Source: Altera International

Trump Company Says Developer ‘Noise’ Halted Dallas Hotel Project

Updated on
  • Company says it asked to cancel project after media attention
  • The Trump name is a ‘bad brand’ for city, councilman says

A developer has dropped plans to use the Trump Organization’s new Scion brand for a proposed $50 million hotel in downtown Dallas after the project drew national attention, scuttling the potential partnership.

Dallas Councilman Philip Kingston said he was informed by Mike Sarimsakci, founder of Alterra International, on Tuesday that he plans to team with a different hotel operator for the project. Kingston said he met with Sarimsakci and others at Dallas City Hall at Sarimsakci’s request after Kingston and another council member criticized the developer’s plans to go into business with President Donald Trump’s company. The Trump Organization said it asked Sarimsakci to halt the plan after he called attention to it by talking to local and national media.

“The current situation is the result of a phone call this developer made to our company asking whether he should pursue the project with the city council. We told him that he should not,” Trump Hotels said Thursday in an emailed statement. “This developer made quite a bit of noise about a potential deal and now there is more noise about the possible dissolving of this deal.”

Sarimsakci didn’t respond to calls and emails seeking comment. The news about the project being halted was reported Wednesday by the Dallas Morning News.

Sarimsakci said in February that the Scion project would be funded by individual investors in countries including the U.S., Turkey, Qatar and Kazakhstan. The 220-room hotel was set to open in the first quarter of 2019. Trump’s family company, now run by his two oldest sons, would have licensed the Scion brand and managed the hotel, and didn’t plan to invest any equity capital, Sarimsakci said at the time. He said he had signed a letter of intent with the Trump Organization.

Trump No More

“Mike is trying to proceed with the project, but the Trump Organization is no longer the operator he is seeking to do a deal with,” Kingston said in an interview Wednesday.

Hotel-development projects often don’t come to fruition, Trump Hotels said in its statement.

Trump Hotels Chief Executive Officer Eric Danziger outlined plans for a national expansion at an industry conference in January, five days after the president took the oath of office amid calls by ethics experts to divest himself of his business holdings.

Trump Hotels’ business model with Scion is to find partners to put up the equity capital while the company licenses its brand and manages the properties, a typical arrangement in the lodging industry. The company’s Scion line is intended to attract travelers seeking less expensive accommodations and a more modern design than Trump Hotels’ namesake luxury properties offer.

Read More: Trump’s D.C. Hotel Seen Facing New Legal Challenges

Trump Hotels had previously declined to comment on the Dallas project, citing company policy not to speak about deals that aren’t signed. A letter of intent is merely an informal agreement to explore a deal.  

“We do not announce deals that are not signed for a variety of reasons. We also take our relationships with partners and potential partners very seriously and we keep the specifics of our business dealings private,” Trump Hotels said in its statement Thursday. “Having said that, we wouldn’t want for this situation to be misconstrued or misrepresented.”

The new hotel Sarimsakci plans to develop is “still likely to have foreign money backing it,” Kingston said, citing his conversation with the developer.

Kingston said he is a Democrat who voted for Hillary Clinton in the November election. He said Trump’s anti-Mexican and anti-Muslim campaign rhetoric, along with his actions and conflicts of interest as president, caused him to object to the Scion project.

‘Bad Brand’

“The president is a bad brand and we have to protect the Dallas brand,” Kingston said. “We’re trying to sell ourselves internationally as a city that’s welcome and open for business travelers, new residents, innovators, young professionals, and the president is an extremely bad brand. He’s a hateful and ignorant man who says things that are hurtful to the people I care about.”

The Trump administration imposed a travel ban on seven Muslim-majority countries in January, sparking chaos at airports, lawsuits and criticism from technology and travel industry executives. Judges blocked the executive order, and a federal judge ruled last month that a revised travel ban was just a cleaned-up version of the original.  
Kingston, a practicing lawyer, said Trump’s “disregard for the rule of law -- and for the decisions of the judiciary -- is specifically hurtful to me and my profession.”