A Primer on Donald Trump’s Real Estate Deals

Kevin Brass
Dec 27, 2017 · 8 min read
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Trump Toronto in 2011 (Nicholas Moreau/Wikipedia)

As President Trump careens from one controversy to the next, reporters continue to explore the murky world of Trump’s real estate dealings, generating stories that read like cheap crime novels.

On a case by case basis, each project offers bizarre characters, double-dealings and quasi-criminal enterprises. Taken together, as a body of work, it is an amazing litany of scam, fraud and corruption, blowing apart his followers’ image of Trump as a hard-chargin’ businessman who, you know, might have cut a few corners.

In recent years, as traditional lenders turned their back on him, Trump was eagerly looking for opportunities to leverage his brand, striking an astonishing number of deals that ended in lawsuits, bitter investors and accusations of criminal activities. If Special Counsel Robert Mueller is, in fact, diving into Trump’s business deals, he is going to be busy for a long time.

Here is a quick roundup of Trump’s noteworthy recent deals (and links to coverage).

Trump Soho

This was supposed to be Donald, Jr. and Ivanka’s big developer coming out party. But instead the downtown New York project tanked, when the market crashed and buyers balked at the “hotel-condo” concept. And then Donnie and Ivanka were caught lying to investors about sales. They said 60 percent had been sold when it was actually closer to 15 percent. Oops. The Trumps acknowledged they knew the statements were lies in e-mails found by investigators, The New Yorker reported.

The Trumps settled a civil suit, but many observers thought they would face criminal charges, considering the evidence of fraud. The New Yorker drew a line between Trump’s attorney’s campaign contributions and the prosecutor’s surprising decision to drop the case. Oh, and don’t forget, Trump Soho has also been linked to money laundering by… wait for it… Russian buyers! Trump’s partners on the project included shady Soviet-born businessman Felix Slater. The Trump Organization officially cut ties to the project earlier this year.

“Donnie and Ivanka were caught lying to investors about sales. They said 60 percent had been sold when it was actually closer to 15 percent. Oops.”

Trump Toronto

The Trump International Hotel and Tower Toronto accomplished something remarkable: it failed in the red-hot Toronto market. The project went bankrupt and every investor lost their money, the Toronto Star reports. Trump’s initial partner in the project was a “fugitive fraudster on the run from U.S. justice,” according to the Star’s coverage. The other investors included several “colorful” characters, who shared a complex mix of international ties and a lack of knowledge of anything to do with condo development, the Star reported. Financing was arranged through an Australian bank that had once been accused of laundering money for… wait for it… wealthy Russians!

Trump again was accused of making a wide range of misleading statements to investors, including inflating sales numbers, and his name was eventually removed from the tower. But Trump is believed to be the only one involved in the project to walk away with cash.

Trump Azerbaijan

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Trump Baku (Chuck Moravec /Wikipedia)

Anybody with Google can learn that Azerbaijan is a cesspool of corruption and money laundering. But the Trumps eagerly dove into a project in a dumpy part of Baku with a band of shady local characters, who were ready to trumpet the Trump name. The tower hasn’t opened and reporting by The New Yorker revealed the Trumps’ partners included oligarchs linked to the Iranian Revolutionary Guard. In e-mails released by Wikileaks, a U.S. diplomat refers to one of the project’s backers as “notoriously corrupt even for Azerbaijan.”

Trump’s deal was to license his name and manage the property, but the New Yorker reporting suggests the Trump Organization was actively involved in the project and dangerously close to violating the Foreign Corrupt Practices Act. Several Democratic senators have called for an investigation.

Trump in the Republic of Georgia

Trump made a big splash in 2011 with his deal to build two towers in the Republic of Georgia, including a project in Batumi, described as the “Monte Carlo of the Caucasus.” He staged press conferences in Georgia and New York with then-Georgian President Mikheil Saakashvili, who Trump described as as a personal friend.

But the project, which Trump said was budgeted at $250 million, never happened. Charges of fraud and money laundering swirl around the developer and the project’s financial backer. Sources told the New Yorker the deal involved “unorthodox financial practices” and “intertwined” Trump Organization with an oligarch with… wait for it… direct ties to Russia’s President, Vladimir Putin. “Virtually none of the things that Saakashvili and Trump said about the deal were true,” the New Yorker reported.

“Sources told the New Yorker the deal involved “unorthodox financial practices” and “intertwined” Trump Organization with an oligarch with ties to Vladimir Putin.”

Trump pulled out of the deal after he was elected. The Georgia developer said Trump ended the deal to avoid a conflict of interest. But the Trump Organization denied it, saying the project was ended as part of “normal housekeeping.”

Trump Baja California

Remember during the campaign when Trump said he doesn’t settle lawsuits? That was, um, not true. He settled a lawsuit in 2013 after he was accused of fraud by more than 100 buyers in Trump Ocean Resort Baja Mexico, a failed project south of Tijuana. Trump had only licensed his name to the doomed development — his typical development deal in recent years — but Trump was accused of inflating his role and over-hyping sales to woo investors. (Yes, shocking!)

The buyers lost their money when the developers said they had already spent their deposits. Trump blamed the developer, but settled with the buyers for an undisclosed amount, rather than fight them.

Trump Panama

The 72-story Panama City project is one of Trump’s few international success stories. He was reportedly paid as much as $50 million for the use of his name, as well as a contract to manage the hotel. But this one gets messy. A Reuters investigation found one of the key brokers on the project, “a Brazilian former car salesman” named Alexandre Ventura Nogueira, who is facing criminal fraud and forgery charges, “did business with a Colombian who was later convicted of money laundering and is now in detention in the United States; a Russian investor in the Trump project who was jailed in Israel in the 1990s for kidnap and threats to kill; and a Ukrainian investor who was arrested for alleged people-smuggling.” And it gets messier. One of the project supporters was Ricardo Martinelli, who was President of Panama when the tower opened in 2011. Now Martinelli is dodging a wide variety of corruption charges, including an accusation he embezzled $45 million from a government school lunch program.

Trump Ft. Lauderdale/Tampa

In the Trump world, there was nothing very special about the deals to build resorts in Ft. Lauderdale and Tampa. The stories follow a familiar path: Trump signs licensing deal. Trump promotes project. Trump says it is going to be great. Project fails. Investors are screwed. Trump denies any connection to the project.

In the Ft. Lauderdale case, the courts sided with Trump, essentially saying investors should have been aware of Trump’s true role, if they read the fine print. The Tampa project resulted in a flurry of lawsuits, with Trump suing the developer, the developer suing Trump, and buyers suing both Trump and the developer. Everything was eventually settled, with buyers receiving pennies on the dollar for their investments.

Trump Brazil

The Trump Organization bailed on a deal to manage a Rio de Janeiro hotel after the developers were under a criminal investigation for “questionable” investments. The hotel was supposed to be open for the Rio Olympics, but it didn’t happen. “Unfortunately, the developers of the Rio de Janeiro hotel are significantly behind on the completion of the property, and their vision for the hotel no longer aligns with the Trump Hotels brand,” Trump Hotels spokeswoman Christine Lin told The Associated Press in 2016.

Trump Golf

Golf may be one reason Trump is reluctant to release his tax returns. He’s been betting big on golf courses in recent years, while the sports’ popularity has been plummeting. Participation is down more than 20 percent in the last decade, according to industry data, and there is little sign that millennials have any interest in paying big bucks to walk the links with their parents.

Most of Trump’s golf holdings are private and shaded from scrutiny (outside his tax returns), but his deals in Scotland provide some clues. In 2016, Trump’s two Scottish golf courses reported losses totaling $24 million, amid declining revenue, according to documents filed with the Scottish government. The Trump International Golf Links, the course Trump opened in 2012, lost $1.8 million, a 28 percent increase from a year earlier, the Associated Press reported.

Trump University

Trump’s much-chronicled attempt to separate real estate agents from their money is almost forgotten amid his recent scandals. It seems like long ago that Trump said the judge in the case couldn’t rule fairly due to his Mexican ancestry. Although Trump always denied the fraud charges, many real estate industry observers simply viewed the whole project as a low level scam. “We started looking at Trump University and discovered that it was a classic bait-and-switch scheme,” New York attorney general Eric Schneiderman said.

Trump said he would never settle, but ultimately paid $25 million to make the suits go away, after he was elected. In many ways, the settlement was a disappointment for observers who were eager to see Trump deposed and explain why he thought it was “a terrific school that did a fantastic job.”

Kevin Brass writes regularly about international property and development. He is the author of the “The Cult of Truland,” a satirical novel set in the world of celebrity journalism.

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