Former Trump hotel partner still eligible for $6 million state tax break despite felony theft charge

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Kathy Willens/Associated Press

Chawla Hotels CEO Dinesh Chawla speaks as Donald Trump Jr., executive vice president of The Trump Organization listens, Monday, June 5, 2017, during an event at Trump Tower in New York.

Dinesh Chawla, a Mississippi hotel owner, is still eligible to receive up to $6 million in state tax breaks on his planned luxury hotel in Cleveland despite his arrest this summer for allegedly stealing luggage from the Memphis airport.

In August, a Memphis-area television station reported that Chawla — the chief executive officer of Chawla Hotel Group — was charged with felony property theft after being seen taking a suitcase from the airport’s baggage claim carousel.

“While he was away, police towed his car and say they found several bags that had been stolen, containing thousands of dollars worth of items,” WREG reported.

Recently, Melissa Scallan, a spokesperson for the Mississippi Development Authority, said Chawla’s legal troubles would have no impact on his company’s eligibility for state tax breaks.

“Nothing has changed with the hotel incentive. It is performance based, meaning once the hotel opens, they will get a rebate based on hotel occupancy, sales, etc.,” Scallan told Mississippi Today.

When reached by phone shortly after his arrest, Dinesh Chawla declined to comment.

ProPublica reported that Gov. Phil Bryant introduced then-candidate Donald Trump to Dinesh’s brother and business partner, Suresh, in August 2016 at a Jackson fundraiser. Suresh Chawla subsequently donated approximately $50,000 to Trump and the Republican National Committee.

The Chawla company operates 17 hotels based in the Delta and spearhead a workforce training initiative for prospective hospitality industry workers. The Trump Organization partnership had received national attention. But in February, the Trump family said they were pulling out of the project because of what they called the harassment they and their hotel properties were receiving.

“We live in a climate where everything will be used against us, whether by the fake news or by Democrats who are only interested in presidential harassment and wasting everyone’s time, barraging us with nonsense letters,” said Eric Trump, the president’s son, in a statement at the time.

Dinesh Chawla said then he would continue with the venture. And at the time, state officials said the tax rebate – up to $6 million – was still available for the project because it was designated for Chawla Pointe, not the Trump Hotels.

Under the program, the state rebates the developers a portion of the sales tax collected at the hotel once it is in operation. A hotel investment of at least $15 million is required to be eligible for the rebate program. And under the program, up to 30 percent of “eligible capital investment” can be returned to the developer.

The sales tax rebate program, developed for tourism projects, has been used for other hotels and tourism projects, and most notably for the Trustmark Park in Pearl where the Mississippi Braves play professional baseball. The incentive program also has been used for shopping malls.

What is not clear is when the hotel will open. Previous reports cited this fall for the opening of the property. But Cleveland Mayor Billy Nowell said, just from observing work on the property, he is doubtful that it will open this year.

Bryant’s office did not respond to requests for comment on the tax rebate that Chawla is eligible for if the hotel opens.

Kelsey Davis contributed to this story.