Capitol Riot threatens Trump’s already hurting business

The other risk for the Trump organization is that some customers stop protecting their businesses, especially the hotels and golf courses. The company tried to sell its hotel in Washington, DC, but the pandemic made buyers wary. The hotel was popular with fans of mr. Trump and at organizations that have tried to benefit the president. It was already expected that things would go down as soon as Mr. Trump leaves office.

The golf course and resorts of the Trump organization are especially important and account for almost half of the company’s annual revenue. The courses are closely linked to the president and used his name to lure customers into a weak golf market. If the courses struggle to attract and retain members, it will weigh on the Trump organization in general.

PGA of America said Sunday that they are terminating an agreement to hold the 2022 PGA Championship at the Trump National Golf Club Bedminster in New Jersey, citing the risk that its trademark is associated with Trump. The Trump Organization said the PGA’s decision was a ‘breach of a binding contract’.

People who were involved with the Trump organization said earlier that they believe that the polarized views of Mr. Trump will soften after leaving office. The riots in Washington in the waning days of his government make it less likely. Perhaps the rift in the IDP over Mr. Trump was formed, which could make Republican spending on his properties less likely. According to the non-partisan Center for Responsive Politics, political spending has risen to more than $ 24 million since 2015.

Companies including Shopify Inc.,

which online stores for mr. Trump operated, and Stripe Inc., which made payments for Mr. Trump’s campaign website also stopped working with Trump entities after the riots in Washington.

The White House referred a request for comment to the Trump Organization.

Eric Trump, who led the Trump organization daily with his father in the White House, said in a written response that the Trump organization’s debt burden is manageable in relation to its assets and that the company’s incredible opportunities estate and beyond . ”

“We have an amazing company with some of the best fixed assets in the world,” he said.

Especially the decision of the PGA is a personal blow for mr. Trump. People who know the family say the allure of hosting prestigious golf events was a big reason why Mr. Trump has invested heavily in golf clubs and resorts over the past few years, despite the weakness of the sector.

The Trump organization has two resorts in Scotland, where it has spent more than $ 150 million to buy and renovate the properties. The properties lost more than $ 4 million in 2019, the latest figures available.

The latest disclosure from the Office of Government Ethics has increased revenue from Trump enterprises to at least $ 446 million from 2019, slightly up from the previous year. Of that, more than $ 230 million comes from golf clubs and resorts, according to the announcement, while most of the rest is linked to commercial real estate and hotels, as well as the Mar-a-Lago private club in Palm Beach, Fla.

The Trumps tried to raise cash by selling some of the family’s most valuable real estate, with the highest prices. But the family is frustrated because the pandemic has increased property values ​​and caused the Trumps or their partners to withdraw.

The organization negotiated a sale of the long-term lease for its luxurious hotel in Washington, DC early last year, people said. Some of the people said the family initially hoped to raise as much as $ 500 million from a sale. That would have made it the most expensive hotel offer in Washington per room.

But negotiations came to a halt after Covid-19 traveled worldwide and caused hotel values ​​to plummet. The Trumps are putting the sales process on hold. JLL, the real estate firm that manages the sale process, said it is no longer involved in any sale.

“Our previous listing agreement with the Trump Organization to sell its hotel in Washington, DC, has expired and we no longer do business with them,” a spokesman said.

There is still a market for this iconic property located in the Old Post Office building, analysts say. But after the harsh criticism of the business community on Mr. Trump’s role in provoking the uprising at the Capitol, it is not clear whether the number of potential buyers who would be willing to join Mr. Trump for sale has not diminished.

The Trumps were also aiming to raise big funds through the sale of the two leading office towers in New York City and San Francisco. Vornado Realty Trust,

the controlling partner that owns the two skyscrapers with the Trumps, hoped to sell the buildings for a total of $ 5 billion, say people familiar with the matter. But in November, Vornado decided to end the sales process and instead refinance the office towers.

The Trump organization can still benefit from Trump’s unfounded allegations of widespread voter fraud, which fueled the uprising in Washington. In the weeks after the election, the Trump campaign and the Republican National Committee reported that they had raised more than $ 200 million, a substantial war chest that could fuel further spending on Trump properties in the coming years.

Some of the money ends up with a leadership committee appointed by Mr. Trump was introduced in the last days of the election campaign, called Save America, which could serve to kill Mr. To fund Trump’s future political activities. Such committees have a wide range of their contributions. Funds can be used to fund Trump’s trip, including his company plane, and events at Trump properties.

Write to Brian Spegele at [email protected] and Craig Karmin at [email protected]