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How Donald Trump cashes in even when his name-brand properties fail
Executive summary: he uses other people's money.
How Donald Trump cashes in even when his name-brand properties fail
Politics
By Tom Hamburger and Rosalind S. Helderman July 23 at 6:29 PM
The Trump International Golf Club in Puerto Rico boasts lush tropical grandeur, breathtaking ocean views and a PGA-caliber course offering players an “incomparable touch of Trump.”
But in recent years the resort has struggled, taking on tens of millions of dollars in debt. Last week, it filed for bankruptcy. The failure threatens to cost the island’s taxpayers, as the project was financed with millions in government-backed bonds. Its 90 or so employees face an uncertain future. ... Yet for Donald Trump, the deal was a total winner. ... He put no money down but took a cut of the annual revenue — mostly for allowing the resort to bear his name.
“We made many millions of dollars on it but never invested a dime,” said Trump’s son Eric, an executive in the Trump Organization.
As he seeks the Republican presidential nomination, Trump is promoting his success as a real estate mogul to argue that he has the proven skills to fix the nation’s problems. He brags that he made his money “the old-fashioned way,” building iconic properties such as Trump Tower in Manhattan and, soon, a luxury hotel in the Old Post Office Pavilion blocks from the White House. In vowing to put a “great wall” on the U.S.-Mexico border, Trump says, “Nobody builds walls better than me.” ... But as the Puerto Rico example illustrates, Trump has become increasingly reliant on a different business model — one in which he makes money by harnessing his celebrity brand rather than risking capital in real estate investments.
By Tom Hamburger and Rosalind S. Helderman July 23 at 6:29 PM
The Trump International Golf Club in Puerto Rico boasts lush tropical grandeur, breathtaking ocean views and a PGA-caliber course offering players an “incomparable touch of Trump.”
But in recent years the resort has struggled, taking on tens of millions of dollars in debt. Last week, it filed for bankruptcy. The failure threatens to cost the island’s taxpayers, as the project was financed with millions in government-backed bonds. Its 90 or so employees face an uncertain future. ... Yet for Donald Trump, the deal was a total winner. ... He put no money down but took a cut of the annual revenue — mostly for allowing the resort to bear his name.
“We made many millions of dollars on it but never invested a dime,” said Trump’s son Eric, an executive in the Trump Organization.
As he seeks the Republican presidential nomination, Trump is promoting his success as a real estate mogul to argue that he has the proven skills to fix the nation’s problems. He brags that he made his money “the old-fashioned way,” building iconic properties such as Trump Tower in Manhattan and, soon, a luxury hotel in the Old Post Office Pavilion blocks from the White House. In vowing to put a “great wall” on the U.S.-Mexico border, Trump says, “Nobody builds walls better than me.” ... But as the Puerto Rico example illustrates, Trump has become increasingly reliant on a different business model — one in which he makes money by harnessing his celebrity brand rather than risking capital in real estate investments.
One wonders what the fine print says in his contract to rehab DC's old Post Office.
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