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Trump’s Puerto Rico Golf Venture: Not Such A Great Deal

Just dual years ago, a former Trump International Golf Club in Puerto Rico filed for bankruptcy. The penury filing came reduction than a month after Trump had announced he would run for president, basing his education on his skills as a businessman.

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Just dual years ago, a former Trump International Golf Club in Puerto Rico filed for bankruptcy. The penury filing came reduction than a month after Trump had announced he would run for president, basing his education on his skills as a businessman.

Michael Cohen/Getty Images

Ever given Hurricane Maria slammed into Puerto Rico final month, President Trump has been indicating out a commonwealth’s “massive debt,” as he has put it.

And afterwards on Tuesday on Fox News, he warned Puerto Rico’s investors that “you can contend goodbye” to a debt released by a smashed U.S. territory.

It wasn’t transparent accurately what Trump meant by that. But a president’s views on Puerto Rico’s troubles might have been sensitive by his possess practice there. Not prolonged ago, he himself finished adult on a wrong side of a gamble on Puerto Rico’s financial health.

Just dual years ago, a former Trump International Golf Club in Puerto Rico filed for bankruptcy. The penury filing came reduction than a month after Trump had announced he would run for president, basing his education on his skills as a businessman.

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But those skills were sorely tested in Puerto Rico. Here’s what happened, starting a decade ago:

Back in 2007, a Trump Organization began a business attribute with a 36-hole, oceanfront club. The owners brought in Trump in hopes of creation a four-year-old craving thrive, regulating a New York businessman’s code name and supervision services.

Once in a Bloomberg interview, Trump’s son Eric Trump emphasized that a family had never had tenure seductiveness in a property. “We have 0 financial investment in this course,” he said. “This is a apart owner. We quite conduct a golf course.”

It might have sounded good during a time. But during slightest in retrospect, it seems a Trump family should have seen that a understanding was entrance with a red warning flag.

Puerto Rico had mislaid a absolute mercantile motorist a prior year: a supposed Section 936 sovereign taxation write-off for companies with money-earning subsidiaries on a island. The taxation preserve had been generally renouned with a curative industry.

So by a time a bar and a Trump Organization were initial fasten forces, Puerto Rico’s unemployment rate was already climbing. It rose from 10.6 percent in Mar 2008 to an contingent rise of 17 percent in May 2010.

In fact, between 2007 and 2015, a island had usually one year of mercantile growth.

Initially, a Trump-branded bar did try to make a dash notwithstanding a tough economy. In 2008, it hosted a PGA Puerto Rico Open, and used a contest to kick-start a condo sales.

“This is clearly going to be a world-class resort,” Trump told Florida Golf Magazine during a time. “I never had a plan with so most ocean-front.”

The repository quoted Eric Trump as saying, “The PGA contest served as a ideal height to entrance this one-of-a-kind plan to such an critical audience.”

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In fact, it was not all that unusual. The bar fit a regulation Trump frequently uses: golf and branding, with high-end residential churned in. One new instance is a Trump International Golf Club in Dubai — an impracticable 18-hole march and 100 oppulance villas.

But compared with Dubai, there was a large difference: a Puerto Rico bar was built on a diseased financial structure. The secretly owned golf march got a supervision growth bank to emanate $16.2 million in holds in 2000. The plan took longer and cost some-more than planned, heading to a $7.5 million bond emanate in 2004.

So it unequivocally indispensable to take off in 2008 to live adult to all of a financial obligations, though instead, it kept losing money.

From 2008 to 2012, it mislaid between $5.8 million and $7.2 million annually. In 2012 it had usually 63 members, and usually 4 had bought condo units. Mainland players weren’t flocking to Coco Beach, and revenues from a Puerto Rico Open were usually declining.

Throughout those hilly years, a Trump Organization was doing a common thing: formulating 6 corporate entities to hoop a bar supervision and a branding, and fixing Ivanka Trump as clamp president, as remarkable in her White House financial avowal report. The club’s 2012 annual news shows it paid Trump 4.5 percent of a sum annual revenues — $609,607 sum for a 5 years from 2008 to 2012. But a news doesn’t uncover what Trump was spending on a operations there.

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In 2011, a club’s debt got rolled together in a refinancing for $26.4 million. All along, a understanding had resembled a U.S. housing predicament — i.e., it had a balloon mortgage, with small, interest-only payments for a initial several years.

The re-fi didn’t help. In 2012, a bar defaulted, and for a subsequent 3 years, a debt payments were done by Puerto Rico’s Tourism Development Fund, that was guaranteeing a bonds.

In 2015, a Trump partnership ended. The bar reverted to a strange name — a Coco Beach Golf and Country Club — and filed for bankruptcy. It claimed $9.2 million in resources and $78.1 million in liabilities: $32.6 million in holds and $45.5 million to other creditors. The Tourism Development Fund sought to redeem $32.1 million in principal and seductiveness on a bonds.

Much serve down a list, Trump International Golf Club during Coco Beach claimed $690,339 in delinquent supervision fees.

The failure files don’t prove either Trump’s association ever recovered a claim. The Trump Organization didn’t respond to NPR inquiries.