Photo by Rich Renomeron

The D.C. government will not be handing any special tax favors to Donald Trump. The Trump Organization was turned down in its request to skate a city-imposed tax on its planned redevelopment of the Old Post Office, the Associated Press reports.

Trump had sought to avoid paying the district’s possessory interest tax, which is levied on vendors and contractors that conduct business on government properties that are otherwise exempted from local property taxes. The Trumps won a federal bidding contest last year to transform the Old Post Office, at 1100 Pennsylvania Avenue NW, into a luxury hotel with 261 rooms, three restaurants, spa, and convention space.

It was estimated earlier this month that the Trump Organization’s expected taxes on the hotel could be equal to the annual $3 million lease it will pay on the historic tower. The possessory interest tax is charged at the same rates as D.C.’s commercial property taxes, which is 1.65 percent for the first $3 million in assessed value, and 1.85 percent for any property value thereafter.

The Trump Organization projects its renovation of the Old Post Office will cost $200 million, which will be partly funded by the private investment firm Colony Capital Partners.

Trump’s unsuccessful attempt to avoid paying D.C.’s possessory interest tax is the second recent instance of the city cracking down on the operator of a high-profile federal building. In December, D.C. officials reached a $7.5 million settlement with the companies that run the retail space at Union Station.