Companies of famous New York hotel developer Chang receive millions in PPP loans
Companies controlled by one of New York’s largest hotel developers have received millions of dollars in loans from a government program meant to support small businesses as the coronavirus hammers the economy.
At least eight companies owned by Sam Chang have received between $ 2.8 million and just over $ 7 million in federal small business loans, according to a list of deals released this summer. The amount and how the funds were distributed to Chang’s businesses had not yet been released.
More than 660,000 businesses have been approved for the Paycheck Protection Program, which is administered by the Treasury Department and the Small Business Administration. Loans went to businesses large and small as the coronavirus swept the country. Congress and the Trump administration continue to negotiate more stimulus funds. The The Senate plans to vote on a separate GOP-backed coronavirus bill on Wednesday.
Chang founded the McSam Hotel Group, known for buying and developing hotel properties with affordable accommodation. Some of these properties include hotels in and around Times Square, such as the Hampton Inn, Candlewood Suites, and Holiday Inn.
Chang once said it was worth $ 200 million in cash, according to a 2006 New York Times report. The Wall Street Journal reported in 2019 that he was planning to retire.
Although Chang owns many hotels in New York, he does not manage them and would not have applied for the loans himself. Commercial real estate and hotels suffered significant losses after pandemic hit the United States
McSam spokesman Sam Goldstein told CNBC in a statement that the loans were intended, in part, to help retain employees.
“The hospitality industry, as has been widely documented, is one of the hardest hit sectors of the economy due to the Covid-induced downturn, particularly in New York,” he told CNBC in an email. “A number of these sites have provided housing for healthcare professionals and others working for Covid-related purposes. PPP loans have allowed hotels to retain much of their workforce longer and continue to operate despite dramatic declines in customer base and revenue. . “
Most of the loans went through obscure limited liability companies to individual properties owned by Chang, according to records. Meanwhile, McSam Hotel Group saw between $ 150,000 and $ 350,000, but the total went to Chang’s head office, according to the McSam spokesperson.
The remaining federal loans went to seven other limited liability companies that do not bear his company name, such as Grandsam Island LLC and Brisam JFK LLC, according to the listing. A company called Lopm 39 De LLC has obtained between $ 1 million and $ 2 million in federal loans. CNBC discovered that these LLCs are related to Chang, as searches of the New York Business Database have shown that many list the same address as the McSam hotel group in Great Neck, NY.
LLCs named Grandsam Island, Brisam JFK, NDBPW 44, SCCQ Downtown, Lopm 39 De, LSCH and NYHK West 40, all of which have received federal loans, are all Chang business entities that own unique hotel properties in New York City, according to the spokesperson.
Grandsam owns the Radisson in Grand Island, NY Brisam JFK owns the Holiday Inn near John F. Kennedy Airport in Queens. The NDBPW owns the TownePlace Suites by Marriott in Manhattan. NYHK West 40 has a Manhattan Doubletree.
Although Chang has no direct ties to President Donald Trump, he had a stake in Trump Entertainment Resorts years ago, according to The Real Deal. It was one of the president’s previous companies that owned and managed properties such as the Trump Taj Mahal Casino in Atlantic City, New Jersey, before the company went bankrupt. Chang called Trump a friend in a 2008 interview with The real deal.
Many real estate companies, some related to Trump, saw a boost from the federal loan program.
GH Palmer Associates, a real estate company run by longtime Trump backer Geoffrey Palmer, has been approved for a loan.
Palmer has been close to Trump for years. He was one of the many business leaders from Trump’s Coronavirus Business Advisory Board and combined to donate at least $ 6 million to the pro-Trump America First Action super PAC, according to the non-partisan Center for Responsive Politics.
Dezer Development, a real estate company founded by Michael Dezer, says on its website that it has the same address as Trump International Beach Resort in Miami, Florida. The Dezer’s website says its “branded real estate portfolio includes six Trump branded towers.” Dezer obtained between 350,000 and 1 million dollars of PPP