December 02, 2016

According to Travel Weekly, M&C's sister publication, 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, 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.

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 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.

Read more here.