Trump’s Businesses Face $400 Million Debt Deadlines Amid Economic Slowdown
The Trump Organization could see tougher terms on loans or have to sell assets to raise cash. Trump’s Businesses Face $400 Million Debt Deadlines Amid Economic Slowdown
The Trump Organization faces the prospect of paying more to borrow, getting smaller loans or selling some of its assets to manage more than $400 million of debt coming due on properties hit hard by the economic downturn.
The organization’s financial situation could become more challenging if President Trump wins re-election because of the complications, ethical quandaries and political dynamic of lending to a sitting president, according to real-estate finance executives and a lawyer who handled presidential ethics.
The Trump Organization isn’t carrying a particularly heavy debt load relative to its generally high-quality assets, and it has generated significant cash from its properties and asset sales. But the market for commercial real-estate loans is struggling.
“There’s still financing available, particularly for the right deals, but it’s definitely a more challenging environment,” said Steven Buchwald, managing director at Mission Capital Advisors, a New York-based company that helps arrange financing for commercial real-estate deals. He hasn’t worked with the Trump Organization.
Mr. Trump’s debt deals are likely to face more scrutiny from his political opponents if he wins a second term. Democrats have said that the debts could affect the way Mr. Trump governs. They raised the issue of the president’s finances after the New York Times reported on his tax returns and his personal guarantees of the debts he owed.
“Do you owe anybody money who is impacted by any decision you make as president of the United States?” asked California Sen. Kamala Harris, the running mate of former Vice President Joe Biden, in a television interview last week. “We need to know that.”
House Speaker Nancy Pelosi has called Trump Organization debts a national-security question.
The Trump Organization has previously rejected such concerns because it says Mr. Trump hasn’t been involved in its decision-making while he has served as president. Mr. Trump personally owns nearly all of the assets in his organization.
The president disputed the New York Times report but has repeatedly declined to release specifics about his taxes.
Few financial institutions were willing to do business with Mr. Trump before he was elected because of his turbulent financial history. Two that did, German lender Deutsche Bank AG and real-estate finance firm Ladder Capital Corp. , have both struggled recently, making it harder for them to lend.
Another challenge comes from the Trump Organization’s assets. Its office buildings are concentrated in Manhattan, which has been hit hard by the pandemic and is struggling to recover. Its golf courses and hotels have suffered from reduced travel, coronavirus restrictions and a slowing economy.
On the campaign trail, Mr. Trump has all but written off the city’s future. “I look at New York, it’s so sad what’s happening in New York,“ Mr. Trump said in last week’s presidential debate. “It’s almost like a ghost town, and I’m not sure it can ever recover.”
One of the first debts coming due is on the president’s signature property, Trump Tower, which has a $100 million loan that matures in September 2022. That loan was made by Ladder Capital, which sold it to investors in the form of commercial mortgage-backed securities.
Other loans coming due for Mr. Trump are tied to his other major businesses, hotels and golf courses, which have also been hit by the pandemic. Deutsche Bank lent $125 million for his Trump National Doral Miami golf resort, due in 2023, and as much as $170 million, due in 2024, for the Trump International Hotel in Washington.
Mr. Trump’s ownership of his business while president has long been criticized by ethics experts, who say he could make decisions in office that could benefit himself. A specific concern with future refinancings is that lenders could have ulterior motives if Mr. Trump is still in the White House, said Richard Painter, the chief White House ethics lawyer under President George W. Bush.
“The only people who will put money into refinancing the Trump debt will be people who don’t really care about the money,” said Mr. Painter, a Trump critic. Rather it will be “because they want something else from Donald Trump.”
The Trump Organization has said it works hard to avoid such conflicts of interest, such as by donating profits it receives from foreign governments to the U.S. Treasury.
The Trump Organization has said it isn’t worried about the debt load. Eric Trump, who has been handling the company’s day-to-day operations while his father is in the White House, said in an interview this summer that managing its debt levels has been a key focus.
“We will never be a company that carries a large debt burden,” Eric Trump said.
The Trumps have raised tens of millions of dollars through asset sales in recent years that have included selling land the organization owned in the Dominican Republic as well as its stake in a New York City housing complex, among other transactions.
A review of loan data shows several high-profile Trump properties have underperformed expectations since the 10-year loans were issued to the company and securitized before Mr. Trump became president.
In 2012, for instance, Ladder Capital lent $100 million to refinance Trump Tower and allow Mr. Trump to pocket $68 million of the proceeds, according to a loan disclosure. Ladder Capital assumed Trump Tower’s commercial spaces would bring in net cash flows of $19.6 million a year.
The net cash flow has fallen short of that expectation throughout Mr. Trump’s presidency, according to commercial-loan tracker Trepp LLC. This year, the commercial spaces are on track to deliver only around $12 million of net cash flows, according to Trepp data, with occupancy rates having fallen to 82% from nearly 100% when Ladder originated the loan.
In an interview Wednesday, Eric Trump said he was pleased with Trump Tower’s performance. “We’ve leased close to 30,000 square feet of space in the last nine months,” he said. “Trump Tower has never been better. It’s a phenomenal building.”
The president’s office tower in the financial district, 40 Wall Street, and retail space at the Trump International Hotel and Tower near Columbus Circle are also bringing in less cash than what Ladder expected when it originated those loans, Trepp data show.
Since properties’ incomes are the main determinant of how big of a loan a borrower can get, any material decrease in income could translate into tens of millions of dollars in decreased borrowing capacity, potentially forcing the Trump Organization to take on less debt and put in more equity.
Mr. Trump’s loans are already scattered across a variety of Wall Street investors, including dozens of mutual funds run by big money managers such as Fidelity Investments, Vanguard Group, Neuberger Berman Group and TIAA, Morningstar Inc. data shows. Those investors and others own pieces of six bond deals that include Mr. Trump’s loans, including Trump Tower, which makes up 11% of one of the deals.
A spokesman for Vanguard said the company’s exposure to these commercial-mortgage backed securities is small relative to its overall bondholdings. Spokespeople for TIAA, Fidelity and Neuberger Berman declined to comment.
Investors in such offerings usually get paid back once borrowers refinance their debts, which get placed in bond deals sold to new investors. But that market has slumped this year, with only about $52 billion of new issuance thus far, versus about $120 billion all of last year, according to Trepp.
The collapse in real-estate valuations hurt lenders such as Ladder. This spring, the firm got hit with margin calls, which force a borrower to put up more cash to offset the fall in value of its assets. It has since been decreasing its use of short-term borrowings while selling loans and securities to raise cash, according to an earnings call transcript and news releases. CEO Brian Harris said on a July earnings call that the company is bracing for “a rather severe recession that will last for about a year.”
Beyond the bond market, Deutsche Bank is Mr. Trump’s other big lender, with large loans outstanding on the Trump International Hotel in Washington and the Trump National Doral Miami golf resort.
While it is too early to know whether Deutsche Bank would roll over the Doral debt, the bank notably declined a request in 2016 by Mr. Trump—a presidential candidate at the time—to increase its loan for the property, according to people familiar with the matter. The bank’s risk committee and senior management were concerned about increasing its exposure to Mr. Trump at that time, The Wall Street Journal previously reported.
The bank has faced substantial regulatory challenges with U.S. authorities, including a $150 million fine in July for failing to properly monitor its dealings with late financier and convicted sex offender Jeffrey Epstein. It has also faced scrutiny over its money-laundering controls.
Trump Organization officials held informal talks with the German lender last spring about potentially easing or delaying loan payments as the coronavirus pandemic took hold. People familiar with the matter say nothing came of those discussions.
Trump Engineered A Sudden Windfall In 2016 As Campaign Funds Dwindled
Donald J. Trump needed money.
His “self-funded” presidential campaign was short on funds, and he was struggling to win over leery Republican donors. His golf courses and the hotel he would soon open in the Old Post Office in Washington were eating away at what cash he had left on hand, his tax records show.
And in early 2016, Deutsche Bank, the last big lender still doing business with him, unexpectedly turned down his request for a loan. The funds, Trump had told his bankers, would help shore up his Turnberry golf resort in Scotland. Some bankers feared the money would instead be diverted to his campaign.
That January, Trump sold a lot of stock — $11.1 million worth. He sold another $11.8 million worth in February, and $7.5 million in March. In April, he sold $8.1 million more.
And the president’s long-hidden tax records, obtained by The New York Times, also reveal this: how he engineered a sudden financial windfall — more than $21 million in what experts describe as highly unusual one-off payments from the Las Vegas hotel he owns with his friend Phil Ruffin, the casino mogul.
In previous articles on the tax records, the Times has reported that, in all but a few years since 2000, chronic business losses and aggressive accounting strategies have allowed Trump to largely avoid paying federal income taxes. And while the hundreds of millions of dollars earned from “The Apprentice” and his attendant celebrity rescued his business career, those riches, together with the marketing power of the Trump brand, were ebbing when he announced his 2016 presidential run.
The new findings, part of the Times’ continuing investigation, cast light on Trump’s financial maneuverings in that time of fiscal turmoil and unlikely political victory.
Indeed, they may offer a hint to one of the enduring mysteries of his campaign: In its waning days, as his own giving had slowed to a trickle, Trump contributed $10 million, leaving many people wondering where the burst of cash had come from.
The tax records, by their nature, do not specify whether the more than $21 million in payments from the Trump-Ruffin hotel helped prop up Trump’s campaign, his businesses or both. But they do show how the cash flowed, in a chain of transactions, to several Trump-controlled companies and then directly to Trump himself.
The bulk of the money went through a company called Trump Las Vegas Sales and Marketing that had little previous income, no clear business purpose and no employees. The Trump-Ruffin joint venture wrote it all off as a business expense.
Experts in tax and campaign finance law consulted by the Times said that while more information was needed to assess the legitimacy of the payments, they could be legally problematic.
“Why all of a sudden does this company have more than $20 million in fees that haven’t been there before?” said Daniel Shaviro, a professor of taxation at the New York University School of Law. “And all of this money is going to a man who just happens to be running for president and might not have a lot of cash on hand?”
Unless the payments were for actual business expenses, he said, claiming a tax deduction for them would be illegal. If they were not legitimate and were also used to fund Trump’s presidential run, they could be considered illegal campaign contributions.
In response to questions about the Times’ findings, a White House spokesman, Judd Deere, referred to this article as “yet another politically motivated hit piece inaccurately smearing a standard business deal.” He added that “during his years as a successful businessman, Donald Trump was longtime partners with Phil Ruffin and earned whatever payments he received.”
A spokeswoman for Ruffin, Jennifer Renzelman, said Ruffin was not involved in the day-to-day operations of the hotel, adding that “all tax statements go to the people who work on his taxes.”
It is fair to say that, over the years, Ruffin has been very generous to his friend. When Trump took the Miss Universe pageant to Moscow in 2013, the two men flew over together on Ruffin’s private jet. He would contribute more than $2.5 million to Trump’s campaign, his ill-starred foundation and his inaugural.
And after the inauguration, Ruffin would ask for a favor. Would the president help revive a dormant project of great importance to a lot of powerful people in Las Vegas — a bullet train that would whisk gamblers from Southern California to The Strip in less than 90 minutes?
Four years earlier, Barack Obama’s administration had considered, but ultimately decided against, a $5.5 billion loan for the train. Trump loved the idea, Ruffin told Forbes in a 2017 interview.
“Obama wouldn’t approve it, but maybe Donald will,” Ruffin said.
What Trump did after that is not clear. But around Las Vegas, word of the president’s interest was gratefully received. “Anybody having the president’s ear genuinely — not just to have a meeting and have it fall into an empty basket that is 12 miles deep — I am all in favor of it,” the Las Vegas mayor, Carolyn Goodman, said in an interview.
This past March, a panel composed largely of Trump appointees gave the train company permission to sell $1 billion in tax-free bonds to private investors. Authorities in California and Nevada fell in line, approving additional bonds. Trains could begin running as soon as 2024.
Among the train’s chief beneficiaries will be Ruffin and the other grandees of gambling who became a vital font of political money for Trump when he needed it most.
A Friend of The President
In business, Ruffin was a kindred spirit: a wealthy transplant to Las Vegas from Kansas. In politics, he would be crucial cheerleader.
Ruffin’s patronage of the president has been less lavish, and less examined, than that of his Las Vegas compatriot Sheldon Adelson. But he has long been a wingman for Trump’s political ambitions — urging him to run, burnishing his image and promising financial support.
In July 2016, he took the podium at the Republican National Convention in Cleveland to sing the nominee’s praises.
“Donald’s word is his bond. If Donald tells you something, you can put it in the bank,” he said. “I love the man.”
Ruffin loved the man so much that when Trump was considering a White House run back in 2011, he donated the venue for a Las Vegas rally: a ballroom at his Treasure Island Hotel and Casino. After Trump decided that he would indeed run, in 2015, it was at another Treasure Island rally that Ruffin expounded on his friend’s charitable good works.
“You won’t hear this in the media, but Donald gave $20 million to the St. Jude children’s home,” he said. “He could have used that $20 million for television ads, but he decided to give it to the children of cancer.”
The Washington Post later reported that it had found no evidence of any such donation. More definitively, there is no mention of it in Trump’s tax records.
Also in 2015, Ruffin gave $1 million in seed money to the Make America Great Again super political action committee, only to have it refunded when the group was dissolved after news reports that it had improperly coordinated with the Trump campaign.
The two men had been brought together in the early 2000s by Ruffin’s belief that his business needed some Trump-branded glitter. Trump, whose Atlantic City casinos were flailing, was looking to expand to Las Vegas. The result, built on the former site of a mall parking lot: a “64-story tower of golden glass” that “soars above The Strip,” according to the hotel website.
Plus, a friendship between men from very different places but with parallel trajectories: Trump to boldface-name Manhattan from “outer borough” New York; Ruffin to Las Vegas from Wichita, Kansas, where he had become wealthy as a pioneer in self-service gas stations and as owner of the world’s largest manufacturer of hand trucks.
It was Trump who introduced Ruffin, now 85, to his third wife: Oleksandra Nikolayenko, like Melania Trump a much younger former model from a former Soviet-bloc country — in Nikolayenko’s case, Ukraine, which she represented at the Miss Universe pageant in 2004. The couple were married in 2008 at Mar-a-Lago, Trump’s private club in Palm Beach, Florida, with him as best man. The men’s wives are quite close, Ruffin has said, “like peas in a pod.”
When he flew Donald Trump to Moscow for the 2013 edition of Miss Universe, Ruffin also became a bit player in an episode that would, over time, spawn some intrigue and much speculation.
Investigations into Kremlin interference in the 2016 election would detail how the president’s Russian partners in the pageant wooed him and then helped broker the meeting where Donald Trump Jr. hoped to get “dirt” on Hillary Clinton.
The partners’ willingness to underwrite the entire pageant made it Donald Trump’s most profitable Miss Universe. His personal payday, according to his tax records, was $2.3 million.
A report from the Senate Intelligence Committee this August, looking extensively at the pageant, included a “Dear Phil” letter sent by Trump days after the event.
“It was great spending time with you in Moscow and making the rounds of the city in the hopes of the purchase or development of a project,” Trump wrote, before concluding, “Let’s see how it all turns out — it is important that we make a good decision.”
Other People’s Money
The campaign was strapped for cash, and many big donors still weren’t sure about Trump. Then Las Vegas came around.
On the campaign trail, Trump frequently boasted that he was so rich he did not need other people’s money. As president, he promised, he would be beholden to no one.
“He’s driving me crazy,” Trump said of Ruffin at a February 2016 rally after winning the Nevada caucuses. “He said, ‘Donald, I want to put $10 million into your campaign.’ I said, ‘Phil, I don’t want your money. I don’t want to do it. I’m self-funding.’ Every time I see him, it’s hard for me to turn down money, because that’s not what I’ve done in my whole life. I grab and grab and grab.”
In fact, he needed Ruffin’s money, and then some.
Trump had promised to pour $100 million of his own money into the campaign, but after an early infusion of more than $35 million in 2015 and early 2016, the flow eventually slowed to a steady $2 million or so near the end of each month.
What was at first described as a series of loans became a donation amid the politically uncomfortable perception that the populist billionaire was hoping to have his grassroots supporters pay him back.
For even as his campaign was building its vaunted internet-powered small-donor operation, much of the Republican fundraising establishment hung back, still stunned that Trump had emerged as the party’s standard-bearer. At the low point, in June, the campaign had just $1.3 million in the bank, according to its financial disclosures.
After the convention, the Republican National Committee began pulling in its traditional big donors, but the Trump fundraising machine still sputtered heading toward Election Day, especially after the release of the “Access Hollywood” tape that showed Trump bragging about groping women.
Then, on Oct. 28, came his surprising $10 million contribution. (That brought his total spending to more than $60 million.)
It was in those final, decisive weeks, too, that the weight of Las Vegas fell in behind him.
After months of hesitation, Adelson — gambling magnate, Republican megadonor and strident voice for Israel — became the candidate’s biggest contributor. Often along with his wife, Dr. Miriam Adelson, he donated $20 million to Trump’s campaign and political action committees supporting it.
He later gave $5 million more to the inaugural. The Las Vegas Review-Journal, which he had recently purchased, gave Trump a rare newspaper endorsement.
Others gave, too, including the Fertitta family, owners of casinos and the Ultimate Fighting Championship, who contributed more than $1.5 million. Steve Wynn, the candidate’s old Atlantic City casino rival, moved over to the friend column after the election, giving $729,217 to the inaugural and becoming the finance chairman of the party. (He resigned in 2018 amid a sexual assault scandal.)
As for Ruffin, he didn’t give the $10 million that Trump had complained was driving him crazy. But he and his wife did contribute almost $1.6 million during the campaign and to the inaugural. And he gave another $1 million in 2016 to Trump’s foundation before it shut down amid an investigation into allegations of self-dealing.
Moving The Money
After draining much of the cash he had on hand, Trump received more than $21 million in one-time payments from the hotel he owns with Ruffin.
Behind the campaign’s fundraising disarray lay a personal financial storm.
Trump’s tax records reveal that when he decided to leverage his brand in the political arena, its true bottom line bore little resemblance to the gold-plated success story he was hawking to the American people.
Most of his core businesses were losing money. The deep draughts of cash from “The Apprentice” and the resulting fame that had sustained him for a decade were steadily running dry.
It did not help when NBC, which aired Miss Universe and “The Apprentice,” cut ties with him after he announced his candidacy in 2015 with racist comments about immigrants.
Nor did it help when Deutsche Bank turned down his request for a loan for work at Turnberry, the Scottish golf resort that he had bought for roughly $60 million in 2014 and that was on its way to gobbling up almost $80 million more by the end of 2016, according to tax return information.
By year’s end, he would agree to pay $25 million to settle a class-action lawsuit involving allegations that Trump University was a fraud.
Whether for his businesses, his campaign or both, Trump was furiously moving money, his tax records show.
Since 2012, he had drained a lot of the cash he had on hand. That year, he took out a $100 million mortgage on the commercial space in Trump Tower and received nearly the entire amount as a cash payout.
The following year, he took $95.8 million out of a real estate partnership account at Vornado Realty Trust. After selling $38.6 million in stock in the first months of 2016, he ended the year having sold nearly $30 million more.
And there was another maneuver, the one that experts consulted by the Times described as highly unusual: the more than $21 million in one-time payments that the Trump-Ruffin joint venture paid out in 2016.
By analyzing the tax return information and public records, the Times was able to trace the flow of money — first to companies that Trump alone controls and from there to Trump himself.
To understand how out of the ordinary those payments were, consider the company that became the destination for the bulk of the money: Trump Las Vegas Sales and Marketing.
It was created in 2004 as Trump and Ruffin were drawing up plans for the Trump International Hotel. Precisely what it did, though, is obscure. It had no employees, or at least no payroll.
And while the Trump-Ruffin joint venture certainly spent several million dollars a year to promote its room rentals and condominium sales, that money did not go to Trump Las Vegas Sales and Marketing. The company’s tax records show that it had little income over the years, posting modest profits only twice: $54,924 in 2007 and $420,756 in 2008.
Then, in 2016, came a payment of $13,756,623.
Trump disclosed the payment in his 2017 federal ethics filings, but only with the tax records is it possible to see the entire chain of transactions. On the ethics filing, he said Trump Las Vegas Sales and Marketing had a “deal” with a subsidiary of the joint venture, but no other details are given.
The second unusual payment was for $2,685,000, divided between the two companies that hold Trump’s share of the hotel and then paid out directly to him. He called it one thing for the IRS (a “loan fee”) and another in his public filings (a “sponsor fee”).
The Trump-Ruffin hotel company listed one other large one-time expense on its 2016 tax return: a $4.8 million “development fee.” While the Times was unable to trace the path of all of this money through Trump’s tax records, his public disclosures say that a company called Trump Las Vegas Development also had a deal to receive development fees from a subsidiary of the joint venture.
(That company, according to the filings, actually had revenue of $8.2 million from January 2016 to April 2017. It is not clear where the additional $3.4 million came from.)
The IRS lets companies use business expenses like sales and marketing payments to reduce taxable income — but only if they are “both ordinary and necessary.” The Trump-Ruffin hotel venture wrote off at least $21 million in one-time payments to Trump.
The tax records do not specify when the payments were made or where the joint venture got the money for them.
But taken together with public records, they may offer some clues.
The Las Vegas hotel had long been a money loser. Between 2010 and 2012, each partner put $23 million into the business. Its losses were narrowing, though, and it began 2016 with $6.3 million in cash reserves.
That might have been a decent cushion, but it was hardly enough to cover the more than $21 million in payments to Trump. In fact, the payments drove the hotel to its biggest loss ever.
Then, seven weeks before the election, something else unusual happened. The Trump-Ruffin partnership borrowed $30 million from City National Bank in Los Angeles. Trump signed the loan documents in New York City, but tax records show that Ruffin personally guaranteed nearly the entire amount, should the company ever be unable to pay.
The partnership was not required to disclose on its tax returns how the borrowed money would be spent. But the timing of the loan, combined with the partnership’s lack of available cash that year, strongly suggests that the loan funded the millions of dollars in payments to Trump.
The experts consulted by the Times said that in assessing the legitimacy of the payments, the central question was whether they were compensation for actual work done.
To that end, Shaviro, the NYU tax law professor, said it would be especially important to examine the deals cited by the president’s financial disclosures to justify some of the payments.
Nathaniel Persily, an election law expert at Stanford Law School, said that if the payments were not legitimate and were then directed to Trump’s campaign, they would likely be considered illegal campaign contributions.
“If it turns out a corporation gave the campaign any money, that is illegal,” he said. “If an individual contributed any money exceeding the legal limits, that is illegal.”
The White House spokesman, Deere, did not answer the Times’ specific questions about the payments and any deals underlying them.
The subject of the Trump-Ruffin financial relationship came up, albeit obliquely, when the president’s estranged personal lawyer, Michael D. Cohen, testified before Congress in 2019. Had a businessman from Kansas given Trump the $25 million to settle the Trump University lawsuit? “I am not familiar with that, no,” he said.
Shortly after that, Ruffin told The Kansas City Star that he was the Kansas businessman in question. He offered a muddled explanation about some money that had been sent to Trump in 2016.
“He had $28 million in back fees that he never collected,” Ruffin said. “The hotel paid him [what] was owed to him. I don’t know what he did. … It was his money.”
Finally, a train
After being lobbied for years, the Trump administration did what Obama’s wouldn’t.
The dream shimmered at the edge of vision in the desert heat.
Ever since Amtrak had shut down the last train in 1997 — the Desert Wind, which wound its way north from Los Angeles — Ruffin and the other moguls who control the Las Vegas Strip had planned, waited, hoped.
Train schemes had risen and, inevitably, fallen — among them a proposal for a maglev train levitated and propelled by magnets. But in 2009, with the support of Harry Reid, the Nevada Democrat who was then Senate majority leader, the federal government had taken a crucial step, approving a rail corridor between Las Vegas and Victorville, in the California high desert.
Four years later, a proposed $5.5 billion federal loan for a bullet train had come before the Obama Transportation Department, to furious opposition from two powerful Republican lawmakers — Paul Ryan, who was chairman of the House Budget Committee, and Jeff Sessions, then the ranking member of the Senate Budget Committee — who considered it an untenable taxpayer risk. Ultimately the loan had been rejected, in part because the project could not comply with buy-American rules.
“We tried and tried and couldn’t get it done,” Reid said in a recent interview. Along the Strip, though, he joked that the only dissension was over whose casino would be closest to where the train would stop. “They know it would be a godsend to their businesses,” he said.
In 2017, Ruffin glimpsed a way forward in his friend, the new president.
Ruffin’s loyalty has brought access. He was with Trump on election night in 2016. He has met with the Treasury secretary, Steven Mnuchin, and the commerce secretary, Wilbur Ross. He and the president speak frequently. Trump has even sought Ruffin’s counsel on releasing his tax returns.
“I advised him not to,” Ruffin said in a 2017 interview with The Associated Press. “It’s a waste of time, and he’ll spend years explaining them and never get to accomplishing any of his goals.”
It was after the inauguration that he mentioned the predicament of his neighbor Anthony Marnell II. Marnell is an architect and oversaw the building of casinos like the Mirage, the Bellagio and Wynn Las Vegas. He also controlled the company trying to build the high-speed train.
So, a friendly favor for a friend.
“I mentioned it to Donald. And that would be something below his pay grade, so it would have to go to the Labor Department or the Transportation Department,” Ruffin told Forbes. “He said it sounds like a good deal, especially if it employs 80,000 people.”
Not long after, Marnell told the Review-Journal that he was considering approaching the Trump administration about a federal loan like the one the Obama administration had rejected. Las Vegas needed the train more than ever, he argued, now that the Oakland Raiders football team was moving to town.
People in Las Vegas had reason to hope the Trump administration might be more receptive than its predecessor had been. After all, Trump’s hotel made him one of their own. He had campaigned on investing in infrastructure, even riffing at one rally about America’s lag in high-speed rail.
“You go to China, they have trains that go 300 miles an hour. We have trains that go ‘chug, chug, chug.’ And then they have to stop because the tracks split, right?” Trump said. “We are like third world.”
For all that, Marnell’s long-sought federal loan remained elusive, and in the fall of 2018, he sold the business, renamed XpressWest, to a company owned by Fortress Investment Group LLC, a big New York financial firm. (Marnell, who declined to comment for this article, kept an equity stake in XpressWest.) Fortress owns a company named Brightline, which operates a private rail service in Florida.
Ben Porritt, senior vice president for corporate affairs at Brightline, said its trains had previously received several allocations of federal tax-exempt bonds.
These bonds, earning interest free of taxes, help companies attract private investors to often higher-risk projects. While they are distinct from the kind of federal loan Marnell sought, they nonetheless require government approval.
In March of this year, the Transportation Department’s Credit Council approved the sale of $1 billion in tax-free bonds, the final tranche of a $15 billion program begun during the Obama years.
The credit panel, made up of heads of the agency’s various branches, is led by Steven Bradbury, the department’s general counsel and acting deputy secretary, who came under fire during his confirmation for his role in providing legal sanction for torture techniques during the George W. Bush administration. Overseeing the panel is Trump’s transportation secretary, Elaine Chao.
Terry Reynolds, director of the Nevada Department of Business and Industry, said that while many complicated variables had to align, Ruffin’s lobbying was always seen as a “positive factor.”
A Transportation Department spokesman said Ruffin’s conversation with the president had had no impact on the review process, which was conducted by career staff members.
As for Ruffin, his spokeswoman said Ruffin and the president “are friends and talk about numerous subjects.” She added Ruffin does not have a financial stake in the train.
Officials in California and Nevada were watching. Less than a year earlier, Trump, feuding with California’s liberal leadership, had pulled federal funds for a separate high-speed rail project there. Now, with federal approval assured, California and Nevada voted to allow the issuing of an additional $3.2 billion in bonds.
The train company says it hopes to start construction later this year. For now, the route will start in Victorville, 90 miles from Los Angeles, though there are plans to extend it considerably closer, to Rancho Cucamonga. One day, the company hopes, it will run all the way to Los Angeles.
The Las Vegas terminal will be on the Strip, a short bus ride from the Trump International Hotel.
“We would benefit some,” Ruffin told Forbes. “But there are a lot of hotel rooms here. A lot of places they can go.”
Trump Organization Considers Sale of Its Seven Springs Property
Westchester, N.Y., estate has been difficult to develop.
The Trump Organization is considering selling its sprawling Westchester, N.Y., estate, according to people familiar with the matter, after years of unsuccessful development attempts that ended with an agreement to preserve part of the property.
The New York attorney general’s office has said it is examining whether any benefits Mr. Trump received from that agreement were improper as part of a broader investigation of alleged fraud by the president and his businesses.
Trump representatives have had conversations with local brokers about the possibility of a sale, the people said. The 213-acre property, known as Seven Springs, isn’t currently listed publicly. While President Trump has previously valued the property at more than $200 million, local agents estimated the property would trade for around $50 million or less. They said much of the previously perceived value was likely tied up in prior failed development plans, including a proposed residential subdivision.
A Trump Organization spokeswoman called Seven Springs “one of the largest, most valuable and most iconic properties in Bedford.” She added, “If the right opportunity presents itself, the Trump family would certainly entertain it.”
The Trump Organization has owned Seven Springs since 1995, when it purchased the property for $7.5 million. At the time, local agents said it was a bargain. Although it had been on the market for a year and was viewed as something of a white elephant, other major properties in Westchester County had sold for multiples of that amount.
Mr. Trump first attempted to build a golf course on the property but encountered fierce local opposition. The Trump Organization then pursued building a residential subdivision of luxury homes.
A 2011 Trump financial document values the property at $261 million, based on what it said was an assessment by Mr. Trump, his associates and outside professionals. It said the figure comes from the funds he would receive as homes were constructed and sold, plus the value of the existing mansion and other buildings.
Those homes were never built. Local real-estate agents said Mr. Trump had a particularly difficult time getting his plans approved because the property straddles several municipalities—Bedford, New Castle and North Castle.
In late 2015, Mr. Trump entered into an agreement with the nonprofit North American Land Trust not to develop 158 acres of the property. That area included 95 acres of mature forest and 52 acres of herbaceous meadows, according to the agreement. Under such agreements, known as conservation easements, a property owner can deduct the land’s value in exchange for not developing it.
If the property were sold, the new owner would be bound by the terms of the easement, according to the agreement.
As part of its fraud investigation into the president and his company, the office of New York Attorney General Letitia James has said it is examining whether the value of the easement was improperly inflated to get a larger tax dedication.
The Trump Organization has said the investigation by Ms. James, a Democrat, is all about politics. Eric Trump said on Twitter that Ms. James’s “sole focus is an anti-Trump fishing expedition that she promised during her campaign.”
A 2016 appraisal, prepared by real-estate services firm Cushman & Wakefield for tax purposes at the request of Eric Trump, valued the property at $56.5 million and the easement at $21.1 million, according to court papers.
The estate dates to around 1919, when it was built for Eugene Meyer, a former chairman of the Federal Reserve, first president of the World Bank and onetime publisher of the Washington Post. The main house, designed by architect Charles A. Platt, is constructed from sandstone quarried on the property. Artisans from Italy were tapped to ensure that the home’s 60 rooms, including 15 bedrooms and two service wings, were opulently designed, according to the Trump Organization website.
The Trump Organization estimates that the mansion spans about 50,000 square feet, making it one of the largest homes in the area. It has three pools, including an indoor pool cased in white marble, as well as a large wine cellar, an antique bowling alley and carriage houses. A second home on the property, built in Tudor style in 1919, was constructed by H.J. Heinz of the Heinz Ketchup empire, who was a friend of Mr. Meyer’s.
Mr. Trump famously allowed representatives of the late Moammar Gadhafi, the then-Libyan leader who was in New York to address the United Nations General Assembly, to pitch a Bedouin-style tent on the property in 2009. After local opposition, the leader didn’t stay there.
The Trump Organization website says Seven Springs is now used as a family retreat.
A nearby property owned by horse-racing enthusiasts Barry K. Schwartz, the co-founder of Calvin Klein Inc., and his wife, Sheryl Schwartz, spans about 740 acres, nearly three times the size of the Trump property, and is on the market for $100 million. A mansion less than 20 miles away in Pocantico Hills, N.Y., that was owned by the estate of David Rockefeller, the venerable chief executive of Chase Manhattan Bank, sold for $33 million in 2018. It sits on roughly 75 acres.
Donald Trump Has At Least $1 Billion In Debt, More Than Twice The Amount He Suggested
The president’s liabilities are spelled out in dozens of documents, published here.
No aspect of Donald Trump’s business has been the subject of more speculation than his debt load. Lots of people believe the president owes $400 million, especially after Trump seemed to agree with that figure on national television Thursday night. In reality, however, he owes more than $1 billion.
The loans are spread out over more than a dozen different assets—hotels, buildings, mansions and golf courses. Most are listed on the financial disclosure report Trump files annually with the federal government. Two, which add up to an estimated $447 million, are not.
It is important to note, as Trump did Thursday night, that he also has significant assets. Forbes values them at $3.66 billion, enough to make his net worth an estimated $2.5 billion. He is not broke, despite what many critics claim.
Some people also like to suggest that Deutsche Bank is the only institution willing to lend to Trump. That’s not true. The president’s creditors include at least six other institutions, two of which began or reworked deals while the president was in office.
One reason for all the confusion: Trump’s loans are not fully transparent. It’s still unclear to whom he owes an estimated $162 million against his skyscraper in San Francisco, for example. The loan against 1290 Avenue of the Americas is also something of a mystery. And it’s difficult to pin down the amount the president owes on a loan tied to his Bedford, New York, mansion. When asked about all of this, the Trump Organization did not respond.
Here’s what we know—and don’t know—about the president’s debt.
1290 Avenue of the Americas
What Trump owes: $285 million
Who is the creditor: Unclear (see below)
When it’s due: November 2022
Interest rate: 3.34%
Donald Trump owns a 30% interest in 1290 Avenue of the Americas, which might explain why he does not list its debt on the financial disclosure report he files annually with federal ethics officials. Trump’s share of the debt on the building appears to be the largest liability in his entire portfolio. In 2012, he and his business partner, Vornado Realty Trust, got a $950 million loan from four financial institutions: Deutsche Bank, UBS, Goldman Sachs and the state-owned Bank of China. It is not clear exactly who holds the debt today. The Bank of China told Politico that it had sold off its portion of the loan.
Trump International Hotel Washington, D.C.
What Trump owes: Est. $170 million
Who is the creditor: Deutsche Bank
When it’s due: Sometime in 2024
Interest rate: Variable
Trump funded his redevelopment of the Old Post Office building in Washington, D.C., which now serves as the Trump International Hotel, with a $170 million mortgage from Deutsche Bank. It’s possible that Trump does not still owe all of that money today—the New York Times, which has access to Trump’s tax-return data, recently reported that the loan has a balance of $160 million. Regardless of the exact amount of principal outstanding, it doesn’t appear that the hotel is doing well enough to cover the interest expenses with profits from the business.
555 California Street
What Trump owes: Est. $162 million
Who is the creditor: Unclear (see below)
When it’s due: September 2021
Interest rate: 5.1%
Trump also owns a 30% stake alongside Vornado in 555 California Street, a skyscraper in downtown San Francisco. The partners have been paying down the loan, but they might make changes to it soon. In June, Vornado announced that it was considering whether to recapitalize 555 California Street and 1290 Avenue of the Americas. Any transaction involving those two buildings could have a huge effect on Trump’s business, given that his stakes in the two properties are his most valuable assets.
40 Wall Street
What Trump owes: $138 million
Who is the creditor: Ladder Capital
When it’s due: July 6, 2025
Interest rate: 3.665%
Weeks after announcing his initial presidential run, Trump refinanced his skyscraper in downtown Manhattan, borrowing $160 million. He has been paying down the debt ever since, but he still owes $138 million, according to documents filed with the Securities and Exchange Commission.
Trump National Doral
What Trump owes: Est. $125 million
Who is the creditor: Deutsche Bank
When it’s due: Sometime in 2023
Interest rate: Variable
Trump got a $106 million mortgage against his Miami golf resort from Deutsche Bank in 2012, at the time that he purchased the property. In August 2015, shortly after Trump launched his presidential bid, he got a second loan against Doral, this time for $19 million. It’s possible that his debt on the property is now more than the $125 million combined value of the mortgages. The New York Times reported last month that Trump’s balance totals $148 million.
What Trump owes: $100 million
Who is the creditor: Ladder Capital
When it’s due: September 6, 2022
Interest rate: 4.2%
Trump took out a $100 million, interest-only loan against his signature Fifth Avenue tower in 2012. The property kicked off $13.3 million of net operating income in 2019, more than enough to cover the roughly $4.2 million Trump owes in annual interest expenses. Paying back the $100 million principal, due in two years, could be more complicated.
Trump International Hotel & Tower (Chicago)
What Trump owes: More than $75 million
Who are the creditors: Deutsche Bank, Chicago Unit Acquisition LLC
When it’s due: 2024 for part of it, unclear for the rest
Interest rate: Variable
The debt against Trump’s Chicago tower includes the most confounding liability in his portfolio. In addition to a Deutsche Bank loan for what seems to be $45 million, there’s a loan of more than $50 million, from a creditor named Chicago Unit Acquisition LLC. Here’s where things gets confusing: Donald Trump owns Chicago Unit Acquisition LLC, so he’s lending money to himself. If one of his companies owes more than $50 million to another one of his companies, then the company lending the money should theoretically be worth more than $50 million. But Trump does not list any value for Chicago Unit Acquisition LLC on his financial disclosure report. All of this has befuddled investigative reporters from Mother Jones, the Washington Post and, yes, Forbes for years.
What Trump owes: $13 million
Who is the creditor: Ladder Capital
When it’s due: July 6, 2024
Interest rate: 3.85%
Through a company called Trump Plaza LLC, the president controls two brownstone apartment buildings, a garage and a strip of retail shops on Third Avenue in New York City. From 2017 to 2019, one of the tenants paying rent to Trump Plaza LLC was Trump’s 2020 reelection campaign.
Palm Beach, Fla. home
What Trump owes: Est. $11 million
Who is the creditor: Professional Bank
When it’s due: June 1, 2048
Interest rate: 4.5%
Trump took out a 30-year, $11.2 million mortgage from Professional Bank on May 16, 2018, the day he purchased an $18.5 million home near Mar-a-Lago from his sister Maryanne Trump Barry.
Trump National Golf Club, Colts Neck
What Trump owes: Est. $11 million
Who is the creditor: Amboy Bank
When it’s due: Sometime in 2028
Interest rate: 5.25%
Trump purchased a golf club in Colts Neck, New Jersey, for $28 million in 2008, borrowing $18 million from a local institution called Amboy Bank. In 2019, the club produced just $7.6 million of revenue, suggesting it’s now worth about half of what Trump paid for it. Forbes estimates he still owes roughly $11 million on the property.
Trump Park Avenue
What Trump owes: Est. $10 million
Who is the creditor: Investors Savings Bank
When it’s due: Sometime in 2020
Interest rate: 3.25%
The president’s financial disclosure report, which discloses assets and liabilities in broad ranges, lists the loan against Trump Park Avenue at $5 million to $25 million. Patrick Birney, who works in financial operations at the Trump Organization, said in February 2019 that the balance was just under $10 million. It’s possible that the principal is lower today.
Trump National Golf Club, Washington, D.C.
What Trump owes: Est. $7 million
Who is the creditor: Chevy Chase Trust Holdings
When it’s due: Sometime in 2029
Interest rate: 5.5%
Trump took out a $10 million loan in 2009, when he bought a golf course near his future home for $13 million. Forbes estimates its principal outstanding is now more like $7 million. With a 5.5% interest rate, it’s one of Trump’s priciest loans.
Trump International Hotel & Tower (NYC)
What Trump owes: $6 million
Who is the creditor: Ladder Capital
When it’s due: August 6, 2026
Interest rate: 4.05%
Five months before he was elected president, Donald Trump refinanced the debt against this tower on the corner of New York City’s Central Park.
What Trump owes: $5-25 million
Who is the creditor: The Bryn Mawr Trust Company
When it’s due: Sometime in 2029
Interest rate: 4.5%
At some point last year, while the president was in office, the Trump Organization reworked the loan against his New York estate. The maturity date moved from 2019 to 2029, and the interest rate jumped from 4% to 4.5%. It’s unclear exactly how much the president still owes on the loan.
Trump Partner Shelves Office Tower Sales Effort That Hoped To Raise $5 Billion
Sale by Vornado would have given cash windfall to Trump Organization as it faces $400 million in debt coming due.
The Trump family’s partner in two of its most valuable properties halted an effort to sell the buildings, cutting off what could have been a big cash payout for the Trump Organization, which has hundreds of millions of dollars in debt coming due.
Vornado Realty Trust, which co-owns with the Trumps an office tower in San Francisco and another in Midtown Manhattan, decided to shelve the sales process when it couldn’t attract a buyer at the prices it wanted, according to one of the selling brokers and other people familiar with the matter. Concerns about conflicts of interested presented by selling the buildings with President Trump still in the White House also hampered the efforts, some of these people said.
Vornado was hoping to raise up to $5 billion in a sale of the two properties, these people said. At that price, the Trumps’ 30% stake in each of the towers would have been worth $1.5 billion.
As recently as this month, Vornado Chief Executive Steven Roth said during the property firm’s analyst call that he was continuing to actively pursue a deal for the buildings despite what he described as investor caution. “There is active interest from investors and widespread appreciation for the quality of these assets,” he said.
New York City and San Francisco office buildings have been among the hardest hit real-estate sectors since the outbreak of Covid-19. The markets were the most expensive in the U.S. when the pandemic arrived.
Since then, many workers have been working from home or fled to cheaper cities, reducing corporate demand for office space. Vornado’s asking price proved lofty given how rapidly office values have declined in those cities, these people said.
The Trump Organization has more than $400 million of debt due in the next few years, and it isn’t known how many lenders might be willing to work with the Trumps to refinance it. Mr. Trump’s tumultuous business history and concerns over his political activities have made banks reluctant to do business with the company.
The Trump Organization has also considered selling its Seven Springs estate outside of New York City, and it has previously looked for a buyer for the Trump International Hotel in Washington, D.C.
The company has said its businesses are financially sound. “The Trump Organization is an incredible company with tremendous cash flow. We have never been stronger,” it said.
With its minority stake, the Trump family is a passive owner and has no control over the sales decision-making for the two Vornado buildings, these people said. Vornado’s Mr. Roth has served as an adviser to Mr. Trump, part of a yearslong relationship between the men.
The high price tag limited the number of potential buyers. In many cases, flush foreign-government funds with an eye for trophy American properties would be leading candidates for these high-end properties. Some of these buyers were concerned about potential conflicts, or the perception of conflicts, in buying an asset from the U.S. president, these people said.
The two buildings, at 555 California Street in San Francisco’s Financial District and at 1290 Avenue of the Americas not far from Manhattan’s Rockefeller Center, are both modern office towers. They are near-fully leased properties with blue-chip tenants in the law, technology, finance and investment industries.
Vornado now plans to refinance its loans on the buildings, said Doug Harmon, an investment adviser at Cushman & Wakefield. His firm led marketing on the New York property, while Eastdil Secured LLC led on the San Francisco tower.
“We are now focusing more on refinancing both assets,” Mr. Harmon said. He added that the owners hope to put the properties back on the market sometime next year after election uncertainty fades, a coronavirus vaccine arrives and “when international investors can travel with less restrictions, and the path back to normal is under way.”
The Trumps are unlikely to receive much if any cash from refinancing, which is typically used for a building’s cash reserves or improvements.
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