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Trump Hotels plans to open one of its lower-priced Scion properties in a $50 million downtown Dallas project that’s being funded by individual investors in countries including the U.S., Turkey, Qatar and Kazakhstan.
The 220-room hotel is set to open in the first quarter of 2019, according to Mike Sarimsakci, founder of Alterra International, the local developer leading the project. He said he has been working with the Trump Organization on the development for about 18 months. The company will license the brand and manage the hotel, and won’t invest any equity, he said. “We have signed a letter of intent,” Sarimsakci said in a phone interview.
Sarimsakci, a Turkish native who said he has a master’s degree in construction engineering and management from Stanford University, said the individuals who are putting in money are relatives and members of his social network. No institutions are making an equity investment, he said. Equity investments will be 20 percent to 30 percent of the total cost.
Trump Hotels declined to comment on the project. “We don’t have any signed deals to discuss at this time,” the company said in a statement. Bobby Burchfield, the Republican attorney named to help oversee ethics compliance by the Trump Organization, said there is no certainty the project will go forward.
“My understanding is there were some negotiations about that some months ago, but there is no deal yet and it’s not clear that there will ever be a deal, so it’s not yet right for any sort of ethics review,” Burchfield said in a voicemail.
Scion, Trump’s chain aimed at millennials, was introduced last year, part of a raft of so-called lifestyle hotels that seek to attract guests with modern designs and lower prices than the luxury tier that Trump’s namesake brand occupies. The plans for the new hotel were reported Wednesday by the Dallas Business Journal.
Alterra is under contract to buy two parcels totaling almost an acre (0.4 hectare) at the corner of St. Paul and Young streets, said Ashley Farha, a vice president at Hamilton Properties Corp., which is selling the land. The new Scion hotel will be most of the development, aside from 20,000 square feet of retail, Sarimsakci said.
The hotel would be built on what’s now a parking lot that sits across the street from another Alterra redevelopment project that includes a Marriott hotel.
“We see Scion as a continuation of that,” Sarimsakci said. “It’ll be great for an up-and-coming area in downtown Dallas.” He said Alterra specializes in fixing blighted areas through redevelopment.
Detroit, St. Louis
The developer said he and Trump Hotels are discussing possible Scion hotels in Detroit and St. Louis.
Lawyers for President Donald Trump have said his organization won’t make new international deals while in office, without clarifying. They left the door open to new domestic agreements. It isn’t immediately clear how a U.S. licensing deal with foreign backers fits into that framework.
Trump is unique among modern presidents in that he hasn’t divested from any of his businesses, raising the prospect of conflicts of interest. His company last week tapped Burchfield and George Sorial, a longtime employee of the Trump Organization, to oversee the company’s ethics compliance.
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©2017 Bloomberg L.P. This article was written by Hui-yong Yu and Caleb Melby from Bloomberg and was legally licensed through the NewsCred publisher network.