It appears that the beginning of the end of Trump’s business empire has begun as fortunes plummet, and the Trump name is being scrubbed off skylines from New York to Rio to Toronto as the Trump brand backfires.
The Guardian reported on Tuesday that “Trump has tumbled more than 200 places in the world ranking of billionaires as a result of his fortune shrinking by more than $400m (£287m) to $3.1bn over the past year.”
Citing Forbes “The Billionaires 2018,” The Guardian noted that Trump “slipped from 544th richest last year to 766 this year. It is the second year running that Trump’s fortune has dwindled.”
The Guardian went on to explain the lowered ranking, as follows:
The drop in Trump’s estimated fortune comes on top of Forbes wiping $1bn off his net worth in its 2017 rankings. The magazine attributed the decline in Trump’s wealth to “a tough New York real estate market, particularly for retail locations; a costly lawsuit and an expensive presidential campaign”. Trump reached a $25m settlement in a legal dispute about claims that his Trump University real estate courses allegedly defrauded students.
Loses at his golf courses, including Turnberry in Ayrshire, have increased forcing the President to inject cash to keep them afloat. Losses at Trump Turnberry, his biggest investment outside of the US, more than doubled to £17.6m in 2016. Trump Turnberry owes Trump £112m, nearly double the £63m it owed him the previous year.
Trump’s golf resorts and real estate empires have taken several major hits since he announced his candidacy for president in 2015.
We will detail three such instances, below:
Strike One: Trump Loses The British Open
The Independent reported in December 2015 that Martin Slumbers, the new chief executive of the Royal and Ancient Golf Club of St Andrews, had been expected to endorse Trump’s course to host the 2020 Open Tournament, but decided not to after Trump’s slew of racist remarks about the Chinese, Mexicans, Muslims, and women dominated the news that year. As The Independent reported, increasing concerns regarding the risk of boycotts by tournament sponsors and players proved to be too much for the prestigious governing body.
Bear in mind, this rejection has wide-reaching implications for Trump’s golf resort empire, as the Royal and Ancient Golf Club of St Andrews is considered one of the oldest and most prestigious golf clubs in the world; and is regarded as the worldwide “Home of Golf.”
Then, there’s the financial blow to Trump’s empire of ego. Trump purchased the Turnberry resort last April for “just over $63 million,” renaming it Trump Turnberry. Promising an upgrade of slightly more than $300 million, “the purchase appeared to give the billionaire the near-guarantee that when The Open came to his place, he would be center-stage at the winner’s presentation party on the 18th green,”along with other dignitaries in a ceremony shown to millions around the world, according to a report by The Independent on Sunday.
Strike Two: Trump Loses Bitter 2-Year Court Battle
The second blow occurred the following week, when Britain’s Supreme Court ruled unanimously against Trump’s efforts to block the construction of a wind farm in Scotland.
As Think Progress reported at the time, Trump had been “fighting to prevent the construction of a wind farm off the coast of Aberdeen, Scotland, since 2013.” Trump “maintained that the wind farm, if constructed, would ruin the view of a luxury golf course he owns near the planned site of the farm. The Scottish government approved plans for the wind farm in 2013, and since then, Trump’s challenge had lost twice in Scottish courts.”
Strike Three: Trump Golf Club Violates ‘A Fundamental Rule Of Life’ – Loses $5.7M Lawsuit
In early 2017, a Florida federal Judge ordered Trump Jupiter Golf Club to pay nearly $6 million dollars to former members after they were barred from the club while still paying dues.
As NBC News reported at the time, “Judge Kenneth Marra of the Southern District of Florida found that Trump’s company had breached the membership contract and ruled in favor of 65 plaintiffs who filed a 2013 class-action lawsuit — one of thousands of legal actions Trump and his businesses have faced.”
Golf Digest reported that: “Trump purchased the Jupiter club from the Ritz-Carlton for $5 million in 2012. In turn, according to the PalmBeachPost.com, he was to be responsible for $41 million in refundable deposits owed to club members.”
Bloomberg reported that Judge Marra ruled that “Trump’s club breached a contract to provide ‘persons lawful permission to use and access the club.’ Without a right to access, ‘no membership would exist’ and an ‘essential purpose of the membership contract would be nullified.’”
Strike 4: Trump’s Real Estate Empire Crashes With Losses Of Hundreds Of Millions Of Dollars
The Guardian reported mid-January 2018 on the beginning of the end of Trump’s real estate empire, stating that global properties are dumping their licensing agreements to carry the Trump name.
“Plastering the Trump brand – which can cost tens of millions of dollars to lease – on your luxury hotel or apartment complex once added a veneer of prestige and upped profitability; Trump used to boast that it would increase a property’s value by 25%,” reported The Guardian, adding that:
Since the Donald embarked upon his political career his surname appears to have become a liability…. According to a recent report by CityRealty, a real estate listings and research service, prices in the 11 Trump-branded condo buildings in Manhattan dropped below the borough average for the first time ever at the end of 2017. While the average price per square foot for all Manhattan condos fell by 1%, the price per square foot for condos in Trump buildings fell 7% in the 12 months to November 2017.
“Any building that chooses to end its association with the Trump brand is likely motivated by financial reasons … [and] no doubt greatly influenced by beliefs about how the brand affects the building’s bottom line,” says Gabby Warshawer, director of research for CityRealty. All of which, she says, raises “questions about the viability of the Trump brand”.
And this shakeup has not been limited to properties in the USA either.
In the two-and-a-half years since he announced his presidential bid, his brand has come off at least seven buildings in four cities: Panama, New York, Rio, and Toronto. Trump-branded hotels in Vancouver and Chicago are also rumoured to be attempting to sever their ties.
Canadians, in particular, have been very clear that they don’t want the Trump name associated with their cities. In December 2015, shortly after he called Mexicans “rapists” and criminals, Toronto councillor Josh Matlow campaigned to get the owners of what was then the Trump Tower to change the building’s name.
“Toronto’s city motto is ‘diversity our strength’,” says Matlow now. “My view, along with many other Torontonians, was there no place for Trump’s name in the skyline of the world’s most diverse city.” In June 2017 the building’s owners spent millions of dollars exiting their contract with the Trump Organization and the Toronto skyline is now Trump-free.