TO CHAMPION WORKERS,
NOT WEALTHY REAL ESTATE
INVESTORS AND TRUMP'S
BUDDIES LIKE TOM BARRACK!
Denny Heck is running for Washington State Lt. Governor. He recently announced his retirement from Congress and said his priority as Lt. Governor would be “rebuilding our economy in a fairer way so that prosperity as it returns is more broadly shared.”
So why is one of his last acts before leaving Congress helping some of the wealthiest real estate investors in the country score massive taxpayer-funded bailouts while workers in his district are left behind?
GET THE FACTS
What the Hotel Industry is Asking For: US Congressman Van Taylor (R-TX) is circulating a draft bill called the HOPE Act to create a federal program to fund commercial real estate (CMBS) loans, according to public reports. Reports suggest the draft, which looks similar to a plan outlined by the American Hotel and Lodging Association in May, would create a Preferred Equity Facility managed by the Federal Reserve to provide borrowers funding up to 10% of outstanding CMBS debt in exchange for preferred equity interests. Real estate owners would pay a 2.5% interest rate and the equity interest would be unsecured with no right of foreclosure. Payments of principle would amortize over 7 years, in some cases longer than the maturity dates of existing CMBS debt. The full text of the bill can be found here. On June 26, Congressman Heck, and Texas Republican Van Taylor circulated a letter among their House colleagues asking that “the Department of the Treasury and the Federal Reserve urgently consider targeted economic support to bridge the temporary liquidity deficiencies facing commercial real estate borrowers."
Who Would Benefit Most from a hotel CMBS Bailout? A union analysis of hotel loan data provided by data service Trepp shows that more than 20% of hotel CMBS debt in special servicing is owed by just two large real estate players with ties to President Trump.
• Monty Bennett’s Ashford companies owe $2.3 billion in specially serviced loans on dozens of hotels. According to the Federal Election Commission, Bennett has donated more than $350,000 to Trump’s candidacy and committees, and a similar amount to Republican candidates and committees. Ashford drew scrutiny as the largest recipient of PPP before returning the money.
• Tom Barrack’s Colony Capital, a $50 billion private equity firm which had $2 billion worth of loans in special servicing. Barrack served as Chairman of the President’s 2017 Inaugural Committee.
Locally who would benefit? Locally, one of the largest hotel CMBS debtors was Provenance Hotels, owned by the former Trump Ambassador to the EU, Gordon Sondland. Seven Provenance Hotels, including Hotel Murano in Tacoma, are delinquent on their loan payments, with a combined outstanding indebtedness of $205 million.
Hotel Murano Layoffs: Hotel Murano in Tacoma, Washington is owned by Mr. Sondland’s Provenance Hotels. The hotel laid off all 135 workers represented by UNITE HERE Local 8, refused to extend their health insurance in the midst of a pandemic, and claims it will remain closed until after recall rights expire under the union collective bargaining agreement.