Home » NEWS » Economic Development » No Trump brand, but prime Cleveland hotel will open in fall
The Lyric Hotel in west Cleveland is expected to open in the fall.

No Trump brand, but prime Cleveland hotel will open in fall

SURESH CHAWLA

By JACK WEATHERLY

In case you missed it, Trump Hotels announced last Thursday that it was parting ways with a Mississippi hotel chain with which it had planned to open a prime lodging complex in Cleveland.

Chawla Hotels Inc., headed by brothers Suresh and Dinesh Chawla, were working toward adding what they were calling the Lyric to their chain of 18  hotels in the Delta.

Enter the Trump organization after a chance encounter 30 years ago and the Trumps and Chawlas were heading toward launching two hotel chains, the Scion and American Idea.

Then the bump in the road.

The Trump Organization announced Thursday that it was “suspending its expansion plans for the Scion and American Idea hotel brands in Mississippi.”

But this is not the end of the $20 million multi-faceted complex, which the Chawla brothers say will be four-star quality  with upscale lodging, dining and entertainment venues.

Dinesh Chawla cleared the air with a Facebook posting in which he said “we’re fine financially” and “we’re on schedule to open [the Scion] this fall.”

The Chawlas were the investors in the now-former Scion hotel, so there is no loss for the Trump group, which was to manage and handle the branding of lodging, Suresh said.

The Trumps “have been a godsend to us in terms of ideas, whether it be marketing or anything to help us improve our operations and design,” he said in the teleconference. We’ve never built a four-star hotel before.”

Three existing hotels in the Chawla chain were to be the first of the American Idea lodgings, revamped from two Rodeway Inns.  The hotels were shut down and undergoing a remodeling  that was already needed, so there is no loss there, Suresh Chawla said. They will be rebranded.

The third, a Comfort Inn in Cleveland will stay as it is, he said.

The Trumps were handling branding and management of  the Scion, whereas the Chawlas invested the capital and qualified for a $6 million state tax rebate upon completion and approval of the project.

» READ MORE: another  luxury hotel coming to Cleveland

The Trump Organization has been quoted as saying that there were a number of hotels across the country to be forthcoming from the  two new chains to go with its worldwide array of elite hotels, golf courses and resorts.

DONALD J. TRUMP

President Donald Trump and his administration have been the subject of an intense investigation under Special Counsel Robert Mueller for two years over possible Russian government interference in the 2016 presidential election.

The New York Times quoted Trump son Eric as saying in a prepared statement: 

“We live in a climate where everything will be used against us, whether by the fake news or by Democrats who are only interested in presidential harassment and wasting everyone’s time, barraging us with nonsense letters. We already have the greatest properties in the world and if we have to slow down our growth for the time being, we are happy to do it.”

The company said in March 2017 that nearly two dozen developers had already signed letters of intent to open Scion hotels, and was enthusiastic about the future prospects, according to the Associated Press.

But the deals never materialized, as was the case for its budget-priced American Idea.

The only developer that struck a deal was Chawla Hotels.

The Trump Organization said in a release that “we have enjoyed our time working together and know that when complete, under the leadership of Dinesh and Suresh, their hotel in Cleveland will be an absolutely spectacular project.”

“We have great respect and admiration for the Chawla Family and their father, the late Dr. V.K. Chawla. They are truly exceptional developers with an amazing vision.”

Things were moving toward a completion in late 2017, when the Chawla brothers signed a deal with the Trump Organization in June 2017, and an extensive revision of the Scion plan was undertaken.

The Chawla brothers in the release remarked, “Don, Eric and the entire Trump Hotels Team are fantastic people, and their family helped launch our path to the American Dream 30 years ago. Our product is far superior today to when we started and that is because of the time and expertise that Trump Hotels dedicated to us. We understand their position completely and are grateful for their professionalism. We hope that when the time is right, we can work with Trump Hotels again.” 

Chawla Hotels CEO Dinesh Chawla speaks, June 5, 2017, during an event announcing the expansion of Trump Hotels in Mississippi. (AP Photo/Kathy Willens)

The release from the Trump Organization alluded to an incident in 1988 when the brothers’ father, V.K. Chawla, reached out to Donald Trump’s real estate empire and said he wanted to build a hotel in Greenwood.

To Chawla’s surprise, he got a return phone call one day from Trump himself.

Trump told the elder Chawla that he should apply for a Small Business Administration minority loan. He got the loan and built the first of what is now a chain of 18 hotels in the Delta, run by his sons since his death in May 2015.

Fast forward to December 2016 and the sons announced plans for a full-service hotel in Cleveland costing $8 million. Suresh Chawla said that will be 19 hotels come June with the opening of a Tru by Hilton in Greenville.

The collaboration between the two families came as happenstance, or fate perhaps.

An article in the Mississippi Business Journal in 2016 about a chance connection between Donald Trump Sr. and Dr. V.K. Chawla in 1988 caught the eye of the Trump family, and Gov. Phil Bryant.

Trump was planning a 2016 campaign stop in Jackson, and Bryant, an ardent Trump supporter, urged Suresh to be there.

The governor introduced Suresh to Trump, who listened to the Chawlas’ story from 1988 and their latest project and encouraged him to to “think grand.”

The Chawlas nearly doubled the scope of the plan to $15 million, though they said they had been already considering an expansion.

Donald Trump Jr. made the announcement in June 2017 in the Trump Tower in Manhattan of the project and the Trumps’ American Idea chain.

The Thursday release quoted the Chawlas as saying that “Don, Eric and the entire Trump Hotels Team are fantastic people, and their family helped launch our path to the American Dream 30 years ago.” 

Donald Jr. said in the teleconference that “this is not a slight on Mississippi, but there is a bigger picture that we have to be cognizant of.”

Chawla said that the input from the Trumps enabled them to “design a far superior product,” even with an extended delay in completion.

Trump said there will come a time “when we’d certainly love to get back in that market, and certainly with  the [Chawla] brothers. . . . That time will come.”

Suresh said that the bottom line of the experience is that it will be for “the betterment” of the Delta, through jobs creation and building up the tourism industry.

 



BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Jack Weatherly

Leave a Reply