The Trump Organization was the General Services Administration’s choice to redevelop the Old Post Office Pavilion, but the company did not offer the government the highest monthly lease payments of any of the respondents.
A development team led by Monument Realty, survivor of a tumultuous ride through the recession, submitted a proposal for the Old Post Office offering the government $5.1 million annually in base rent with escalations based on the building’s performance.
In February, Washington Post columnist Steven Pearlstein reported that Trump had offered a base rent of $3 million to the GSA, citing an anonymous source. A GSA spokesman declined to comment on either company’s proposal, citing procurement rules. Ivanka M. Trump, Donald Trump’s daughter and executive vice president of development and acquisitions for the Trump Organization, also declined comment.
Though rent to the government for the building was only one of numerous factors considered by the GSA, it has been a focus of members of Congress looking to squeeze savings out of the federal government’s real estate portfolio.
The GSA scored responses on four categories: experience and past performance of the developer (15 percent of total); site plan design concept (35 percent); the developer’s financial capacity and capability (15 percent) and the developer’s financial offer and supporting financial information (35 percent). GSA officials have withheld information about submissions except to say that there were 10.
The many factors make it difficult to compare competing bids; while Monument’s team offered more in rent, for example, Trump offered to invest more in redeveloping the building ($200 million) than Monument ($116.5 million).
While Trump planned a 250-room luxury hotel, Monument teamed with financial partner Angelo Gordon to propose a 260,000-square-foot office building with a media center in the bottom floors with television studios, production studios and theater space. Monument may have run afoul with historic preservationists, however, by planning to replace the annex behind the building with a parking garage.
Monument principal Michael Darby said he would have been able to make the lease payments by charging $65 a square foot for the offices, lower than in buildings nearby. “We’ve discounted off the high water mark that’s been achieved on Pennsylvania Avenue because of the idiosyncracies of the building,” he said.