First hotel in new Trump chain seeks Mississippi tax breaks

AP

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FILE - In this Monday, June 5, 2017 file photo, Suresh Chawla, left, of Chawla Hotels and Eric Danziger, CEO of Trump Hotels, are shown in New York, at a launch event for four new Trump hotels being built in Mississippi. Chawla Hotels, a Mississippi developer that has joined with the Trump Organization to open the first of possibly dozens of hotels in the U.S. president’s new mid-priced chain has applied for millions of dollars of state tax breaks. (AP Photo/Kathy Willens, File)

NEW YORK (AP) — A Mississippi developer that has joined with the Trump Organization to open the first of possibly dozens of hotels in the U.S. president's new mid-priced chain has applied for millions of dollars of state tax breaks.

Chawla Hotels filed an application in December for a tax break with the Mississippi Development Authority worth as much as 30 percent of eligible construction costs, or roughly $6 million, CEO Dinesh Chawla said Friday.

The Trump Organization announced a deal with the hotel company in June as part of the rollout of two new chains, drawing complaints from ethics experts that government officials and local real estate partners might offer special favors to the president's business to curry favor with him.

President Donald Trump faces several lawsuits that allege he is violating the so-called emoluments clause of the U.S. Constitution forbidding presidents from accepting gifts or payments from foreign or domestic governments.

In an effort to resolve conflicts of interest issues, Trump handed management control of his company to his two adult sons before he took office last year. Critics say that's not good enough, and that he needs to sell his ownership interest in his business to resolve what they claim as emoluments violations.

The president's lawyers have argued that normal business transactions don't fall under the emoluments prohibition.

Chawla said he's sees nothing wrong with his company applying for tax breaks, which were first reported by The New York Times.

"I'm not a legal scholar, but I'm an ethical business person," he said in an interview with The Associated Press. "I don't toss the word 'Trump' around. I don't ask anyone for favors."

Chawla said his company has already received abatements on city and county taxes.

The Trump Organization had no comment.

The Trump Organization, which is based in New York, announced its two new chains — the mid-priced Scion, and the budget-priced American Idea — with great fanfare last year. Trump Hotels CEO Eric Danziger said he expected dozens of Scions, for instance, in short order.

But the chains have gotten off to a slow start, with only Chawla Hotels agreeing to join up with the company so far.

Chawla said that he expects it will cost $20 million to build his Trump hotel, which will be a Scion. The hotel in Cleveland, Mississippi, will be the first in Trump's new chain.

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