NEW YORK CITY—When a hotelier has the US State Department andthe White House as its customers, there's probably a good chance ofscrutiny coming your way when the ownership changes hands.

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That appears to be happening in the case of the Waldorf-AstoriaNew York sale, which went into contract last week, with a Chinese insurancecompany being the buyer. The two US government entities areconcerned about potential security risks, according to the WallStreet Journal.

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US officials are reviewing the Oct. 6 purchase of the Waldorf bythe Beijing-based Anbang Insurance Group, which bought the hotelfrom Hilton Worldwide for $1.95 billion. Anbang reportedly islinked to the Chinese communist party, notes the New York DailyNews.

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Terms of the sale allow Hilton to run the hotel for the next 100years and call for "a major renovation" that has raised concerns inWashington, where fears of Chinese eavesdropping and cyberespionage run high.

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Officals also note that the sale could impact the government'slongstanding relationship with the hotel, which serves as home tothe American ambassador to the United Nations and hosts thepresident and hundreds of US diplomats during the annual U.N.General Assembly. US Presidents historically have stayed at thehotel during NYC visits as it features a series of undergroundtunnels that could facilitate shelter or a quick getaway in thecase of terrorism or some other catastrophic event.

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A spokesman for the US Mission to the United Nations, tells theJournal that decisions about the future of the U.S.relationship with the Waldorf would be made based on cost, Anbang'slong-term plans for the hotel, and the government's needs andsecurity concerns.

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For more than 50 years, the State Department has leased aresidence for the US ambassador to the U.N. on the 42nd floor ofthe hotel's Waldorf Towers. And, every September, the departmenttakes over two floors of the Waldorf to serve as headquarters forthe horde of U.S. diplomats that decamp from Washington for theU.N. General Assembly. During the session, the president spendsseveral nights at the Waldorf. US law allows the state departmentto rent the ambassador's residence for a term of 10 years or less.The current lease expires next year with an option to renew it forone or two years.

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But ending the government's relationship with the Waldorf couldbe problematic and costly, officials note to the Journal. The U.N. ambassador's residence must meet many requirements,the spokesman adds, including appropriate housing, reception space,security, proximity to the US Mission to the United Nations and theU.N. headquarters.

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Rayna Katz

Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.