In a letter delivered to The Trump Organization yesterday, a US government agency acting as landlord to the President’s luxury hotel in Washington DC has determined the President’s hotel is in compliance with its lease.
The GSA lease, discussed earlier here at CRE Blog, has a 60-year term on the renovated former US Post Office Pavilion property that the President, while in real-estate developer mode, converted to the luxury Trump International Hotel D.C.
The GSA, whose purpose is to manage half a trillion dollars worth of federal property in a portfolio of over 8,300 owned and leased buildings, sent the letter in response to unique questions arising from the non-divestment of President Trump from his portfolio of properties. GSA is the owner of the building in question and was called upon to review the structure of the lease for compliance.
The letter is fascinating in that it provides a rare view into an operating structure of a Trump property, plus a snapshot of some of the Trump / Trump family’s real estate empire’s various legal structures. It also references that the hotel operations group undertook changes to Section II of its internal operating agreement in order, one assumes, to achieve compliance.
Getting Paid? No, says GSA.
CBS Marketwatch reports that the changes and structure as expressed in the letter makes it so that distributions sourced from the hotel will not make it to the pocket of the President; such funds instead will remain within the operating LLC rather than going to his ownership vehicle.
Download the entire GSA letter here — and take a long look at what full compliance means in these unprecedented times.