Tuesday, March 10, 2009
Having succumbed to business bankruptcy in the early-1990s and barely averting the same fate for his personal finances, Donald Trump's gambit in the current decade to invest his name and reputation rather than his own money is running into increasing difficulty and, with a new season of Celebrity Apprentice now underway - a kind of Surreal Life meets Wall Street - the timing couldn't be any more delicious.
According to this report, when putting down a $165,000 deposit on an ocean-view condo at Trump Ocean Resort Baja two years ago, Los Angeles resident Hamed Hoshyarsar noted:
If Trump's name is on the project, it's got to be awesome. You can definitely count on it happening.Well, apparently it ain't happening.
Despite reassuring the media in 2007 that The Donald was "involved in every capacity" at the Baja project, just the other day, Ivanka Trump told reporters the following:
We are not the developer of Trump Baja – we are the brand, and we helped and designed a product in accordance with our standard. We never took on the obligations of the developer and we were not responsible for the financing.The Hoshyarsar family and their attorneys apparently disagree and there are a cadre of other investors ringing up their lawyers, some of the sadder stories appearing in this item at LA Around Town.
Guadalupe Mendoza paid a $200,000 deposit at the first-day sale in San Diego, refinancing her Downey home and getting a loan from a sister. "I did it in less than a minute," said Mendoza, an administrator in the Los Angeles County Office of Education. "I remember my head was hurting and thinking, 'My God, what was that?' I was thinking maybe I should have asked questions."Really?
A gubment worker who plunks down a cool $200K freshly extracted from her primary residence in Los Angeles to buy into the Trump dream has a headache?
This follows a bankruptcy filing last month for a casino company that he founded and which still bears his name along with ongoing disputes in Chicago over a condo project where, apparently, some of his own money has been invested.
Of course, last year he reportedly sued his partner in Israel who was building yet another "Trump Plaza" and then came stories of lawsuits in Florida over more "Trump Towers I, II, and III" which are probably more like numbers XXII, XXIII, and XXIV.
And amid the toilet bowl flush that has been the Las Vegas real estate market, the gawdy new Trump Tower that rose from the desert floor, a project that has defied gravity for years now, is dealing with a group of skittish buyers.
This WSJ report($) has all the details:
Three-fourths of the buyers of condo-hotel rooms at the Trump International Hotel & Tower Las Vegas have failed to close contracts, according to public records and people familiar with the project.That's a neat trick - to thrive when everything around you is in a "massive depression".
Consequently, the gold-glass skyscraper, a joint-venture between Mr. Trump and casino magnate Phil Ruffin, is more than $200 million short of paying off the project's construction loan, which comes due in July, the two men said. But Mr. Trump said that the project will turn out fine and that he is in talks with the lender, Hypo Real Estate Holding AG, to extend and restructure the project's $537 million construction loan and operate the tower as a hotel. Hypo didn't return calls requesting comment.
As for the Vegas project, Mr. Trump said it isn't in trouble. "We are doing very nicely considering that Las Vegas is in a massive depression," he said. He blamed the failed closings on the lack of mortgage financing, and said he hopes more people will eventually make good on the sales contracts.
Oh yeah, and he's reportedly over $200,000 behind on last year's rent on the site of his planned catering hall-restaurant at Jones Beach, Florida.