By Marice Richter
mrichter@bizpress.net
Wealthy Dallas businessman Monty Bennett, who runs a real estate investment trust with holdings of high-end hotels and resorts that include The Ashton Hotel in Fort Worth, may be the beneficiary of the largest payout from the federal government’s Paycheck Protection Program.
The U.S. Small Business Administration’s low-interest loan program aimed at helping small businesses adversely impacted the by COVID-19 outbreak approved loans from Key Bank for Bennett’s Ashford Hospitality Trust of $30.1 million, according to public documents. The company received $29.9 million as of April 21.
Separately, Braemar Hotels & Resorts Inc., a real estate investment trust that is advised by Bennett’s asset management firm, Ashford Inc., was approved for $15.8 million in loans through the SBA program, according to public documents. The company received about $10.6 million from Key Bank as of April 21 but anticipates receiving more.
The combined $46 million in loans is the largest awarded to any public company, according to research of public disclosures by The Wall Street Journal. The $30.1 million is about 10 times the average amount a public company received.
The two REITS had combined revenue of nearly $2 billion at the end of 2019.
The record award to Ashford Hospitality was made through 42 loans to the company’s subsidiaries. Besides The Ashford, which was awarded $101,580, other Dallas-Fort Worth area hotels that will benefit include Marriotts in Dallas and Irving, an Embassy Suites in Dallas and a Residence Inn in Plano.
The largest loans were awarded to Ashford subsidiaries benefitting the Renaissance Nashville, $3.7 million; and the Ritz Carlton Atlanta, $3.4 million.
On March 18, Bennett told CBS News that he laid off or furloughed 95 percent of 7,000 workers at the 117 properties owned or operated by Ashford across the United States.
Bennett has stated that he would use 75 percent of the PPP loans to bring back and pay employee salaries and the other 25 percent on rent, utilities and interest payments as required by the loan program.
Despite the crisis, Bennett and other preferred shareholders received millions of dollars in preferred benefits as the COVID-19 impact was spreading, The Wall Street Journal reported.
Besides ownership of The Ashton, a historic property and boutique hotel in downtown Fort Worth, Bennett’s Ashford Hospitality owns the downtown Fort Worth Hilton. The Fort Worth Hilton did not receive one of the loans.
The owners behind large restaurant chains like Shake Shack, Potbelly, Ruth’s Chris Steak House and Taco Cabana were able to qualify despite employing thousands of workers and get the maximum $10 million in loans. Shake Shack said April 20 it will return its loan to give smaller restaurants a chance to get government money. The New York burger chain, which employs nearly 8,000 workers across 189 outlets, said it secured alternate funding.
Bennett’s name is also familiar in Fort Worth for his prolonged battle against the Tarrant Regional Water District over placement of the IPL water pipeline on his East Texas ranch.
Bennett sued the TRWD as it was attempted to use its power of eminent domain to seize a piece of his ranch for the underground pipeline to transport water from Lake Palestine to the Dallas-Fort Worth area.
Bennett argued that pipeline construction would disrupt a wildlife sanctuary on his property.
The suit was eventually settled and the pipeline was re-routed around Bennett’s land but not before Bennett bankrolled several candidates for the TRWD board of directors who supported his desire for greater transparency in water district dealings and decision-making.
Bennett had sued after his attempts to present his reasons for re-routing the pipeline fell on deaf ears.
Ashford Hospitality Trust become a public company in 2013, nearly 40 years at it was started by Bennett’s father as a family business focused on acquiring struggling hotels.
Congress had approved the paycheck program to inject $349 billion into helping emergency assistance to small businesses struggling to pay employees and remain solvent during the COVID-19 health crisis.
But a large chunk of the loan money was directed toward 94 publically-traded companies with values of more than $100 million. Nine of the loans were for the maximum $10 million, well above the typical loan of $206,000.
The money ran out less than two weeks after its April 3 opening day for applications.
The Associated Press contributed to this report.