Seven years ago, Donald Trump opened a luxurious hotel in the Soho neighborhood of New York City. From its inception the condo/hotel, which climbs 46 stories, was a troubled project. Human remains were found at the site and historians pointed out the site was where an abolitionist church, Spring Street Presbyterian Church, held services in the 1800’s. That had little significance or meaning to the Trump Organization as their construction continued to rape an important part of New York history. Protesters were constant. They organized a campaign, Dump the Trump, and were adamant the hotel was breaking zoning rules.
Behind the scenes, more issues. An influential employee involved in the project, Felix Sater, had a criminal record. He had previously been convicted of fraud in a money laundering and stock manipulation scheme. The scheme involved $40 million dollars, 19 stockbrokers and organized crime, and was spearheaded by the Russian Mafia. Sater pleaded guilty and worked as an informant for the feds as his punishment. Sater’s intersection with the Soho building was his role as a senior adviser to Trump and the Trump Organization. Sater worked on the Trump Soho project from the beginning and was intimately involved with the construction.
In 2008, a construction worker fell to his death and others were hurt after a part of the construction collapsed during the pouring of concrete. The construction worker fell from the 42nd floor.
Then there was the lying. The Trump kids whose job it was to sell the units told buyers the condo units were hot property and in high demand. They weren’t. Their claim that 60% of the units had been purchased when it wasn’t true was fraud. It fell upon the Manhattan district attorney’s desk but Cyrus Vance Jr. refused to charge the Trumps with felony fraud. He was persuaded not to by a Trump donor and attorney.
In April, the sushi restaurant closed because of post-election reasons. But it was LeBron James that added a more dramatic layer to the story of the Trump Soho.
“After LeBron James publicly refused to stay at the hotel last year, the corporate clients and 20 or so sports teams that had been regular guests almost entirely disappeared. Porters whose base salaries were once buoyed by up to $60,000 a year in gratuities have earned half as much in tips. Many employees, some of whom are immigrants from countries targeted by Mr. Trump’s policies, have quit.” (New York Times)
When LeBron James adamantly and provocatively said he would never stay at the Trump Soho, exclusive guests, the wealth class, the celebrity class, and the corporate class, began cancelling their reservations and going elsewhere, emboldened by LeBron putting it on record his aversion to staying anywhere that has the Trump name on it. Last December, James stayed at a different hotel while the team kept their reservation. This year, the Cavaliers didn’t stay at the Soho, and 19 other NBA teams booked alternative lodging for their NY stay. In effect, James was the rich man’s Colin Kapernick, the face of a protest based on and incentivized by Trump disgust.
Because of James, the Soho has had a hard time keeping rooms occupied and had to lower prices which then cut into their ability to make a profit. An empty hotel is a hotel that is failing and is about to be on the market.
Desperate, the hotel has now parted ways with Donald Trump. His name will no longer be on the hotel. The condos are cautiously optimistic that the Trump name divestment will spark an interest in sales. That is if everyone forgets Trump’s role in the hotel.
As is the case for many hotels with Trump’s name on it, he doesn’t own the actual hotel. His company manages the running of it. A deal to grab the hotel from Trump hands has been executed.
The owner of the hotel, CIM Group, will pay Trump to go away. In turn, they hope that business picks up, those luxury clients such as LeBron James and the NBA. Once that happens, they will sell the hotel.
In basketball terms, the Donald was bought out of his contract. He can disappear and take his buyout money and not worry about LeBron James costing him money.
But he still has Trump problems. The hotel is of interest to Special Counsel Robert Mueller because of the murky funding, and money laundering rumors that continue to dog the hotel.