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Trump's deals south of the US-Mexico border wall

Published: Apr 12, 2017 07:53:44 AM IST
Updated: Apr 12, 2017 09:52:56 AM IST

Trump's deals south of the US-Mexico border wallImage: Patrick Welsh for Forbes

Trump's failed plan to have his name on a Brazil beachfront
The 13-storey Trump Hotel in Rio de Janeiro should’ve been a sun-kissed shoreline landmark. Instead, the project remains 40 percent  incomplete, and the developer has become ensnared in a corruption investigation.

Paulo Figueiredo Filho, CEO of real estate developer LSH Barra, inked the branding deal with the Trump Organization in 2014. Just a year later, Figueiredo left LSH Barra abruptly; he hasn’t commented to Forbes on the circumstances surrounding his departure. (“I don’t have anything bad to say about him,” Trump says, “other than we don’t share the same taste for interior design.”) In the summer of 2016, the unfinished hotel opened to house visitors to the Olympics. A few months later, authorities announced that LSH Barra was under investigation in connection with a corruption scheme involving two Brazilian pension funds. The Trump Organization withdrew from its agreement with LSH Barra in December 2016. LSH Barra insists that there were no “irregularities” and says it is cooperating with the authorities.
—Dan Alexander & Daniela Sirtori-Cortina

The chaos at Panama City Ocean Club
Soon after the 70-storey Ocean Club Panama City opened in 2011, the project began to unravel. In 2013, the Trump Organization’s Panamanian partner, a firm owned by developer Roger Khafif, filed for bankruptcy. Building occupants later reportedly tried to get the Trumps removed from their management role. Amid the dispute, the Trumps cut internet and phone service at club offices (telling the Associated Press it was for “security and privacy concerns”), and filed an arbitration suit at the International Chamber of Commerce in Paris seeking a reported $75 million in damages. The outcome of the case has not been made public.
—Noah Kirsch

Eric Trump’s costly Uruguay trip
In January, Eric Trump travelled to the resort town of Punta del Este, Uruguay, to visit a 26-storey beachside tower, with an army of secret service members in tow. The tower cost Argentine developers Felipe Yaryura Tobias and Moises Yellati $100 million, and the trip wasn’t cheap for American taxpayers, who were reportedly stuck with a $100,000 hotel bill for the bodyguards and embassy staff who accompanied them.

Ghost Towers: The Trump branded Mexican resort that fell apart
In 2006, Los Angeles-based real estate developers Jason Grosfeld and Adam Fisher announced a partnership with Trump to develop a two-tower condo/hotel project in Baja, Mexico. The duo had previously worked with Trump on his successful Trump International Hotel Waikiki in Honolulu, and they quickly pre-sold nearly $300 million worth of units. Buyers who put down deposits in 2006 were promised that they would receive their units in 2008. But Grosfeld and Fisher never secured financing nor did they proceed much further than digging a hole in the ground, even as buyers received updates throughout 2007 and 2008 suggesting that the firm had begun construction. Then, in January 2009, at the peak of the credit crisis, notices were sent that Trump had cut ties with the developers; a month later, the unfortunate early buyers were informed that they would not be getting their deposits back. Unsurprisingly, they sued. The developers and Trump settled separately in 2012 and 2013. “Don’t take anything for granted,” says Grosfeld. “We had a project where we had 30 percent deposits and massive pre-sales, and couldn’t get it financed.”
—Jennifer Wang

Trump’s isle of disappointment
Swiss-Italian banker Antonio Saladino was desperate to make his lush resort on the north shore of Canoun Island a success. He had spent years failing at it, so in 2003, he brought in Donald Trump to erect 15 custom-built villas around his hotel and put another 10 along the resort’s golf course. Trump also agreed to operate the golf course and a stand-alone casino. None of it helped much. In 2010, Saladino gave up on his pet project and sold out to Irish billionaire Dermot Desmond, who promptly ended the Trump deal before selling out himself in 2015.
—Chloe Sorvino

The Trump Organization may be resurrecting a Dominican partnership
Donald Trump has vowed “no new deals” while he’s in office. But what about resurrected deals? Back in 2007, Ricardo Hazoury, president and co-owner of Dominican luxury resort company Cap Cana, agreed to license the Trump brand for a massive oceanfront development. But he ran short of funds during the financial crisis and couldn’t finish the project. Trump sued Cap Cana for $5.8 million in 2012 and settled out of court for an undisclosed sum. The whole project looked dead—until Eric Trump visited the Dominican Republic last month. Now, Hazoury says, the “relationship remains incredibly strong” and he’s “excited to be working with the Trump Organization in the future phases of the project”. Hazoury won’t offer any details on exactly what he’s working on with the Trumps, who won’t comment, either.
—Katherine Taylor

(This story appears in the 28 April, 2017 issue of Forbes India. To visit our Archives, click here.)

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