President-elect Trump may violate Old Post Office lease

On Jan. 20, 2017, Donald Trump will officially be president of the United States. His victory may come as vindication for a campaign that many doubted could pull in the needed votes, but holding our highest office may force him to vacate his newest property.

The Trump International Hotel Washington, D.C., officially opened its doors in September after the U.S. General Services Administration leased the Old Post Office Pavilion to a consortium led by The Trump Organization. Trump spent roughly $200 million renovating the building to be used as a luxury hotel and opening it a month before the election. While Trump doesn’t officially own the building, only the lease branding it with his name, Steven Schooner, a law professor at the George Washington School of Law, said in studying the contract for the hotel he found a clause prohibiting elected officials from taking any part in the lease of the property.

Clause 37.19 of the contract states: “No member or delegate to Congress, or elected official of the Government of the United States or the Government of the District of Columbia, shall be admitted to any share or part of this Lease or to any benefit that may arise therefrom.” 

Virtual Event

HOTEL OPTIMIZATION PART 2 | Now Available On-Demand

Survival in these times is highly dependent on a hotel's ability to quickly adapt and pivot their business to meet the current needs of travelers and the surrounding community. Join us for Optimization Part 2 – a FREE virtual event – as we bring together top players in the industry to discuss alternative uses when occupancy is down, ways to boost F&B revenue, how to help your staff adjust to new challenges and more, in a series of panels focused on how you can regain profitability during this crisis.

Because of this, Schooner recommended in a statement that the General Services Administration terminate the property’s lease before Trump officially becomes president. Schooner can give more than a few other reasons why the president should not be operating a hotel in our nation’s capitol, including the possibility of foreign leaders, diplomats or special-interest groups booking a room at the Old Post Office in order to earn favor with the commander in chief. 

Also, as president, Trump will act as both tenant and landlord for the building and will be tasked with appointing the administrator of the GSA, who would then manage Trump’s lease. While Trump has insisted he will keep his business dealings and the leadership of the U.S. separate once he is sworn in, his plan is instead to hand the reigns of Trump International to his children and conflicts could still arise.

For example, the current rent for the Old Post Office sits at $3 million per year, but this number is to be adjusted yearly during periods of financial disclosures.

“Some civil servant at GSA is going to sit down with the president of the United States' children to negotiate adjustments to a multimillion-dollar lease on an annual basis. That's incomprehensible," Schooner said in a statement.

Suggested Articles

Lodging owners who have the appropriate resources and capital have an opportunity to renovate at an accelerated rate and at more competitive prices.

The £18.4 million fine stems from a data breach discovered after the company purchased Starwood Hotels & Resorts Worldwide.

There are both positive and negative aspects to utilizing preferred equity capital, but it is often the best way to maintain ownership of the asset.