Donald Trump’s luxury hotel in New York’s upscale SoHo neighborhood in Manhattan was supposed to be “an awe-inspiring masterpiece” and a “work of art.” Instead, the project with Russian ties became a financial sinkhole.
It seems that all the problems began when Trump became president. The president just has severed his name from SoHo, and last June, he removed his name from a Toronto hotel development project.
The Trumps’ relationship to Russian oligarchs have hurt the family business. One lawsuit claimed that SoHo was financed by felons and Russian money. F.B.I. informant and Russian deal maker, Felix Sater, who is a felon, worked to finance the project.
According to The New York Times, Sater was still trying to work out a deal to build a Moscow Trump Tower even as Trump was on the campaign trail. A Dallas hotel deal feel through when a potential partner discovered the ties to Russia and Kazakhstan.
In another lawsuit, the Trumps had to pay 90 percent of their portion of the $3.16 million in condo deposits, because they illegally inflated the sales figures.
The five-star SoHo hotel and condominium combination has been losing money, because the rooms have not been at capacity, and the condo sales were sluggish. The main restaurant even shuttered its doors. An attorney for the eatery said things went downhill “since the election,” according to The New York Times.
Trump did not own either development. Instead, the Trump Organization just managed the hotels’ day-to-day operations. Then, the family took a cut of the revenue, if the SoHo project profited by a certain amount. If not, the Trump’s had to pay the owner.
An organization out of California, CIM, owns it and will pay the Trumps to get out of the failing deal.
The president announced the kickoff of the SoHo project on The Apprentice eleven years ago, and his three oldest children all attended the spectacular accompanying party.
The reasons that Trump decided to pull out were the inability of his name to pull in investment money and an “election-related slump.”
During the 2016 campaign and for the initial period of his time in office, the Trump Organization earned a minimum of $597 million in revenue. That was about three percent less than it earned in the previous period. These numbers came from the president’s June financial disclosure forms.
After the inauguration, Trump Sr. turned his business interests over to his two elder sons, Donald Trump Jr. and Eric, to manage. According to the New York Times, since Trump took office, the government required the family business to:
‘Comply with a lengthy review process as part of their father’s presidential ethics pledge.’
The presidency has not been all bad for the family business. Trump has made a habit of visiting his private golf resorts nearly every weekend, since he went to Washington D.C. He even managed to squeeze in a quick trip to the Trump International Hotel Waikiki on his way to East Asia.
Using the office of the U.S. presidency is a unique form of marketing, and it has drawn in profits.
The Trump International Hotel in Washington has done quite well. The president made almost a $2 million profit in just the first quarter. Not only do Republicans and lobbyists go there, foreign leaders stay there, too. It has been a way for them to earn the president’s favor.
There have been questions surrounding Trump’s money-making ventures, because the Emoluments Clause of the Constitution forbids presidents from taking financial gains from foreign governments.
The Republican Attorneys General Association and corporate donors who gave a minimum of $125,000 held an event at Mar-a-Lago in November. Such events pay the Trump family well.
The white cap that Donald Trump wore to tour the Houston, Texas areas ravaged by Hurricane Harvey is available for sale at the Trump’s online store, TrumpStore.com.
Featured Image via Getty Images/Michael Loccisano.
H/T: New York Times.