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By Che Odom
A Washington, D.C. judge ordered that a lawsuit against the city over property taxes on President Donald Trump’s Pennsylvania Avenue luxury hotel will go to trial ( Trump Old Post Office, LLC v. District of Columbia , D.C. Super. Ct., No. 2016-CVT-000010, scheduling order 8/14/17 ).
Trump Old Post Office LLC, the entity Trump created to build the $200 million Trump International Hotel, failed to reach an agreement with the city during court-ordered mediation in June, leading D.C. Superior Court Judge Alfred S. Irving Jr. to order a trial on the matter.
The company and the city have until Sept. 1 to make discovery requests. The case, which consolidates nine petitions representing individual lots comprising the hotel site, could go to trial in Spring 2018 if the parties stick to the court’s schedule.
Trump Old Post Office is contesting tax assessments against the downtown lots along Pennsylvania Avenue. The 263-room hotel, which opened in October, is housed in the castle-like Old Post Office on Pennsylvania Ave., completed in 1899, five blocks from the White House.
The lawsuit claims that the District of Columbia incorrectly assessed the Old Post Office property as a “fully functional and rent-producing commercial office building” before the two-year, $200 million project was complete. The valuation the city placed “on the shell of a non-operational building undergoing a massive conversion to a hotel” resulted in “an assessment of possessory interest taxes that is neither equitable nor reasonable,” court filings said.
Trump’s lease with the federal government to operate the hotel has been the center of controversy, because the lease agreement bars participation by an elected official, according to two George Washington University procurement experts who published their findings Nov. 28 in “Government Executive,” a trade publication.
However, the U.S. General Services Administration, the agency that oversees the federal agreement to lease the old post office, determined in March that Trump Old Post Office and the Trump Organization were in compliance with the lease.
In a March 23 letter, the GSA said Trump’s company met the terms of the lease because Trump resigned from the company, and the organization had restructured an internal operating agreement so that Trump receives no direct benefit from the hotel while in office.
The Trump International Hotel is involved in a number of pending lawsuits in D.C. and federal court, including a suit brought by Democratic senators and House members ( Blumenthal v. Trump , Dist. Ct. D.C., No. 1:17-cv-01154, amended complaint 8/15/17 ). The lawmakers allege that Trump has violated the Foreign Emoluments Clause of the U.S. Constitution by accepting payments and other benefits from foreign countries, including diplomats staying at the old post office building site.
In their amended complaint filed Aug. 15, congressional members said Trump’s hotel has been “actively courting” foreign diplomats, including hiring a “director of diplomatic sales” and hosting an event soon after the presidential election in which about “100 foreign diplomats, from Brazil to Turkey” attended.
To contact the reporter on this story: Che Odom in Washington at COdom@bna.com
To contact the editor responsible for this story: Jennifer McLoughlin at firstname.lastname@example.org
Text of the scheduling order is at http://src.bna.com/rVw.
Copyright © 2017 Tax Management Inc. All Rights Reserved.
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