x Abu Dhabi, UAEMonday 24 July 2017

Dubai company linked to sale of 'infamous' Watergate hotel

The Watergate Hotel whose name became shorthand for the biggest political scandal in United States history goes under the auction hammer today.

WASHINGTON // The Watergate Hotel whose name became shorthand for the biggest political scandal in United States history goes under the auction hammer today, with several developers, including the Dubai-based Jumeirah Group hotel company, reportedly interested in owning the landmark building. The once luxurious hotel has fallen on hard times after Monument Realty, which bought it in 2004, failed to win approval for its conversion into apartments and defaulted on a US$40 million (Dh146.9m) bank loan.

In 1972, five burglars slept at the hotel the night before breaking into the Democratic National Committee's headquarters in the nearby building of the same name, part of a dirty tricks campaign that brought down Richard Nixon, the only sitting US president forced to resign mid-term.Jumeirah Group did not want to buy the property at auction but would consider purchasing it from PB Capital, the bank lender that holds the outstanding $40 million debt and that might buy the hotel, according to the Washington Post newspaper.

Paul Cooper, who will conduct the sale for Alex Cooper Auctioneers, said there had been an explosion of interest from people around the world but he did not know whom they represented. Potential buyers had to provide a $1 million cheque deposit to participate in the auction, which would be held in Washington, he said. He did not yet know what minimum price would be sought by the owner bank. "I've had at least a dozen calls and I've got messages from at least another dozen people," he said. "The bank will set the minimum price but they haven't instructed me on that yet."

Robert Holland, a property developer whose projects include the Georgetown waterfront area, told The Post that Jumeirah executives had told him they were interested in a private purchase, as was he, if PB Capital bought the hotel. "At the end of the day, I believe this will be the premiere hotel in Washington," Mr Holland said. "Eighty per cent of the rooms have water views and they're not great - they're spectacular."

A spokesman for Jumeirah, which owns the five-star Jumeirah Essex House hotel overlooking New York's Central Park, could not be reached for comment. The 12-storey, 251-room hotel overlooks the Potomac River in the Foggy Bottom area of north-west Washington. At least $100m will be needed to renovate the building while Monument Realty has not paid property taxes since last year, meaning the city would collect at least $250,000 at a sale. Lehman Brothers was Monument's financing partner before the investment bank crashed last September, triggering global financial chaos.

The dilapidated hotel has been closed since 2007. Electricity, security and insurance for the empty building costs up to $150,000 a month. But the new owners would get a historic building with established name-recognition. "I'm honoured to participate in this sale," Mr Cooper said. sdevi@thenational.ae