New documents reveal the properties in the crosshairs of New York’s investigation into the Trump Organization.
The documents were filed in court Monday as Attorney General Letitia James asked a judge to demand the company produce documents and to order Eric Trump, the executive vice president of his father’s company, to answer questions, the New York Times reported.
NY state is examining four properties
The filings reveal the state is examining four properties: the mixed-use Manhattan building 40 Wall Street, Seven Springs Estate in Westchester County, the Trump International Hotel and Tower in Chicago and the Trump National Golf Club in Los Angeles.
The state is seeking clarification about inconsistent valuations of these properties by President Donald Trump’s business, depending on what furthered its interests.
Trump’s Real Estate
The Times reported that the Seven Springs Estate was valued by the company at $291 million in 2012, but by 2018 Trump reported the 212-acre property was worth at most $50 million. Between those years, Trump’s development plans were blocked and the firm claimed a $21 million tax break for land conservation. A similar tax break was claimed at the Trump golf club in Los Angeles.
At issue for the Chicago property is $100 million worth of debt that was forgiven by the property’s lender, Fortress Credit Corporation, which would typically be reported as income. New York’s top law enforcement official is seeking clarification about how the Trump Organization recorded that forgiven debt.
Property Valuations in Question
It is unclear what investigators are looking for at 40 Wall Street, but the Times highlighted a discrepancy between Trump’s $527 million valuation of the building in 2012. That same year experts told the Wall Street Journal it was worth at least $400 million.
Trump bought the ground lease for Manhattan property for $1 million in 1995. In 2010, it received a $160 million loan from Capital Loan for which Trump personally guaranteed $20 million, Crain’s reported.
President’s former personal lawyer Michael Cohen testified before Congress that Trump and his company falsely represented the value of its real estate assets.
The investigation examines whether civil laws were broken
The investigation examines whether civil laws were broken and whether the business could be sued for restitution or fined if wrongdoing is discovered. If the probe uncovers evidence of potential criminal acts it could turn its findings over to another law enforcement agency.
Eric Trump has derided the investigation as “the highest level of prosecutorial misconduct.” The executive and son of the president claims the probe is politically motivated. James tweeted about her filing just as the Republican National Convention got underway.
“For months, the Trump Organization has failed to fully comply with our subpoenas in this investigation,” she wrote.
Sorcue: [NYT] — Erin Hudson
Donald Trump’s businesses are on the wrong side of the Covid-19 divide.
While the stock market has roared back and some tech companies have flourished during the pandemic, the travel and leisure industry on which the president’s properties depend has sustained unprecedented losses.
Yet even before the crisis, their value had started to slide, according to Bloomberg, and Trump’s heavy investment in golf is at odds with changing generational tastes.
The real estate investment trust is looking at options to recapitalize 1290 Sixth Avenue in Manhattan and 555 California Street in San Francisco. Vornado owns a 70 percent controlling stake in the properties.
Operating income at three Trump buildings with public financials — 725 Fifth Avenue, 40 Wall Street and 1290 Sixth Avenue — declined by $16.3 million in 2019, according to Bloomberg.
Since the publication began tracking Trump’s wealth in 2015, the past year has been the worst for Trump as his net worth declined by $300 million, or about 10 percent of his fortune. Forbes in April estimated that it fell by a full $1 billion, to $2.1 billion. [Bloomberg] — Orion Jones