Firms controlled by one of New York's best-known hotel developers received millions in loans from a government program designed to help small businesses as the coronavirus pounded the economy.
At least eight Sam Chang-owned companies received between $ 2.8 million and just over $ 7 million in federal small business loans. This comes from a list of transactions published this summer. The amount and the manner in which the funds were distributed to Chang's companies had yet to be reported.
More than 660,000 companies have been approved for the Paycheck Protection Program run by the Finance Department and Small Business Administration. Loans went to businesses large and small as the coronavirus swept the country. Congress and the Trump administration continue to negotiate additional stimulus funds. The Senate plans to vote on a separate GOP-backed coronavirus law on Wednesday.
Chang founded McSam Hotel Group, known for buying and developing hotel properties that offer affordable accommodations. Some of these accommodations include hotels in and around Times Square, such as the Hampton Inn, Candlewood Suites, and the Holiday Inn.
According to a 2006 New York Times report, Chang once said he was worth $ 200 million in cash. The Wall Street Journal reported in 2019 that he was planning to retire.
Although Chang owns many New York hotels, he does not manage them and would not have applied for the loans himself. The commercial real estate and hotel industries suffered significant losses after the U.S. pandemic.
McSam spokesman Sam Goldstein told CNBC in a statement that part of the loan was to be used to retain employees.
"The hotel industry, as has been well documented, is one of the hardest hit industries due to the downturn caused by Covid, particularly in New York City," he told CNBC in an email. "A number of these locations provided accommodations for health professionals and others working for Covid purposes. The PPP loans allowed hotels to retain a large portion of their workforce for an extended period of time, despite exceptional losses in guests and revenue keep working. "
Most of the loans went through obscure limited liability companies to individual properties Chang owns, records show. Meanwhile, McSam Hotel Group raked in between $ 150,000 and $ 350,000, but according to McSam's spokesman, the entire amount went to Chang's corporate office.
The other federal loans went to seven other LLCs that don't bear his company name, such as Grandsam Island LLC and Brisam JFK LLC, as the list shows. A company called Lopm 39 De LLC recorded federal loans of $ 1 million to $ 2 million. CNBC discovered these LLCs were linked to Chang because a search of the New York business database found that many gave the same address as the McSam Hotel Group in Great Neck, New York.
The LLCs Grandsam Island, Brisam JFK, NDBPW 44, SCCQ Downtown, Lopm 39 De, LSCH and NYHK West 40, which have all received federal loans, are all Chang companies that own individual hotel properties in New York, according to the spokesman.
Grandsam owns the Radisson in Grand Island, New York. Brisam JFK owns the Holiday Inn hotel near the John F. Kennedy Airport in Queens. NDBPW owns the TownePlace Suites by Marriott in Manhattan. NYHK West 40 owns a Manhattan Doubletree.
While Chang has no direct ties to President Donald Trump, he was involved 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 like 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 of which were affiliated with Trump, saw a boost from the federal loan program.
G.H. Palmer Associates, a real estate company owned by longtime Trump supporter Geoffrey Palmer, has been approved for a loan.
Palmer has been close to Trump for years. He was one of many corporate directors on Trump's coronavirus corporate advisory board and, according to the non-partisan Center for Responsive Politics, has given at least $ 6 million to Trump's super-PAC America First Action.
Dezer Development, a real estate company founded by Michael Dezer, states on its website that it has the same address as Trump International Beach Resort in Miami, Florida. The Dezer website states that the "branded real estate portfolio includes six Trump branded towers". Dezer received between $ 350,000 and $ 1 million from PPP