A-Rod, Once Scorned by Trump, In Group Buying His D.C. Hotel
Word of Rodriguez's involvement in the Trump hotel deal brings together two infamously polarizing figures and has cast a renewed spotlight on their often-tempestuous relationship.
February 15, 2022 at 11:23 AM
6 minute read
Former New York Yankees slugger Alex Rodriguez, once vilified by Donald Trump as a "druggie" and "joke" unworthy of wearing the pinstripes, is now a key part of an investment group seeking to buy the rights to the ex-president's marquee Washington, D.C., hotel, people familiar with the deal told The Associated Press.
A-Rod's involvement in the $375 million deal, which could close within weeks, would make the athlete-turned-entrepreneur an unlikely financial savior for Trump, allowing him to recoup millions he invested and perhaps even emerge with a profit from his money-losing hotel.
"This is just more proof that the only thing that matters to Trump is money," said Trump biographer Michael D'Antonio. "If A-Rod can bail out Trump and get him out of a sticky situation and help him turn a profit, he's going to take that deal. He'd take it from Hillary Clinton."
While published reports late last year identified the buyer as Miami-based CGI Merchant Group, the rights to lease the 263-room property near the White House are actually being purchased by a fund led by CGI that includes Rodriguez as a general partner, two people familiar with the deal told the AP. The sources, who spoke on condition of anonymity because they were not authorized to discuss the deal, declined to detail Rodriguez's stake other than to say he is a key investor.
One of the sources identified the fund as the $650 million Hospitality Opportunity Fund that CGI, Rodriguez and New York real estate financier Adi Chugh set up in late 2020 to buy hotels with plunging valuations due to coronavirus shutdowns and rebrand them as a collection of "socially conscious" and "eco-friendly" properties.
But the Trump International Hotel in Washington may not be such a bargain. If the deal is finalized at the currently offered price of $375 million, much higher than experts expected, it could allow Trump to emerge with a profit after losing tens of millions of dollars on the hotel even as it became a magnet for lobbyists, diplomats and GOP supporters.
Taking in $375 million would more than make up for the $200 million Trump's company put into renovating the historic, federally-owned Old Post Office building into a luxury hotel after signing a lease with the General Services Administration in 2012, as well as the $70 million that a congressional oversight committee says the hotel lost during Trump's four years in office.
Real estate experts say a more realistic price in the current Washington market would be $1 million per room, or about $260 million. But hotel brokers, consultants and other experts AP contacted say determining a fair value for this particular property is exceedingly difficult, in part because it's a lease being sold. Also, the only name over the door since it opened more than five years ago has been Trump's and there is no telling how many guests might come in once those divisive five letters are removed.
Rodriguez, reached through his spokesman Monday, did not immediately respond to a request for comment, nor did the Trump Organization. CGI and Surya Capital, the hospitality fund's third partner run by Indian-born investor Chugh, declined to comment. The GSA, which must approve any transfer of the lease, also did not respond to a request for comment.
Word of Rodriguez's involvement in the Trump hotel deal brings together two infamously polarizing figures and has cast a renewed spotlight on their often-tempestuous relationship.
Trump, a longtime Yankees fan, said in a 2012 radio interview that he was never a fan of Rodriguez's — either as a player or person — citing an unspecified "bad experience" he had with A-Rod when he lived in Trump's Park Avenue building.
Trump has also tweeted about A-Rod dozens of times, mostly in a span from 2011 to 2013 prior to Major League Baseball suspending Rodriguez for the entire 2014 season for use and possession of prohibited performance-enhancing substances, including testosterone and human growth hormone, and attempting to obstruct MLB's investigation.
"The @Yankees should immediately stop paying A-Rod — he signed his contract without telling them he was a druggie," @realDonaldTrump said on Opening Day 2013.
"Druggie A-Rod has disgraced the blessed @Yankees organization, lied to the fans & embarrassed NYC. He does not deserve to wear the pinstripes," Trump said in another tweet.
But in recent years, there seemed to be a cooling off. Trump praised A-Rod when the two appeared together at a charity reception at his Bronx golf course in 2015. And Trump reportedly called the 14-time All-Star in the early days of the pandemic in 2020 for advice on how to handle the coronavirus.
That didn't stop Rodriguez and his then-fiancee Jennifer Lopez from appearing in an online campaign ad for Joe Biden just weeks before the 2020 presidential election, urging Hispanic voters to turn out for the Democrat.
A-Rod's prior political activity included donations to Democrat Hillary Clinton in 2016 and Republican Mitt Romney in 2012, a gift Trump felt compelled to tweet about at the time: "I started to get very worried about Mitt's chances when I heard that A-Rod donated to his campaign. Everything A-Rod touches turns bad."
Since the 46-year-old Rodriguez's playing days ended in 2016, he has focused heavily on investing, including being part of a $1.5 billion deal last year to buy the NBA's Minnesota Timberwolves. Rodriguez also owns numerous office, retail and residential properties, and stakes in dozens of businesses, including online groceries, private plane sharing, a beer brand, and gym and yoga chains.
Rodriguez was an enthusiastic supporter of the $650 million Hospitality Opportunity Fund when it launched in December 2020 with plans to buy more than 20 hotels, praising lead investor CGI for its socially conscious approach to investing that focuses on helping "communities it calls home."
CGI's chief executive, Jamaican-born Raoul Thomas, has donated heavily to Democratic politicians and is turning to an increasingly popular marketing strategy that promises to combat social injustices and a warming planet. The website for CGI, owner of mostly office and retail buildings in the Miami area, trumpets what it calls "conscious certified" properties that help local groups working on social, health and environmental issues and are committed to cutting their carbon footprint.
So far, the fund has purchased and renovated two hotels under the Gabriel name in the Miami area and a third on the campus of Morris Brown College in Atlanta, a deal that included $30 million from CGI for the historically Black school to develop a hotel and hospitality training program.
If the Trump hotel purchase follows that pattern, a property that once was packed with GOP politicians rallying behind a president who ridiculed "woke" liberal culture and once called global warming a "Chinese hoax" would find itself pledging 1% of room revenue to local charities, buying from local businesses and using eco-friendly products.
Said Trump biographer D'Antonio: "The idea of someone taking over this citadel to right-wing heedless excess and turning it into a haven for the socially and environmentally conscious is delicious."
___
Condon reported from New York. News researcher Rhonda Shafner contributed to this report.
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