geobas
Banned
Posts: 27
Registered: 9-1-2002
Member Is Offline
|
|
Trouble for Donald Trump
| Quote: | Trouble for Donald Trump: The money for a condo project didn't come through
When investors gather at a downtown San Diego sales event in 2006, the Trump Ocean Resort was sold as a can't-miss opportunity: three 26-story towers
on the Pacific Ocean only 30 minutes south of San Diego in Baja California, with condos priced from the mid-$200,000s to more than $1 million. Steep,
but a bargain compared with comparable oceanfront real estate in the States.
Investing in Mexico sounded risky, given its crime rate, drug wars and weak property laws. But if Donald Trump was willing to put his name on a
project, some figured, it meant that it was legit. "I've invested with him lots of other places and made millions doing so," says Michael Mikelic, who
runs King Penguin Properties, a property management company with $30 million in assets. Mikelic bought a two-bedroom condo for $750,000. The project
sold 70% of the units in the first tower in one day, worth $122 million, bringing in $25 million in deposits. The second tower sold a third of its
units the first day it was on the market.
There's only one thing missing: buildings. There are only holes in the ground. Adam Fisher, a former principal of Irongate who led the project, says a
$150 million construction loan from German bank WestLB fell through this year, not long after the state-owned bank had to receive a $6.4 billion
bailout from the government to cover its losses on tanking subprime mortgages in the U.S. "We weren't speculating with other people's money," he says.
"If you went to a construction lender last year and said that you had a project that was 70% sold and had 30% nonrefundable deposits like ours, 99.9%
of the time you would get a loan."
The folks who laid down their deposits, however, are now planning on taking Trump's company and its partner, Irongate, a Los Angeles developer, to
court in a breach-of-contract action. They say that they were promised that their building would be completed by last spring. They say they haven't
heard from the Trump Organization or Irongate in months. Mikelic says that he wants his $225,000 deposit back, now sitting in a non-interest-bearing
escrow account.
The Trump Organization referred questions to Irongate. Irongate won't say whether Trump put money into the project or just licensed his name. In
October 2007 Trump was scoffing at the notion that the real estate slowdown could affect him. "Though it may be true that some of Baja's developments
could see a slowdown, these market conditions simply do not apply to Trump Ocean Resort," daughter Ivanka Trump wrote in a newsletter sent to
investors.
Trump has seen other early investors try to get out of their contracts as well, though it's hard to say if they are just running scared of the housing
bust. In a suit in Miami, for example, 132 buyers want to cancel $146 million in contracts because they claim that a condo project, called the Trump
Towers, was misrepresented as a Trump investment. The developers say the case is without merit. |
http://www.forbes.com/forbes/2008/1117/034a.html
|
|
|
toneart
Ultra Nomad
Posts: 4901
Registered: 7-23-2006
Member Is Offline
Mood: Skeptical
|
|
In which country are the escrow funds held?
|
|
|
woody with a view
PITA Nomad
Posts: 15939
Registered: 11-8-2004
Location: Looking at the Coronado Islands
Member Is Offline
Mood: Everchangin'
|
|
the SD Union tribune perspective
http://www.signonsandiego.com/news/mexico/tijuana/20081101-9...
Financing gone for Trump-named Baja towers
By Leslie Berestein
UNION-TRIBUNE STAFF WRITER
November 1, 2008
The developers of the Trump Ocean Resort in Baja California have lost their financing for the project, and it's unlikely a new lender will be secured
until the economy halts its downhill slide.
PB Impulsores
The Trump name was a selling point for buyers who put 30 percent down on units that ranged in price from studios in the mid-$300,000s to $2.5 million
for a penthouse.
The planned three-tower, 526-unit condo-hotel project 10 miles from the international border, announced with great fanfare in 2006, has yet to be
built. Initially, the first of the oceanfront towers was projected to be ready for occupancy by late this year.
A principal shareholder in the company developing the project said yesterday that there are still plans to complete the towers. However, after a
construction loan of roughly $150 million from a German bank fell through in late summer, a new lender has yet to be found.
“I don't need to describe the current state of the financial market,” said Adam Fisher, formerly senior managing director of Los Angeles-based
developer Irongate, a partner in the project. “The reality of this particular project is that it needs construction financing in order to be
completed. In a normal, or even a sub-normal financial market, it would be easily financed. But we are not even in a bad environment. We are in a
depression-type environment.”
He said it's unlikely any new financing will come through “until the financial markets heal themselves.”
Fisher, who left Irongate last year, is a principal shareholder in PB Impulsores, a Mexican company that he said owns the property and is developing
it with Irongate. The Mexican company's name appears next to the copyright for the Trump Ocean Resort's Web site.
While the project bears megadeveloper Donald Trump's name, the Trump Organization is merely a licensor, said Rhona Graff, Trump's assistant, and is
not involved directly in developing the project.
But the Trump brand name was a selling point for many of those who invested in units, people who are becoming increasingly frustrated after having
plunked 30 percent down on units that ranged in price from studios in the mid-$300,000s to $2.5 million for a penthouse.
“It kind of feels like we have been set up,” said Hamed Hoshyarsar, 30, an accountant from the Los Angeles area who raised $165,000 in cash with his
brother and two friends as a down payment for a vacation unit to share.
“With a name like Trump, we figured it was good,” he said. “There were other developments that we could have paid a quarter of that for, but we
figured with Trump, you can't go wrong.”
Hoshyarsar said he has called sales agents for the towers and been told the completion date is now slated for 2012. At this point, he said, he just
wants his money back.
“They have our money, and we were told it is supposed to be in escrow,” said Joe Pannarale, a financial adviser in Chicago who put 30 percent down –
around $110,000 – on an 11th-floor unit in the second tower, referred to as the Spa Tower. “Then we find out it is not in escrow anymore. They say the
developers have it.”
Fisher said it was made clear to buyers that the development company was going to use their money to develop the project, and that according to that
plan, it has been spent preparing the site and laying groundwork for the towers.
“There actually has been a lot of work done on the project, foundation work, site work,” Fisher said. “That money has been put into the project. When
we get a construction loan, that is that much less money that needs to be spent.”
Fisher said he is optimistic that the project eventually will be financed and completed once the economy improves. But some of those who put money
down are not holding their breath.
Hoshyarsar has been organizing other buyers in hopes of filing a class-action lawsuit for breach of contract, and is scheduling meetings with
attorneys.
“It's a hole,” he said, referring to the construction site. “Fill it up with water and I'll go swimming in it. . . . I want to get another place that
we can actually use.”
|
|
|
Woooosh
Banned
Posts: 5240
Registered: 1-28-2007
Location: Rosarito Beach
Member Is Offline
Mood: Luminescent Waves at Rosarito Beach
|
|
Well- we all saw this coming for years. There is only a pile of dirt on the site- no foundaton work as claimed. But how can you steal all the money
from an "escrow fund" if you really haven't done any work and used the money to pay the sales staff for two years? You claim you have done enough work
to gobble up those advance deposits. No word if Ivanka is backing out of her penthouse purchase in the Spa Tower too... lol
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
|
|
|
The Gull
Super Nomad
Posts: 2223
Registered: 8-28-2003
Location: Rancho Descanso, BCN
Member Is Offline
Mood: High
|
|
| Quote: | Originally posted by woody in ob
There actually has been a lot of work done on the project, foundation work, site work,” Fisher said. “That money has been put into the project. When
we get a construction loan, that is that much less money that needs to be spent.”
|
Road apples. They pushed dirt into huge hills, then pushed it to another part of the site, then to another, then to another...no foundation or prep
has been accomplished.
Why didn't the union-trib report about all the slain drug creeps who are buried on the site and part of the hill? Maybe there are some American
visitors in the pile? Real journalists would have gone below the surface of this story and discovered that The Donald is an illegal alien, drug lord.
�I won\'t insult your intelligence by suggesting that you really believe what you just said.� William F. Buckley, Jr.
|
|
|
tjBill
Senior Nomad
Posts: 516
Registered: 10-6-2007
Location: Tijuana
Member Is Offline
|
|
Wow, one of the biggest disasters in Baja. Planning to build it near a sewage facility does not help.
|
|
|
Woooosh
Banned
Posts: 5240
Registered: 1-28-2007
Location: Rosarito Beach
Member Is Offline
Mood: Luminescent Waves at Rosarito Beach
|
|
They never got as far as pulling building permits the site was such a disaster. All the sewage and wastewater from the project would have had to been
pumped a few hundred feet uphill to the treatment ponds across the cuota. There were plenty of better sites for the project in the area- that was
their first mistake.
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
|
|
|
Dave
Elite Nomad
Posts: 6005
Registered: 11-5-2002
Member Is Offline
|
|
Trouble for Donald Trump?
Cupboards bare?
Does he need a loan?
|
|
|
MrBillM
Platinum Nomad
Posts: 21656
Registered: 8-20-2003
Location: Out and About
Member Is Offline
Mood: It's a Zip-a-Dee-Doo-Dah Day
|
|
Trumped
I doubt that Trump is going to feel anything. It sounds like he got his money from lending his name and he'll come out fine just as he always has.
There's nobody to feel sorry for here. The investors took a chance looking for Gold and went bust. Tough.
|
|
|
BajaGringo
Ultra Nomad
Posts: 3922
Registered: 8-24-2006
Location: La Chorera
Member Is Offline
Mood: Let's have a BBQ!
|
|
I read somewhere on line that there are a couple of projects with Trump's name on them going belly up. Eventually that has to devalue his worth for
future projects...
|
|
|
BMG
Super Nomad
Posts: 1776
Registered: 6-10-2007
Location: La Paz / Bahia Asunci�n / Away from home
Member Is Offline
|
|
| Quote: |
A large billboard bearing Trump's distinctive mane of hair still graces the abandoned-looking construction site.
|
Not just Baja though. Trump's Spire in Chicago is also having a few problems.
| Quote: |
Trump has until tomorrow to reach an agreement to extend the loan, originated and syndicated by Deutsche Bank AG, the Wall Street Journal reported
Oct. 29. Trump's 401 North Wabash Venture LLC, the owner of the Chicago project, took out a $640 million construction loan in 2005 from a unit of
Deutsche Bank, documents filed with the Cook County Recorder of Deeds show. Trump's company also took out a short-term loan of $130 million from
Fortress Credit Corp., a subsidiary of Fortress Investment Group LLC, the New-York based private equity and hedge fund manager.
|
I think the world is run by C- students.
|
|
|
tjBill
Senior Nomad
Posts: 516
Registered: 10-6-2007
Location: Tijuana
Member Is Offline
|
|
I think Trump's fortune is quite secure. He has a guide on protecting your assets from creditors.
http://www.amazon.com/Trump-University-Asset-Protection-101/...
|
|
|
Bronco
Nomad
Posts: 168
Registered: 12-1-2007
Member Is Offline
|
|
Trumps Dump
Poor ol'Donald is PO'ed at Forbes. Donny claims he is worth 10 billion and Forbes says it's more like 3 billion. One would think this pompous,
arrogant, loud mouth would just loan the developer the 150 mil to save face, this is chump change to Donny. Imagine the speculators that think Donny
really gives a rat’s patootie about their well being. I hope they sue his butt for all the deposits + interest. I have to admit that his smug mug is
no longer on a billboard at the linea which really makes the wait more pleasant. I wonder how soon the drive down the coast will benefit from the
removal of his other smirk mug blocking the view of a beautiful ocean.
|
|
|
Woooosh
Banned
Posts: 5240
Registered: 1-28-2007
Location: Rosarito Beach
Member Is Offline
Mood: Luminescent Waves at Rosarito Beach
|
|
His 2 Billion dollar golf course project in Scotland was approved today.
http://uk.reuters.com/article/environmentNews/idUKTRE4A23EJ2...
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
|
|
|
![[*]](images/xmbforum/default_icon.gif){kind=icon}
