In February 2012, Donald Trump beat out Hilton and Hyatt in a first bidding round to redevelop the Old Post Office building in Washington, D.C. Just recently, Buzzfeed News used the Freedom of Information Act to gain access to a document that reveals how Trump leveraged a mere $2.4 million equity investment to gain control of the $200 million project.
Originally, Trump made his initial proposal for the project with international real estate investment firm Colony Capital, but the equity partner dropped out of the deal this past spring. According to the Washington Post, the "timeline became too long for the firm."
The government has still yet to release Trump’s original proposal that won the bid. Buzzfeed News reported, "What is known is that Trump found ways to leverage his own wealth without putting cash on the table." Trump put down a security deposit of $4 million in the form of a letter of credit. He also was listed as the personal guarantor of the project, signing a $40 million guaranty with no cash up front.
Buzzfeed News further reported:
"After winning the competitive bid for the project, Trump used the federal lease itself as collateral to borrow $170 million from Deutsche Bank for the hotel renovation. And Trump has applied for a federal tax credit worth about $32 million that would help offset the cost of the project."
After the initial $2.4 million equity investment, Trump, in a claim made in 2015, said he added $42 million into the project. A Trump Organization executive reaffirmed this statement by telling Buzzfeed News that Trump invested $40 million into the project, separate from the $40 million guaranty. There are still no publicly released records that prove the investment took place.
The new document that Buzzfeed News reported on also shows that Trump gave his three children more than 22% of the project. "None of it is simple," reported Buzzfeed News, which further stated that the company that owns the project is a corporation that Trump created, which "is in turn owned through a web of holding companies owned by Trump and his children." None of Trump’s children invested money of their own into the project.
When complete, the planned Trump Hotel in Washington, D.C. will feature a total of 263 rooms, 228 of which will be guest rooms and 35 of which will be suites. One of the suites, named the Trump Townhouse, will be 6,300 square feet and have a private entrance on Pennsylvania Avenue. For the most basic rooms, the cost to stay at the hotel will be $795 per night.