TRUMP’S BUSINESSES SHOW HE’S LOSING MONEY BEING THE PRESIDENT

…Trump Tower has been headed down hill for years……

It’s becoming kind of lonely inside of Trump’s landmark these days.

OK, the results are in on the question of whether it was a good idea for Trump to stay in business while he was president.

According to an industry leader, Forbes, Trump’s net worth has dropped from $4.5 billion in 2015, just before he officially announced he was running, as of 2017, it was $3.1 billion.  As to the Forbes 400, of the wealthiest business owners, Trump has dropped 138 positions over the last two years.

When the Trump Tower shops first opened, it was 4 floors of high-end retailers including Tiffany’s, Burberry, Coach, Gucci, Prada, Talbots, Dior, MontBlanc, Ferragamo, Prada, Armani, Cartier and other high-end stores. 

The hollowing out of Trump towers has been going on for the last 3 years.  Nike abandoned its flagship Trump Tower store, and even Ivanka Trump’s accessories business closed up shop as well. What’s left is basically nothing but Gucci, Starbucks and wall-to-wall Donald’s stores.  Trump Bar sits atop Trump Grille and next to Trump Café.  The Trump Store and Trump’s Ice Cream come next.  It is highly unlikely that Trump pays himself any rent for these Trump stores.

Trump’s net operating income dropped 27% between 2014 and 2017, his first year in the White House.  When the so called real-estate mogul descended the escalator to launch his campaign, in his own building, no one could have predicted the chain of events that would lead to this point.  Even among those who gave his moon-shot presidential bid a chance of success, the assumption then was that Trump would put his assets in a blind trust before taking office.  But that's not the Trump way.

By refusing to divest his businesses, Trump raised a new question: How would the most divisive presidency in modern American history deal with a company built on the president’s personality?  Forbes has been working to answer that question since the moment Trump got elected.  They have interviewed nearly 200 colleagues, partners and industry observers since he was elected.  While the experiment continues to unfold in real time, the early results are already in.  Much as he’s trying, and the liar-in-chief is definitely trying hard, Donald Trump is not getting richer off the presidency.  In fact, it’s just the opposite.

For Trump Tower and the Trump hotels in Chicago and Las Vegas, the numbers don’t lie, and they are not good.

The latest question is, how does “Trump the president” affect the “Trump the brand”. Those familiar with him, they all saw his 2016 run as a surreal marketing strategy, and Trump had said as much, telling Fortune Magazine, way back in 2000, “It’s very possible that I could be the first presidential candidate to run and make money on it.”

But, since his unexpected ascent to the White House, Trump has tried to leverage the trappings of the presidency to benefit his commercial projects.  This was from his visits to his golf courses, to hosting summits at Mar-a-Lago, and to launching a new hotel-licensing business aimed at his voters. 

However, Trump’s mixture of politics and business has proved to be a net loser for him so far.  He has not only polarized the country, he has also continued to polarize the Trump business.  And all to the tune of an estimated $200 million hit against his net worth.  

Understanding how this has happened, offers a fresh window into the state of Trump Inc.—and Trump’s America.  

In May 2016, a dozen or so golf course appraisers settled in at Trump National Doral, the president’s 643-room Miami mega-resort.  They were there for a few days of seminars and golf.  However, at the time, Trump was steamrolling through the Republican primaries while bashing Mexicans, Muslims and even the Pope.  Therefore, it was no surprise when, inside his resort, the conversation turned to how the Trump uproar was affecting Trump’s golf businesses.

A top Doral executive, was willing to provide the answer.  According to three witnesses, the executive told the room of appraisers that business at the resort, whose revenues were as big as Trump’s ten other US golf courses combined, was suffering because of the political campaign. 

Historically, Doral had drawn much of its clientele from the Northeast, where Trump was and is very unpopular. “At the time there was a lot of talk about negative comments that Trump had made,” says Jeff Dugas, who attended the event. “Nobody was surprised.”

Big names like Nascar and the PGA Tour had pulled their business from the club.  After Trump won the election, Doral lost thousands of booked room nights, according to someone who knows the resort’s business.  Doral’s 2017 revenues fell by an estimated 16%.  And that was before a deranged gunman wandered into the lobby earlier this year, draped an American flag over the front desk and began shooting at the chandeliers before he was apprehended by ­police.

A similar financial scenario has played out in Trump’s traditional wheelhouse: his luxury residential real estate.

The president still holds roughly 500 condos, co-ops and mansions, all with their own complications, in terms of both hassles and branding.  He has 37 units worth an estimated $215 million in midtown Manhattan.  Prices for condos in Trump Tower have fallen every year since 2015, when Trump declared his presidential candidacy.  They are currently at an estimated 33% below their highs.  Similar trends are playing out a few blocks away at Trump Parc East, where prices are down 23%, and at Trump Park Avenue, where they have dropped 19%.

In Chicago, values of Trump condos have crept downward, the opposite direction of the overall Chicago market. “People had bought into the building based on the brand being synonymous with luxury,” says Cyndy Salgado.  She is a real estate broker who once worked for the Trump Organization, selling condos in the Chicago tower. “Now, many people feel that the brand represents divisiveness, embarrassment and his questionable morals.”

All told, the shift in perception has erased an estimated $50 million from the value of his residential units in Chicago and New York.

On the Caribbean island of St. Martin, Mario Molinari, a real estate agent, recalls trying to sell a Chinese billionaire a villa a few months ago. The seller, he says, was Donald Trump, who was offering a mansion with 11 bedrooms, an outdoor bar and a private tennis court for $16.9 million.  But when they got to the villa's gate, the president’s property manager told them they needed background checks to go inside.  This typically takes a couple of days to process. “It’s too small for me,” the billionaire responded, being totally miffed.  More than a year after the place went on the market, it still hasn’t sold.

After Trump had made Mar-a-Lago world famous, the club doubled its initiation fee to $200,000.  However, the fallout from the president’s response to the deadly white-supremacist rally in Charlottesville reportedly prompted roughly 20 organizations to yank events from the club, likely costing Trump over $1 million in revenue.

For now, Trump’s presidency remains a net loser for him, which seems ironic.  By not divesting, he set himself up so that his actions, and those of people who engage with his businesses, present perpetual conflicts of interest, or the appearance of a conflict. 

Meanwhile, if he’d liquidated, paid capital gains tax on his entire fortune and created a blind trust to invest it all in the booming stock market, Trump would be $500 million richer than he is today, and without all the headaches.

So, from this writer’s POV, “Just keep it up President Trump!!!”

Copyright G. Ater 2019