Donald Trump snags Old Post Office Pavilion in D.C.
WASHINGTON -- Donald Trump finally has gotten a foothold on Pennsylvania Avenue in the nation's capital.
But it's not, as he hoped in a brief bid for the Republican nomination for president last year, at the White House. It's five blocks east, at 1100 Pennsylvania Ave. NW, at the Old Post Office Pavilion.
The Trump Organization has signed a 60-year lease with the General Services Administration to spend $200 million to redevelop the historic landmark -- and longtime money-losing white elephant with a food court and small stores -- into a "superluxury hotel."
The Trump Organization will pay $3 million a year in rent that will rise with the Consumer Price Index in a deal that has been in the works for the last two years in a competitive process among 10 bidders.
The deal, signed last Monday, has sparked some controversy, with at least two losing bidders complaining that Trump's proposal was financially unrealistic.
One filed a formal complaint noting that other Trump projects have flopped. The bidder cited the $1.8 billion Chapter 11 bankruptcy filing in 2004 of Trump Hotels and more than 27 related holding companies, including the Taj Mahal and Trump Plaza in Atlantic City.
The complaint said Trump and his daughter Ivanka Trump would have to charge $700 or more a night for a room at the Old Post Office development to make ends meet. The General Services Administration rejected the complaint.
The GSA, which oversees federal properties, says the deal will save money. The building loses an estimated $10 million a year.
In a statement last week, Trump said "we're thrilled" about closing the deal.
"It is a responsibility we do not take lightly," he said about his plans for the Romanesque building, the second tallest structure in Washington, after the Washington Monument.
Trump plans to use the space for a hotel with 270 rooms, restaurants, a cafe, a bar and lounge, ballroom and meeting facilities, a library, a museum, a gallery and gardens and a 4,000-square-foot Mar-a-Lago Spa by Ivanka Trump.
The Trump Organization said it will reveal its final plans in a few weeks. The company will start work on the renovation next year, and plans to open it by the end of 2015 or early 2016.
The citizens group that saved the Old Post Office from demolition in 1971 backs the deal. Rebecca Miller, executive director of the DC Preservation League, said, "We support the adaptive re-use of this Washington landmark, which will contribute to the city's economy and maximize the unrealized potential of this historic resource."