BajaNomad

Pace at Trump Ocean Resort Slows As Investors Weather Downturn

bajabound2005 - 8-8-2008 at 10:09 AM

Pace at Trump Ocean Resort Slows As Investors Weather Downturn
By MICHELLE MOWAD - 8/11/2008
San Diego Business Journal Staff

Amid rumors of failure to secure financing and reports of having no construction permit from the city of Tijuana, Trump Ocean Resort in Baja California is continuing development of its $200 million-plus condo hotel resort, albeit at a slow pace.

The 444-unit “condotel” project in Punta Bandera is by Los-Angeles-based developer Irongate and The Trump Organization.

A condo-hotel, also known as a hotel-condo, is both a condominium and a hotel.

Due to a confidentiality agreement, Irongate would not disclose details of its financing arrangements.

“With that said, we have been working closely with one of the largest banks in the world, which is actively investing in Mexico development,” said Carlos Palafox, director of development for Irongate.

Palafox also rebutted claims that the development did not have proper approvals or permits.

The first tower of Trump Ocean Resort was initially scheduled to be completed in late 2008, according to marketing material prepared at the time.

Palafox said he anticipates a completion date for tower one in the fall of 2010 with a second tower completion set for six to 12 months later.

No construction work is currently being done.

Credit Crunch

“The delay is a direct result of the credit crunch market conditions affecting lending institutions around the world,” said Palafox. “We will proceed with the remainder of the construction once the financing of the construction loan of tower one is closed.”

Several resort and residential real estate experts knowledgeable about the Baja region declined to speculate on the financing.

Thus far, developers have completed the excavation for the first tower and completed installation of the underground drainage for the construction site.

Foundations and the remainder of construction are planned to commence by year end, according to Irongate.

The project is Irongate’s second project with Trump. The two are also developing the Trump International Hotel and Tower Waikiki Beach Walk in Honolulu. The project in Hawaii sold out in its first day on the market. All 464 units sold for a total of $700 million, with individual units selling from the mid-$400,000’s to more than $9 million for a three-bedroom penthouse.

The hype of the Trump name also set record sales records in Mexico. On the opening day more than $122 million in sales were recorded at Trump Ocean Resort. As of early August, more than 230 units sold for a total value of $150 million.

Sales prices at Trump Ocean Resort have not been lowered as they have across the Baja coastal market. Units in the two tower project range from 500 square feet to 2,200 square feet. Prices go from $300,000 to more than $1 million. Plans include a spa, fitness center, pool area, and restaurants.

DENNIS - 8-8-2008 at 10:23 AM

Quote:
Originally posted by bajabound2005
A condo-hotel, also known as a hotel-condo, is both a condominium and a hotel.



I'm sure glad they explained that.

jodiego - 8-8-2008 at 10:24 AM

Is this the project going up at Baja Malibu, one of the most polluted beaches around??? Are they planning on doing something about it or are they just going to add to the problem?
:?:

sanluquëna - 8-8-2008 at 10:35 AM

Quote:
Originally posted by bajabound2005
“With that said, we have been working closely with one of the largest banks in the world, which is actively investing in Mexico development,” said Carlos Palafox, director of development for Irongate.


I've been in that business most of my life. That is turn-speak for saying they have no financing. If they had financing, they would say so and name the bank.

Trump has no financial investment in this project and has guaranteed absolutely nothing. He got a piece of the profits for lending his name, that's all.

The people who bought there have already lost their money. They just don't know it yet.

Woooosh - 8-8-2008 at 11:15 AM

How is "never broke ground" for a slow pace. They took the cash in Trumps name (millions of it) and bailed. That'll teach Trump to trust his brand to a Mexican developer. They shouldn't need any financing to start the first tower with the money they already collected. They collected so much money it broke the Mexico sales record. Has no one ever heard of "completion bonds" down here? There were plenty of "buyer beware" flags at the time- but they held the sales event off-site in San Diego and even touted that Ivanka Trump herself bought a penthouse. What specualator could resist in 2005?

If fact, Trump Baja never got as far as pulling building permits, let alone finish some construction. Not even a ditch at the site- just a huge pile of dirt. The article says they put in some pipes for sewage- not true. They dug a ditch from east to west on the south part of the site- but filled it back in. That's all in three years! They never really figured out what to do with the sewage (hence no permits to start construction) that needs to be pumped back up the hill behind them to the sewage treatment site.

As one poster noted- maybe a buyer could have gotten a wiff of the sewage if they did their due diligence and went to the site. It is tghe most polluted area of northern baja and wil never be safe to swim or wade in (even if the artist renderings show kids playing in the tide pools). The holding ponds for sewage treatment are just on the other side of the hill from the Trump project (a great million dollar view to be sure). If you google map the location you can see the treatment ponds and where 3 million gallons of semi-treated TJ sewage hits the ocean by pipeline every day.

[Edited on 8-8-2008 by Woooosh]

[Edited on 8-8-2008 by Woooosh]

bancoduo - 8-8-2008 at 11:15 AM

Quote:
Originally posted by sanluquëna


Trump has no financial investment in this project and has guaranteed absolutely nothing. He got a piece of the profits for lending his name, that's all.

The people who bought there have already lost their money. They just don't know it yet.
Looks like a little more then his name.en.wikipedia.org/wiki/Trump_Ocean_Resort_Baja_Mexico

CaboRon - 8-8-2008 at 11:58 AM

Quote:
Originally posted by jodiego
Is this the project going up at Baja Malibu, one of the most polluted beaches around??? Are they planning on doing something about it or are they just going to add to the problem?
:?:


I don't think they plan on doing anything including building...

This apears to be a shell game and the money will disapear before anything is built.

CaboRon

DENNIS - 8-8-2008 at 12:24 PM

Look at the foliage surrounding the place. From the road it looks like a tropical rain forest of palm trees.

woody with a view - 8-8-2008 at 12:40 PM

Quote:
Originally posted by DENNIS
Look at the foliage surrounding the place. From the road it looks like a tropical rain forest of palm trees.


if they only knew.....seems the lush tropical odors are missing, NO?:barf:

Taco de Baja - 8-8-2008 at 12:43 PM

The Trump Entertainment Resorts, Inc TRMP portion of the Trump empire sure isn't doing so hot...

Current Price: $1.46
52 week high: $8.87
52 week low: $1.35
In January 2007 it was trading at $17/share
Quote:
Mark Juliano, Chief Executive Officer of the Company, said, “The weakened economy – driven by tight credit markets, declines in consumer confidence and rising oil prices – has had a significant impact on the gaming industry across America.

“As a result, our net revenues and those of many of our competitors have been negatively impacted. However, despite these economic pressures, the fundamentals of our business are sound. Today, we are offering a more competitive product than before, and we are continuing to trim costs where appropriate while effectively yielding our hotel inventory to attract and retain the most profitable customers possible.


Link to the sink

CaboRon - 8-8-2008 at 01:28 PM

Quote:
Originally posted by DENNIS
Look at the foliage surrounding the place. From the road it looks like a tropical rain forest of palm trees.


So, will the golf course wrap around the treatment ponds ?

CaboRon

woody with a view - 8-8-2008 at 01:40 PM

Quote:
Originally posted by CaboRon
Quote:
Originally posted by DENNIS
Look at the foliage surrounding the place. From the road it looks like a tropical rain forest of palm trees.


So, will the golf course wrap around the treatment ponds ?

CaboRon



gives a "hole" new meaning to hazard......:lol::lol::lol:

docsmom - 8-11-2008 at 09:55 AM

Agreed, the project is defunct. This has nothing to do with Trump, the developers, or the location. Like almost all projects throughout the US Southwest and Baja, the market tanked, the creative, no rules financing for both developer and buyer went away, and boom, the market collapsed. It's unfortunate that so many buyers on both sides of the border speculated too late on real estate. If you got in in 2004 or before you're OK and made a profit. 2005 or 2006 you're taking it in the shorts. Those of us who have been in the business for a long time knew that the run-up was false and would lead to the most catastrophic real estate event in our lifetimes. And, here it is. The positive note to all this is that when the bloodshed is done we will be back to a buyer's market and then everyone will profit again. My condolences to all that invested too late.

Woooosh - 8-11-2008 at 10:08 AM

Stick a fork in it- it's done. Like always in Mexico- the investors are the last ones to know they got screwed. Great picture from Google Maps BTW, I wish I could figure out how to post those.

Oh ye of little faith!

ELINVESTIG8R - 8-11-2008 at 03:52 PM

pacside - 8-11-2008 at 04:02 PM

Elinvest
so are you retired or what? how do you find the time to put together all these cool graphics? I do enjoy them...thanks for posting.
pacside

ELINVESTIG8R - 8-11-2008 at 04:13 PM

No Pac I work 40 hour work week. I chime in when there is a lull here at work.

pacside - 8-11-2008 at 04:20 PM

Quote:
Originally posted by ELINVESTI8
No Pac I work 40 hour work week. I chime in when there is a lull here at work.


you are either super efficient or there are long lulls at your work...i hope it's the latter for you.
pacside