“But we’re opening the Old Post Office. Under budget, ahead of schedule, saved tremendous money. I’m a year ahead of schedule. And that’s what this country should be doing.”
A reader noted that we had missed this claim in our roundup of 23 claims from the debate. This claim is difficult to fact-check, because the hotel has not yet fully opened and we are limited by information that the Trump Organization provides. Here’s what we know so far.
In June 2013, the General Services Administration (GSA) and the Trump Organization announced that they had completed negotiations on a 60-year lease agreement, after the Trump Organization won the bid. The Trump Organization agreed to renovate the federal building into a luxury hotel and pay a monthly rent of $250,000 to the federal government.
The June 2013 announcement said the project would begin in 2014 with an opening scheduled for 2016. On debate night, other news outlets noted that the scheduled opening date had been moved a couple times, which is not unusual for a large construction project like this. In August 2013, the Trump Organization announced that it anticipated a grand opening at the end of 2015. Then, in December 2014, the organization announced that the hotel would open mid-2016. As of February 2016, the scheduled opening date was September.
During a June 2016 deposition for a lawsuit over the project, Trump said the completion date was moved to the end of 2015 when construction was ahead of schedule. But it was changed back to 2016 because “we wanted to take a little bit more time and make it, you know, just perfect, because it was so far ahead of schedule, which was ’18, actually,” he said according to the transcript, released in response to a court motion filed by BuzzFeed.
Trump is referring to the final deadline set through the company’s agreement with the federal government.
“Under the agreement with the U.S. government’s General Services Administration (GSA), the hotel was scheduled to be completed by August of 2018. Through the team’s hard work and close collaboration with the GSA, the hotel opened more than a year ahead of schedule,” a spokeswoman for the hotel said.
The Trump Organization’s newest hotel opened in a “soft launch” on Sept. 12, offering just over half of its roughly 260 rooms for reservation. While guests stayed in rooms at rates of at least $700 per night, construction workers and staff were still working on the hotel. The formal opening is now scheduled for October.
Given Trump’s plan to run for president, we wonder whether Trump knew the project would be done long before August 2018 — at least no later than Inauguration Day in 2017.
Jonathan O’Connell, our colleague who has been covering this project closely, noted: “The 263-room giant’s formal grand opening is scheduled for next month [October], just days before the election. But its most pivotal moment probably won’t come until Inauguration Day, when either a newly elected President Trump parades past the gleaming Pennsylvania Avenue icon — or a President Hillary Clinton strides by the newest showpiece of her vanquished foe’s empire. During inauguration weekend, a night in the Trump Townhouse costs $100,000, with a five-night minimum.”
Was it “under budget”? That’s difficult to say, at least until the Trump Organization announces how much it had spent on the project. Neither the GSA nor the hotel spokeswoman answered our requests for this information.
The Trump Organization has proposed to spend $200 million to $212 million (though another document shows the total cost estimated at $196 million). Of that, $40 million to $42 million was in equity and $170 million was borrowed from Deutsche Bank. To secure the loan, Trump put up his lease with the federal government as collateral, according to a document obtained by BuzzFeed, for its deep dive into the hotel’s finances. The bank would take over the lease if Trump doesn’t finish the hotel or failed to pay for it.
It’s unclear how much of the $40 million to $42 million in equity came directly from Trump himself. An ownership agreement obtained by BuzzFeed shows five Trump entities named as the building’s tenant, with DJT Holdings LLC paying $2.4 million in equity and Trump Old Post Office Member Corp. paying $23,936 in equity.
The Pinocchio Test
There are too many factors up in the air right now for us to come to a Pinocchio rating. The hotel hasn’t fully opened yet, but it still has nearly two years left until its agreed-upon completion date of August 2018 with the federal government. Neither the Trump Organization nor GSA has provided information to The Fact Checker about how much has been spent on the project so far. We will leave this rating as a Verdict Pending until we can obtain more information.
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