bajabound2005
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Slow going for Trump resort
Slow going for Trump resort
Two years after a high-profile sales event, Baja project stuck in red tape, slow market
By Sandra Dibble
UNION-TRIBUNE STAFF WRITER
January 17, 2008
TIJUANA – Donald Trump's decision to lend his name to a lavish coastal condo-hotel project in Baja California brought worldwide visibility to the
region's unprecedented building boom.
But two years after a San Diego sales event that drew hundreds of would-be purchasers, the planned three-tower Trump Ocean Resort has yet to break
ground and development has slowed along the Tijuana-Ensenada strip known as the Gold Coast.
A 10-mile drive from the border, a half-dozen workers poured concrete into a trench yesterday. Orange fencing surrounded a large deep hole. A
wind-tattered billboard displaying a giant photograph of Trump rose over the 17-acre site overlooking the Coronado Islands.
Tijuana officials say the developer received a land use permit in 2005, allowing 526 units to be built on the property that juts out into the Pacific
Ocean at Punta Bandera. But the developer has yet to receive a construction permit from Tijuana's Urban Development Department, the key city agency
that gives the go-ahead for new projects.
“Going through the files, we can't find an application,” said director Miguel Angel Zavala.
Trump's Los Angeles-based partner, Irongate, said the much-publicized project is moving forward, despite delays, and that they are in the final stages
of presenting documents to City Hall. Tijuana's Municipal Planning Institute, which conducts initial reviews and submits recommendations to the Urban
Development Department, received plans earlier this month, the developer said.
So far, U.S. buyers make up more than 90 percent of the project's clientele, said Carlos Palafox, director of development for Irongate. To date, 167
units have been pre-sold in the first tower, which will have 232 units on 26 stories and is scheduled to open at the end of 2009, about six months
behind initial projections, Palafox said.
About 40 percent of the space has been spoken for in the second 26-story tower.
Buyers who sign a contract agree to put down 30 percent of their unit's cost over a specified time period, Palafox said.
Trump said in an October 2006 interview that the Trump Organization will be a “significant” equity investor in the $200 million project. But Palafox
said Trump has yet to invest in Trump Ocean Resort in Baja. Palafox described Trump as a “branding partner,” meaning that he has lent his name.
“The only thing I am at liberty to say now is that we are working with Irongate on a project there,” Rhona Graff, Trump's executive assistant, wrote
in response to a written query.
Palafox said Trump's participation is significant for the project, as “Trump has become a highly recognized brand,” Palafox said. “With branding comes
a very serious partnership. Trump has to protect their quality standards.”
Trump, a celebrity real estate developer known for his TV show “The Apprentice,” has found success in becoming the public face for many developments
that carry his name but not his investments.
Like other developments along the Tijuana-Ensenada coastline, Trump Ocean Resort has suffered from the U.S. real estate downturn, as fewer buyers have
the equity to purchase second homes in Mexico.
“I think that all U.S. projects that target U.S. buyers have been significantly impacted by the U.S. housing markets,” Palafox said. Another factor
accounting for the delay has been finding banks willing to lend the capital for the project, Palafox said, as “almost all U.S. and European banks are
going through a much stricter authorization and underwriting process.”
Palafox said the financing agreements are confidential.
Construction on the first tower is set to start in March and the second tower in July.
Palafox said that work has been going on: Workers have been grading the land and installing utilities. “The reason it's not visible is that it's all
underground.”
Just two years ago, a booming U.S. housing market was a key factor fueling a frenzy of purchases along northern Baja California's coastline. The
chance to own oceanfront property at a fraction of U.S. prices lured many baby boomers to take equity from their U.S. homes to invest in Mexico.
But with the downturn in the U.S. market, Baja California's coastal real estate sales have fallen. Rafael Liceaga, a well-known Baja California real
estate broker, said sales have fallen about 40 percent to 50 percent since the height of the boom but remain above pre-boom levels.
“There continues to be much movement, many transactions,” said Eduardo Rosales, president of the Rosarito Beach branch of AMPI, a national realty
agents group.
Despite recent setbacks, “the location is strategic,” said Rosales. “People are investing and are going to continue to invest.”
But now a new market is developing, as buyers have begun scouting for foreclosure properties and “properties that people are trying to sell ASAP,”
said Gustavo Torres, a broker in the Rosarito Beach area and vice president of the local AMPI branch.
At Trump Ocean Resort, “we have not reduced prices at all. Our sales have had a slowdown, but we are still selling,” Palafox said. Prices now range
from the mid-$300,000s for a studio on the lower floor to $2.5 million for a penthouse.
A saleswoman said amenities will include four infinity-edge pools, tennis courts, a full-service day spa, five-star restaurants, bars and convention
space.
Tom Pfleider, an Inland Empire entrepreneur, purchased a one-bedroom unit in the first tower during Trump's 2006 San Diego sales event.
“We relied a lot on Trump's name and the fact that he was doing due diligence,” Pfleider said. “We remain excited and expect it to be a first-class
property.”
Staff writer Lori Weisberg contributed to this report.
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Sandra Dibble: (619) 293-1716; sandra.dibble@uniontrib.com
Friends don't let friends drink white zinfandel.
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bajadock
Super Nomad
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I recall an email invitation from T-rump for a "pre-whatever" event at a spiffy San Diego hotel in late '06. Missed out on that glam event to
purchase 10 or 12 units. Preferred Hash House a Go Go, which does have Pabst Blue Ribbon.
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Woooosh
Banned
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Location: Rosarito Beach
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A lot of tough talk and lame excuses from a developer nearly two years behind. Seems strange they can say they "sold out" the project last year and
still have 30% of the units available for sale in the first tower. It seems even stranger that they could even sell the units and take the deposits
without having any approved plans or having even applied for them. And just how did they manage to do all the underground work with any approved
construction plans?
There's a deeper problem with this project I sense- and not just the 3 million gallons of partially treated sewage water that dumps into the Trump
location every day from TJ. Ok- in truth is is not at the exact location, but 50 meters north. It'll still make the beach unusable there.
Like the article says, Trump just lent his brand name to the project, but I missed that disclaimer. And when they said Ivanka Trump herself bought one
of the penthouses it implied more than a "branding" relationship.
And yes- Hash House A GO GO is THE place for breakfast in San Diego, although I've never had a Pabst Blue Ribbon with my banana pancakes... yet
[Edited on 1-17-2008 by Woooosh]
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Bronco
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Registered: 12-1-2007
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I find the "Trump Sump" another bogus example of the Rosarito real estate
"boom" being perpetuated by the usual crowd. The Torres, Gabriel Robles group of questionable individuals that prey on the uninformed gringo.
The attached link from the Wall Street Journal is a very good example of a sorry gringo who is purported to have bought into the Trump project. From
what I see this guy needs some good financial advise.
http://www.realestatejournal.com/secondhomes/20071217-fletch...
Earlier this year, Geoff Folsom, a Thousand Oaks, Calif., businessman, bought a 4,500-square-foot oceanfront penthouse, with its own private swimming
pool, in Trump's Ocean Resort in Playas de Tijuana, Mexico, a 30-minute drive from San Diego, Calif. He paid $3 million for the property, about half
the cost of similar resort units he looked at in the States. Property taxes and maintenance costs are lower than in the U.S., too.
All I see in driving by is a ditch with what could be the sewage pipes headed for the ocean.
Mr. Folsom, call home?
Bronco
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Von
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Registered: 10-1-2006
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Mood: getting ready!
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Boom Boom Mami Mami estaba biena buena "La idea" Mr Trump"etas"    
[Edited on 1-18-2008 by Von]
[Edited on 1-18-2008 by Von]
READY SET.....................
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bigmike
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Trump will pull out and still come out smelling like a Rose "Unfortunately"
Will never be built!!
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The Gull
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Donald...You're Fired.
�I won\'t insult your intelligence by suggesting that you really believe what you just said.� William F. Buckley, Jr.
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