- At least eight businesses owned by Sam Chang received between $2.8 million and just over $7 million in federal small business loans.
- Though Chang owns many New York hotels, he does not manage them and would not have applied for the loans himself.
- A spokesman told CNBC in a statement that the loans were intended, in part, to help retain employees.
Companies controlled by one of New York’s most prominent hotel developers received millions of dollars in loans from a government program intended to support small businesses as the coronavirus hammered the economy.
At least eight businesses owned by Sam Chang received between $2.8 million and just over $7 million in federal small business loans, according to a list of transactions made public this summer. The amount and the way in which the funds were distributed to Chang’s businesses had yet to be reported.
More than 660,000 businesses were approved for the Paycheck Protection Program, which is run by the Treasury Department and the Small Business Administration. Loans went to companies both small and large while the coronavirus swept through the country. Congress and the Trump administration continue to negotiate over more stimulus funds. The Senate plans to vote on a separate GOP backed coronavirus bill on Wednesday.
Chang founded the McSam Hotel Group, which is known for buying and developing hotel properties that offer affordable accommodations. Some of those properties include hotels in and around Times Square, such as the Hampton Inn, Candlewood Suites and Holiday Inn.
Chang once said he was worth $200 million in cash, according to a New York Times report from 2006. The Wall Street Journal reported in 2019 that he was planning to retire.
Though 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 major losses after the pandemic hit the U.S.
McSam spokesman Sam Goldstein told CNBC in a statement that the loans were intended, in part, to help retain employees.
“The hospitality industry, as has been extensively documented, is among the hardest hit sectors of the economy due to the Covid-induced downturn, especially in New York City,” he told CNBC in an email. “A number of these sites provided accommodations for health care professionals and others working for Covid-related purposes. The PPP loans enabled the hotels to retain much of their workforces for a longer period of time and to continue operating despite extraordinary drops in guests and revenue.”
Most of the loans went through obscure limited liability companies to single properties that Chang owns, records show. Meanwhile, McSam Hotel Group saw between $150,000 and $350,000, but the total went toward Chang’s corporate office, according to McSam’s spokesman.
The other federal loans went to seven other LLCs that do not bear his company name, such as the Grandsam Island LLC and the Brisam JFK LLC, the