Trump’s DC Hotel Tagged With $5 Million in Unpaid Worker Liens

Donald Trump’s new Washington hotel, located just blocks from the White House, owes electricians, wood workers and a plumbing and heating business more than $5 million for unpaid labor, according to liens filed against the property with the District of Columbia.

The 263-room hotel, located on the historic site of the city’s former main post office, opened in October following a $212 million renovation of the 1899 structure. The liens were filed in November and December, according to public records.

Trump has acknowledged not always paying all his bills, saying it’s often a negotiating tactic when work is subpar. His companies have been sued numerous times over unpaid work. Among them were landscapers at Riverside South Park in Manhattan, who sued in 2001 seeking $111,000. Contractors at Trump Park Avenue sued in 2003 seeking $206,000. And in 2010 a painter in Chicago sued a Trump entity developing a high-rise claiming to be owed more than $4 million.

Since his Nov. 8 election, the Trump International Hotel has become a focus of scrutiny as a potential source of conflicts of interest. The site is leased from the federal government, which Trump will lead as of Jan. 20. Democrats in the U.S. House of Representatives have called upon the president-elect to divest his stake, citing lease terms prohibiting elected officials from being a party to a deal or receiving benefits from it.
Those claiming they’re owed money by Trump Old Post Office LLC include the Washington plumbing and heating firm, Joseph J. Magnolia Inc., which says it’s due $2.98 million. A Maryland company, AES Electrical Inc., claims it’s owed $2.075 million and A&D Construction of Virginia LLC, says the hotel hasn’t paid $79,700 for trim work including crown and base moldings.

Rebecca Woods, an attorney representing the president-elect in other hotel-related litigation, didn’t immediately respond to a phone message seeking comment on the liens. Trump’s communications office didn’t immediately reply to an e-mailed request for comment.

Trump International Hotel Washington D.C. Photographer: Drew Angerer/Bloomberg

Contractors File Liens Against Trump D.C. Hotel, Claiming They Were Stiffed Out Of $5M

Three contractors have filed liens against President-elect Donald Trump’s showcase Washington, D.C., hotel, claiming they are owed $5 million in labor costs, according to records.

The so-called mechanic’s liens were filed against the 263-room, five-star Trump International Hotel in November and December with the District of Columbia, according to records obtained by Bloomberg and The Washington Post. Trump has boasted that he completed the $212 million renovation ahead of time and under budget.

A statement from the Trump Organization to the Post did not specifically address the merits of the filings, only that “nominal liens at the conclusion of construction is not uncommon as part of the close out process.”

Trump, who campaigned as a champion of the American worker, was criticized during his presidential race for his long history of refusing to pay or only partially paying blue-collar workers and small-business contractors. He claimed that he was justified because some of the work was subpar — though he occasionally rehired the same contractors for later projects. He also told The Wall Street Journal that even if work was “OK, sometimes I cut them.” Trump companies also dodged payments to hundreds of workers and vendors by filing for bankruptcy protection six times since 1991.

Some of his contractors have said they were forced out of business because of unpaid Trump bills.

In the Trump International Hotel liens, Washington plumbing and heating firm Joseph J. Magnolia Inc. says it’s owed $2.98 million, and Maryland company AES Electrical Inc. has filed a $2.075 million lien. A&D Construction of Virginia says Trump International has failed to pay $79,700 for installing base and crown moldings, according to records.

Magnolia worked on the Trump hotel for more than two years and “completed all plumbing, mechanical, HVAC [heating and air conditioning] along with site sewer, water, storm and water services” on the project, according to its filing with the D.C. government, The Washington Post reported.

Company owner John Magnolia told the newspaper in an interview that he voted for Trump, but he’s worried the final payment might not be made if the hotel changes hands before the inauguration to resolve ethics concerns.

“We’re kind of working through that right now,” Magnolia told the Post, referring to the millions still owed. “Unfortunately, Mr. Trump and Ivanka and so forth, they are, I guess, preoccupied by other matters now. They are trying to go run the country. So we’ll just see what happens.”

An attorney for the Hispanic-owned A&D Construction said the company is a small operation that needs the money it’s owed, but it has not heard back on its requests for payments even after filing the lien.

“I have not heard from anyone. My client is a small-time operator, so he does not have deep pockets,” attorney Richard Sissman told the Post.

If the liens aren’t resolved, lawsuits can be filed 180 days after the liens.

The hotel, on the site of the city’s former historic post office, is leased from the federal government. Ethics watchdogs and Democrats have called on the president-elect to give up his financial stake in the building, citing lease terms prohibiting elected officials from receiving benefits from it. In addition, the emoluments clause in the U.S. Constitution prohibits elected officials from accepting benefits from foreign powers. Trump has pointedly encouraged visiting dignitaries to book rooms in his hotel.


Two contractors allege getting stiffed for work on Trump’s D.C. hotel

Their employees installed plumbing, air conditioning, baseboards and crown molding in Donald Trump’s $212 million luxury D.C. hotel.

Afterward, they say, they were stiffed.

Two Washington-area small businesses have filed liens on the Trump International Hotel, saying they have not been compensated for their work completing the 263-room project the president-elect routinely heralds as having finished under budget and ahead of schedule.

One firm, Joseph J. Magnolia Inc., is a private, family-owned plumbing firm with offices in Northeast D.C. and suburban Maryland that claims it is out $2.98 million. According to a mechanic’s lien the company filed four days before Christmas, Magnolia worked on the Trump hotel for more than two years, from September of 2014 to December of 2016.

Magnolia “completed all plumbing, mechanical and HVAC work, along with site sewer, water, storm and water services” on the project, according to its filing with the D.C. government. The company said it provided labor and materials for the work and named Trump’s D.C. hotel company, Trump Old Post Office LLC, and construction manager Lendlease US among the responsible parties.

John D. Magnolia, the company’s president, said in an interview that the Trump family had paid for most of his work on the project and that he voted for Trump in November. But when the final money did not arrive and criticism grew over the president-elect’s continued ownership of the project as he prepares to enter office, Magnolia said he worried ownership would change before the Trumps paid fully.

“They have been decent people and so forth but the issues that are going on now, with all the talk about removing him from the lease we are concerned about what is going to happen there. So it’s basically a business decision that we had to make,” he said.

Magnolia said he had not been in touch with Trump or his daughter Ivanka, who spearheaded the project, but was still hopeful his company would be paid before too long despite Trump’s election.

“We’re kind of working through that right now. Unfortunately Mr. Trump and Ivanka and so forth, they are I guess preoccupied by other matters now. They are trying to go run the country. So we’ll just see what happens,” he said.

Another smaller firm, A&D Construction of Sterling, Va., said in a lien it filed Nov. 9 that it was owed $79,700 for wall base and crown molding work performed between June 24 and Oct. 5, 2016, three weeks before the day Trump held a grand opening celebration.

An attorney for A&D Construction, Richard M. Sissman, said the firm was a Hispanic-owned construction company that had no contract or relationship with the Trump Organization directly but rather with another contractor on the project. “We did not contract directly with Trump,” Sissman said.

However, Sissman said A&D, owned by Osvaldo Tellez, was a small operation that needed the money it was owed and had not heard back on its requests even after filing the lien. A&D describes itself online as available for work ranging “from a small bathroom remodel at your home to a complete renovation of apartments to an overhaul of your commercial office space.”

“I have not heard from anyone. My client is a small-time operator so he does not have deep pockets,” Sissman said.

A representative for Lendlease referred comment to the Trump Organization. In a emailed statement, the Trump Organization did not address the specifics of the legal action.

“In developments of this scale and complexity the filing of nominal liens at the conclusion of construction is not uncommon as part of the close out process,” a spokesperson for the company wrote. “In the case of Trump International Hotel, Washington D.C., the Trump Organization has invested over $200 million dollars into the redevelopment of the historic Old Post Office and is incredibly proud of what is now considered to be one the most iconic hotels anywhere in the country.”

Trump has a long record of not paying or only partially paying some of the contractors and partners on his projects. Hundreds of small business owners and blue collar workers including painters, dishwashers, waiters, bathroom installers, chandelier sellers, curtain makers and lawyers have in the past accused Trump’s businesses of leaving them with unpaid bills at times.

A retired New Jersey businessman once alleged Trump never paid him for $100,000 worth of pianos he provided for one of Trump’s Atlantic City casinos.

Many of the aggrieved are the sort of firms and entrepreneurs Trump championed as a candidate. In the past Trump, who signs his company’s checks personally, has sometimes denied not paying bills and other times said he withholds payment as a negotiating tactic.

“I love to hold back and negotiate when people don’t do good work,” Trump told the Wall Street Journal in May.

Under D.C. law, building contractors and subcontractors may file mechanic’s liens to protest unpaid work on real estate projects. Because the liens are a claim on the property’s title, they can make it difficult for the project’s owner to receive or renegotiate bank loans and payments. Under the law, contractors can file suit 180 days after filing a lien if the dispute has not been resolved.

In Trump’s case, the liens could also affect his hotel’s deal with the federal government. Trump leases the building where the hotel is located, the Old Post Office Pavilion, from the General Services Administration.

A clause in the lease requires that Trump Old Post Office LLC notify the GSA in writing within 10 days of any mechanic’s lien being filed. Within 30 days of the filing, Trump’s firm is required to have any liens “discharged” unless it contests the claims being made. Spokespersons for the GSA did not immediately respond to requests for comment.

Magnolia chalked Trump’s missed payments up to the president-elect being focused on the country.

“I voted for the man and he seems to be surrounding himself as he has in the past with some pretty smart people and I wish him the best,” he said. “But we’ve got to take care of this, that’s all.”


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