BajaNomad

The Donald is at it again

conquestkm - 4-11-2009 at 06:50 AM

Donald Trump sues developer of Baja California condo project bearing his name

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Don Bartletti / Los Angeles Times
A billboard advertises the site of Trump Ocean Resort Baja Mexico about 10 miles south of the border.
The tycoon accuses Irongate Wilshire's principals of failing to follow through on promises to build a five-star resort called Trump Ocean Resort Baja Mexico.
By Stuart Pfeifer
April 10, 2009
Real estate tycoon Donald Trump filed a lawsuit Thursday against a Los Angeles developer that paid to use his name for an oceanfront condominium project in Baja California but then failed to build it.

Filed in federal court in New York, the lawsuit comes one month after dozens of buyers sued Trump and Los Angeles developer Irongate Wilshire, demanding return of $32 million of down payments they made in 2006 and 2007 for the planned luxury condos.




Photos: Trump resort
Trump Baja venture leaves buyers high and dry

The earlier lawsuit accused Trump and Irongate of misleading buyers about Trump's role in the project, having described him as a co-developer when he had merely accepted a licensing fee to lend his famous brand to the 525-unit project.

In his $40-million lawsuit, Trump accuses Irongate principals Jason Grosfeld and Adam Fisher of failing to follow through on promises to build the five-star resort, at which units sold for $275,000 to $3 million. Grosfeld and Fisher could not be reached. Trump declined to comment.

The legal battle centers around plans for a three-tower project to be built on 17 oceanfront acres about 10 miles south of the U.S. border. Trump Ocean Resort Baja Mexico was intended to achieve a five-star rating, with a fine-dining restaurant, full-service spa, swimming pools, tennis courts and hiking trails.


Buyers lined up at a San Diego hotel in 2006 for the first opportunity to buy, snapping up 80% of the available units. Many units in a second tower were sold in 2007. Buyers were required to make 30% down payments to secure their purchases.

In February, Trump announced that he had withdrawn from the project because the developer had run out of money and was not able to complete the job.

A month later, the developer disclosed that it was not going to complete the Baja development.

Trump said in an interview Monday that he was unfairly targeted in the buyers' lawsuit. He said he played no role in managing the development and was unhappy with what happened.

"We're looking into the whole situation because it doesn't make me happier than it makes them. I don't like to see people lose money," Trump said.

His lawsuit seeks $40 million in compensatory and punitive damages and a full accounting of what the developer did with the $32 million in down payments it collected from condo buyers. Trump has told associates in his organization that he wants to use the lawsuit as a mechanism to help buyers recover those down payments, according to a source familiar with the lawsuit.

"Defendants, as the developers of the project, were entrusted with ensuring that the project would be constructed and developed in accordance with the buyers' purchase contracts and in keeping with the high standards of luxury, quality, reliability and dependability associated, throughout the world, with the Trump name," the lawsuit said.

Concerns about the project surfaced in mid-2008 as buyers started to grumble about a lack of progress. In December, Irongate's subsidiary, PB Impulsores, disclosed in a letter to buyers that Trump did not invest in the project and had no role in managing it. The company said it had spent all of the deposits and was unable to secure additional financing to complete the job.

In a one-page accounting provided to buyers, the developer said it had spent $45.3 million and was out of money. The accounting said that $8.7 million went to advertising and marketing, $8.3 million to acquire the land, $6.9 million on architecture and engineering, $6.4 million on loan fees and $2.6 million on "site and building costs."

An attorney representing dozens of buyers in the lawsuit against Trump and Irongate said he hoped that Trump's efforts would make it easier for buyers to recover their down payments.

"We would welcome any and all efforts by anyone, including Donald Trump and his organization, to rightfully return the deposits that were made," said Bart I. Ring, one of the attorneys representing buyers.

"It doesn't matter where the money comes from. If Mr. Trump was able to do that, it would be good for everyone."

stuart.pfeifer@latimes.com

Bloomberg News was used in compiling this report.







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surfer jim - 4-11-2009 at 08:08 AM

A little math.....$8.7 advertising....and $2.6 building (or was that digging a hole?).....not a good balance for my money...

And why $6.4 in loan fees....they already had the money upfront from the investors?

And no mordida budget?.....what's up with that?:rolleyes:

DianaT - 4-11-2009 at 08:28 AM

Quote:
Originally posted by conquestkm
Donald Trump sues developer of Baja California condo project bearing his name

Email Picture
Don Bartletti / Los Angeles Times
A billboard advertises the site of Trump Ocean Resort Baja Mexico about 10 miles south of the border.
The tycoon accuses Irongate Wilshire's principals of failing to follow through on promises to build a five-star resort called Trump Ocean Resort Baja Mexico.
By Stuart Pfeifer
April 10, 2009
Real estate tycoon Donald Trump filed a lawsuit Thursday against a Los Angeles developer that paid to use his name for an oceanfront condominium project in Baja California but then failed to build it.

.......

Trump said in an interview Monday that he was unfairly targeted in the buyers' lawsuit. He said he played no role in managing the development and was unhappy with what happened.

........

His lawsuit seeks $40 million in compensatory and punitive damages and a full accounting of what the developer did with the $32 million in down payments it collected from condo buyers. Trump has told associates in his organization that he wants to use the lawsuit as a mechanism to help buyers recover those down payments, according to a source familiar with the lawsuit.

.......



Yes, of course Donald's purpose is to help the people get their downpayments back---the people who bought because of HIS name on the project. :rolleyes:

And gosh, now poor Donald is being unfairly targeted by the buyers. How terribly unfair of them, after all, he only licensed out his name.
:rolleyes::rolleyes::rolleyes:

I think it would be terribly unfair for poor Donald to have to pay back those downpayments to the people who bought because of his name---just not fair. :rolleyes::rolleyes:

What a JERK, JMHO

Diane

805gregg - 4-11-2009 at 08:37 AM

I don't know why anyone would buy because of his name, I keep reading how most of his projects go bankrupt.

Al G - 4-11-2009 at 08:45 AM

His lawsuit against the builder has nothing to do with returning the people's deposit...he is only after his cut of the haul!

Woooosh - 4-11-2009 at 10:32 AM

Where's the $millions in sales comissions?

Bajahowodd - 4-11-2009 at 12:31 PM

Actually what he's doing is trying to get insulated from the costs and possible damages he may incur from the lawsuits already filed against him by buyers. If actually has an iron-clad contract showing he is just licensing his name, he would ultimately be able to just pass through any judgments, and his own expenses.

LancairDriver - 4-11-2009 at 02:00 PM

Undoubtedly "The Donald" collected a healthy sum up front for the use of his "good name". If he has any integrity at all he will voluntarily distribute this sum amongst the investors and show some good faith. I'm sure he is very familiar with the other parties from prior dealings and could apply considerable leverage to get them to part with some assets also. 32 million evaporating with just a hole in the ground to show for it? I don't think so. All this legal maneuvering is just a smoke screen to buy time and let the whole thing fade into the sunset.

Bajahowodd - 4-11-2009 at 02:21 PM

there's also a billboard:tumble:

dao45 - 4-11-2009 at 02:50 PM

Donald "YOUR FIRED"

CaboRon - 4-12-2009 at 06:03 AM

Quote:
Originally posted by Bajahowodd
there's also a billboard:tumble:


Skipjack Joe - 4-12-2009 at 06:26 AM

These lawsuits have no chance of winning.

A developer has the right to adjust the price of homes as the economy changes. How can he do otherwise? It's unfair to the buyer but there is just a risk involved in this sort of purchase. This sort of thing is occuring all over the US now. I'm familiar with some in the Vegas area. You feel sorry for the buyer because he/she were probably misled by salesmen with all sorts of charts and projections about the value of the purchases. That's what salesmen do.

I wouldn't be surprised if Trump purchases this project at a fraction of the cost during this difficult time and goes on to add to his fortune. This is just the sort of crippled project that real estate investors look for.

Ford - 4-12-2009 at 04:52 PM

Good call Joe! That may be what he is doing....just postering for a position to buy out the project! May we should go to him with the idea? Can we make money too? Maybe he will just give us a top floor unit!