Friday, December 04, 2015

Hundreds Who Spent Ten$ Of Thousand$ Buying Into The Trump Brand In Fort Lauderdale Luxury Beachfront Condo Left Holding The Bag After Real Estate Mogul Removes Name From Project

Foreign Policy magazine reports:
  • On Nov. 5, 2013, surrounded by a crowd of attorneys, court officials, and four would-be condo buyers, Donald Trump sat down in a conference room in his flagship Fifth Avenue building and began to tell his version of a real estate deal gone awry.

    Trump had licensed his name to a luxury condominium project in Fort Lauderdale, Florida, but the building was never completed and those who had put down deposits, ranging from $85,000 to $500,000, wanted their money back. More than 100 of them would file suit, with the largest group — which swelled to 81 people as it neared trial — suing for $7.8 million. By the time Trump sat down for his deposition, the other defendants in the lawsuits, those who were the actual owners of the building, had settled for undisclosed terms. Trump, who hadn’t invested his own money in the project or overseen any of the construction, fought on. He was fighting for the Trump brand.

    “I’m in a unique position,” Trump testified when asked about licensing his name to buildings he didn’t own or develop himself. “I built up a great name, and the name is something that people like, and it has been very successful.”

    But the name alone was not enough in the case of the Trump International Hotel and Tower, Fort Lauderdale, a 24-story, 298-room beachfront property designed by architect Michael Graves, known for buildings like the Denver Public Library, as well as the line of consumer products he designed for retailers like Target and J.C. Penney.

    No one disputed that the project had ended in failure, with the luxury building never even completed. Plagued by delays in financing, construction, and budgeting, it was ultimately sold in a foreclosure auction for $115 million, far less than the $200 million it cost to build. Would-be buyers didn’t get their money back. Trump’s name, the primary reason many of them had put down deposits in the first place, was removed from the project.

    As a presidential candidate, Trump stresses his track record as a winner. Based on his experience, he says, he’ll pick the best people for his cabinet and put the best people in place to solve foreign crises. He says he doesn’t disappoint people. But a condo deal that was a huge disappointment to hundreds of people who wanted to buy into the Trump brand raises questions about the people Trump picks — and the way he wins.
For more, see Teflon Don: How Trump Survived a Real Estate Deal Gone Bad (His investors lost money. A judge said he broke the rules. So how did the GOP front-runner come through a blizzard of lawsuits unscathed?).

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