June 2022, seven months after the sale,)” the report explained.
Noah thinks that BDT&MSD would be happy to sell Trump his hotel back. Phelan scored a gig in the administration as the Secretary of the Navy.
If he buys it this time around, he’ll score $52 million less, after inflation, than what he got five years ago, and he’ll own the building and the land. Noah assumes Trump will ask for even less in an effort to maximize his profit.
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