Trump’s sons leverage ties established in campaign
new york — Donald Trump’s adult sons, who are overseeing a nationwide expansion of the family business during their father’s presidency, are envisioning ways that their experiences from the campaign trail can help them establish a footing in dozens of new markets.
The idea is to move beyond a focus on luxury hotels in big metropolises and build boutique properties in a broader mix of cities, including some the Trump brothers came to know well during more than a year of intensive travel, fundraising and grassroots networking on the road to the White House.
“I got to see a lot of those markets on the campaign,” Donald Trump Jr., the president’s
eldest son, told The Washington Post in a recent interview from his office on the 25th floor of Trump Tower. “I think I’ve probably been in all of them over the last 18 months.”
The initial plan is tied to the Trumps’ previously announced new chain, Scion, which is being designed as a less-corporate feeling brand of high-end hotels with a more affordable per-room price point than the Trumps’ five-star properties.
As with many existing Trump-branded property deals, the developers would own the hotels while the Trumps would be paid licensing and management fees.
The company says it has signed at least 17 letters of intent with potential developers. It is targeting an array of cities such as Austin, Dallas, St. Louis, Nashville and Seattle — and Trump Jr. said the campaign proved useful in forging relationships with potential new connections.
“I met people along the way that would be awesome partners,” he said.
The expansion plan illustrates how President Trump’s political rise has the potential to affect his business even as he and his sons promise to adhere to a strict ethical boundary between the company’s moves and the Trump administration. And it shows the inherent challenge in separating the family’s political work from its corporate interests, with upsides and potential problems.
Extending the Trump business into a greater cluster of American cities could bring political benefits for a president who has vowed to bring jobs and economic prosperity to struggling communities. But it also comes as Trump has faced criticism from Democrats and ethics officials for his decision to retain his ownership stake in the company, a decision that means he stands to personally benefit from its growth.
Building new hotels, for example, could create issues — tax disputes, allegations of labor violations or environmental violations — that require federal departments to consider cases that could directly affect the president’s finances. And while the Trumps have vowed to sign no new foreign deals, pursuing a raft of new domestic contracts from coast to coast means the Trumps are likely to engage in negotiations with private developers, banks and investors who see additional benefits in doing business with the president’s company.
“It’s just going to add fuel to the fire that is already burning . . . with him having still a foot in both the boardroom and one in the Oval Office,” said Scott Amey, the general counsel of the nonpartisan watchdog group Project on Government Oversight.
The White House did not re- spond to a request for comment. The president in January added a team of ethics lawyers to the White House Counsel’s Office, while the company hired a longtime Republican attorney tasked with ensuring the Trump Organization minimizes conflicts of interest.
In interviews, Trump’s adult sons waved off the idea that their plans created any potential ethical problems.
“There are lines that we would never cross, and that’s mixing business with anything government,” Eric Trump said.
Donald Trump Jr. said that since the inauguration, he has spoken with his father twice on the phone and once in person — when he and his brother attended the announcement of their father’s Supreme Court nominee, Neil Gorsuch. Eric Trump said he may ask his father how things are in the White House but would never discuss government or business affairs.
“Will we ever talk about tax policy? Will I ever ask for anything that could otherwise benefit the business? Absolutely, emphatically not,” Eric Trump said. “He has no need to know what we’re doing, and I certainly don’t need to know what they’re doing, and I don’t want to.”
The Trumps’ point man on the expansion is Eric Danziger, an experienced executive who was hired in 2015 after previously overseeing expansions at Carlson Hotels Worldwide, Starwood Hotels and the former Wyndham International.
One of the first Scion projects is slated to open in Dallas, where a Turkish-born developer aims to open a sleek glass six-story hotel as part of a $50 million mixeduse downtown development. The Austin, Cincinnati, Denver, Detroit, Nashville, Seattle and St. Louis areas are also possible targets, according to reports by Bloomberg News and business trade publications.
The Trumps declined to say what other cities they were exploring for projects but said they were actively seeking contracts in many places.
Danziger, speaking last month to Skift, an industry publication, called Scion a “four-star lifestyle brand” with wide geographic appeal.
“That kind of brand can be in every city — tertiary, secondary,” he said. “So, how many is that? The opportunity is for hundreds.”
Because of the prohibition on foreign deals, Danziger said the company is “going to have full focus — instead of some focus — on growth domestically of both Trump and Scion.”
The expansion will not be easy, according to analysts. The Trumps will be entering a crowded marketplace of new hotel lines from Marriott, Hilton and Hyatt designed to appeal to a broad cross-section of custom ers, said Michael J. Bellisario, a senior research analyst with the firm Robert W. Baird & Co.
“There are so many more competitors out there today,” Bellisario said.
For the Trumps to distinguish their projects from their competitors, they will need to be choosy about locations, Bellisario said. “You’ve got to be on the right street corner in the right market. You can’t open these hotels in Topeka, Kansas,” he said. “So when you think about that, how big can the new line get?”
The plan is a big test for the younger Trumps.
Just as Donald Trump stepped out from his father’s shadow in the 1970s to build the family real estate business into today’s worldwide collection of golf courses, hotels, condo towers, branded merchandise and other commercial holdings, now Donald Trump Jr., 39, and Eric Trump, 33, have a chance to make their mark.
Along with their sister, Ivanka, who departed the company when their father entered office, the brothers have long served as executive vice presidents.
Before their father ran for president, the three siblings helped expand the firm from focusing on New York to including the management of luxury hotels in top U.S. cities and seven countries, plus more than a dozen golf courses.
The fruits of that work are still coming, as last month the company opened a new golf club in Dubai and last week held a grand opening for a new hotel-condominium tower in Vancouver, B.C.
A major transition for the sons is taking over a company in which the force behind every Trump company offering — whether it was selling hotel rooms, office buildings, golf out ties or raw steaks — was Donald Trump himself.
In interviews, Trump Jr. and Eric Trump said they consider themselves protectors of the Trump brand, an effort they said is sometimes misunderstood. Critics viewed the announcement of Scion during the campaign as a move away from the Trump name. The family’s intent was the opposite; since they view the name Trump has a standard for luxury that ought to be insulated, they will use other brands for less pricey products.
“We would never want to dilute the real estate brand by going into tertiary markets that can’t sustain the [luxury] properties as we build them,” Eric Trump said. “A lot of hotel companies have gotten this wrong.”
Both sons worked for their father starting at young ages, doing landscaping and other labor on his projects.
A University of Pennsylvania graduate, Trump Jr.’s first assignment at the company was to work with executives at New York City real estate projects.
Eric Trump joined after graduating from Georgetown in 2006. He has overseen the Trump Winery near Charlottesville and worked on the Trump hotel in Las Vegas, where he developed a reputation as a hands-on executive.
“If there’s a property tax issue or any litigation, he flies into Las Vegas and takes care of it,” said Phil Ruffin, a casino mogul who is the Trumps’ partner in the Las Vegas project. “He hires the lawyer. If there are any capital improvements, he approves them. He is very energetic like his father — he will just work night and day.”
With their father in charge, there was an informal division of labor among his three eldest children, governing which projects each swooped in to help.
Ivanka Trump created her own brands of shoes, jewelry, handbags and coats. She took the lead on some of the Trump Organization’s most prominent recent projects, such as the $212 million D.C. hotel, which had its soft opening in September.
“I’m probably the most obviously like [Trump Sr.],” Ivanka Trump said in a 2011 company video titled “Trump: The Next Generation.”
“In certain ways,” she added, “Eric is very similar to him in terms of his love of construction and building. And Don has his sense of humor.”
The Trumps’ planned corporate expansion comes as the president has faced intense criticism from Democrats and ethics experts for his continued ownership interest.
A liberal watchdog organization, Citizens for Responsibility and Ethics in Washington (CREW), has sued Trump, arguing that his hotel operations violate a constitutional provision barring the president from accepting gifts or payments from a foreign government. Some Democrats have argued that Trump’s international trademarks, inings, cluding one long-sought registration granted in February by China, also violate the Constitution’s emoluments clause.
Trump has called the CREW lawsuit “totally without merit.”
Amey, of the Project on Government Oversight, said there were ways for the Trumps to avoid potential domestic conflicts related to the hotel expansion. He said they could put the hotel business under another corporate structure, which does not involve a trust directly owned by the president himself.
“There are solutions to solving this; there doesn’t seem to be a will and a desire to do that within the White House,” Amey said.
The adult Trump brothers say they are taking ethics concerns seriously and are doing everything necessary to avoid distracting from their father’s work as president.
“Have I used him as a sounding board in the past? One hundred percent,” Trump Jr. said. “Have I learned a lot from him? Couldn’t have had a better mentor. But he’s got real stuff he’s got to deal with. These are real people’s lives . . . . So this notion that he is still running the business from the White House is just insane.”
Trump Jr. scoffed at the idea that his father might have somehow viewed running for president — spending millions of dollars of his own money to run against more than a dozen Republican challengers and Democratic presidential nominee Hillary Clinton when few pundits gave him a chance to win — as a moneymaking endeavor.
“That’s not a get-rich-quick scheme,” he said. “That doesn’t make any sense whatsoever.”
“He has no need to know what we’re doing, and I certainly don’t need to know what they’re doing, and I don’t want to.” Eric Trump, asserting that he would never discuss government or business affairs with his father
Donald Trump, then a candidate for the Republican presidential nomination, is flanked by his sons Eric Trump, left, and Donald Trump Jr. during the Outdoor Sportsman Awards on Jan. 21, 2016, in Las Vegas. Trump’s sons are seeking to grow their new hotel chain called Scion.