June 6, 2017 10:11:43 AM
NEW YORK -- The sons of President Donald Trump said Monday their company is launching a new hotel chain inspired by their travels with their father's campaign.
The Trump Organization is calling the new mid-market chain "American Idea" and said it will start with three hotels in Mississippi.
At a party at Manhattan's Trump Tower, Donald Trump Jr. said he and his brother, Eric, got a "crash course in America" while traveling across the country with their father's presidential campaign.
"We saw so many places and towns and so many stories," he said.
The first of dozens of hotels in another new Trump chain called "Scion" is also under construction in Mississippi, the company said.
Scion is a four-star hotel chain meant to offer upscale service in U.S. cities that could not support a full-fledged Trump luxury property. Ethics experts have said the chain raises conflicts of interest issues for the White House.
The four Mississippi hotels for both chains will be owned by Chawla Hotels. The Trump Organization will get management and franchise fees for the new ventures. Chawla Hotels owns 17 hotels under various franchise names.
Chawla Hotels was founded by the late V.K. Chawla, who was described as a war refugee from India. His son, Dinesh Chawla, said his father came to the United States as a legal immigrant from Canada.
"I am an immigrant, and I have sympathy for people who are refugees," said Dinesh Chawla, CEO of Chawla Hotels. "I do believe in legal immigration."
The Scion hotel will be built from the ground up in Cleveland, Mississippi, in the Delta region that has a substantial blues music tourism industry. It will cost $20 million, with financing from Guaranty Bank, a local bank, Chawla said.
The three American Idea hotels will also be in the Delta, one each in Cleveland, Clarksdale and Greenville. Chawla said his company will renovate existing hotels and each renovation will cost up to $1.5 million. He said the renovation could take up to eight months.
"They're cashing in on the red states," said Kathleen Clark, a government ethics expert and law professor at Washington University in St. Louis. "I'm not surprised that the Trump family would look to opportunities to commercially exploit his political success."
Government ethics experts worry that developers seeking to curry favor with the president will be eager to help him in his new chains. They say their investments could work just like a campaign contributions, but without any limits on spending and disclosure requirements.
Trump Hotels CEO Eric Danziger has expressed confidence that his company can avoid any ethical trouble. He has said that any deals go through an "exhaustive, thorough" review.
Before Trump took the oath of office, he announced a series of steps to allay concerns that his sprawling business holdings could lead to conflicts between doing right by the country and his own financial interests.
Danziger said that American Idea brand would seek to capture the history and heritage of small towns by using local artifacts and materials. He threw out the idea of using things from towns to give hotels a local feel, like a vintage firetruck.
"It's about small town America," Danziger said. "We kind of look at it as flea market chic."
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