What Awaits The Trumps And Kushners When They Return To Their Real Estate Businesses
President Donald Trump's time left in the White House is down to a matter of weeks, and many are looking to what kind of plans the competitive, divisive leader may have for his business.
The Trump Organization, the family business the president turned into an international brand famous for building luxury skyscrapers and flirting with financial ruin, still owns hotels and golf courses across the country and licenses its brand around the world. Trump has maintained ownership of the business while in office and patronized his properties with the largesse of the federal government. Now the question becomes: What does he do next?
“Trump has an enormous challenge if he is hoping to shift his focus back to the real estate development market,” Northwestern University Kellogg School of Management Marketing Department Associate Chair Tim Calkins said.
Reports that Trump is plotting a political comeback in 2024 are circling, as are suggestions he has discussed preemptively pardoning his children and personal lawyer Rudy Giuliani.
This week, Politico reported that the commander-in-chief is already gearing up to resume deal-making overseas as a private businessman, throwing forth myriad unprecedented ethical questions. Meanwhile, legal probes are hanging over Trump and his company — chief among them the New York Attorney General’s investigation into whether he and the firm inflated values of properties on financial statements to score tax breaks and loans.
But one thing remains certain, real estate insiders said — a return to New York City real estate would be a challenging one and one the president is unlikely to undertake.
The Trump brand is now deeply polarizing, and a shift to focus on parts of the country where the president’s political base is strong could be in the cards.
“I think they love Palm Beach … If you asked me to bet, I would bet on that first,” Red Apple Group CEO John Catsimatidis said of where the Trump family may focus next.
The billionaire real estate executive, who owns New York grocery chain Gristedes, contributed at least $350K to the Trump Victory fund.
“They could come back to New York, but the question is, where do they feel most comfortable being and where do they want to be?" said Catsimatidis, who hosts a conservative talk radio show. "The Trumps and Kushners are tough people. They're not going to let anybody push them around.”
GFP Real Estate Chairman Jeffrey Gural said the Trump brand may be irreversibly tarnished in New York and other blue states.
“He really was able to take advantage of brilliant marketing of his brand ... That has changed dramatically, certainly in a blue state like New York where brand is probably a liability, I don’t know it will have that much effect on the Kushners,” he said. “If Donald is also going to be talking about running again, then people will be saying to themselves ‘Oh shit, we don’t want to do anything to help them here in New York.' He was not a friend of New York City and New York.”
There is no shortage of examples of New Yorkers actively turning their back on the Trump brand over the past few years. Trump SoHo became The Dominik in 2017 and saw its revenues jump after the rebrand. All traces of the Trump name were removed last year from high-rises he built on Manhattan’s Upper West Side, with one of the condominium boards taking the matter to the Manhattan Supreme Court after Trump’s company, DJT Holdings, claimed it was a breach of a licensing agreement. The residents had argued the name on the building caused a security risk.
Condo owners at Trump International Hotel and Tower at Columbus Circle argued last year the name was pulling down their property values, and the signage was tweaked to use the building's address, 1 Central Park West. When the election was called for Biden last month, an impromptu celebratory dance party broke out just steps from that building.
Trump's allies doubt it would be a universally negative reaction when Trump decides to set foot in the city again.
“I'm sure he can get a reservation at any restaurant,” Catsimatidis said.
The challenges go far beyond public relations. The Trump Organization has more than $400M in debt coming due in the next handful of years, The New York Times reported, citing Trump’s tax records.
Trump described the debt in an NBC Town Hall ahead of the election as “a peanut." Meanwhile, like much of the hospitality sector, the coronavirus pandemic has taken its toll on Trump Hotels. At Trump’s hotel in Chicago, the hotel’s managing director predicted it could be nine years before operations returned to 2019 levels, The Washington Post reported in October.
In April and May, the Trump Organization’s resorts and golf courses laid off more than 1,000 people, according to The Real Deal.
It is not just debt that is said to be weighing on the Trumps. The New York State Attorney General’s office is looking at whether the Trump Organization committed tax fraud. An October court filing showed the investigation is zeroing in on four properties: the office building at 40 Wall St., the Seven Springs estate in Westchester, a Los Angeles golf course and the Trump International Hotel and Tower in Chicago.
New York Attorney General Letitia James has lodged a lawsuit to force Eric Trump, who is running the company while his father sits in the White House, to comply with a subpoena. (The Trump Organization says Eric Trump will not adhere to the subpoenas, citing constitutional rights.)
Meanwhile, the Manhattan district attorney, Cyrus Vance Jr., is running a criminal investigation into the Trump Organization, which is independent of the state attorney general. Both inquiries have issued subpoenas, looking at how the president may have reduced his taxable income through consulting fees, some of which seem to have been paid to his daughter Ivanka Trump, The New York Times reported last month.
Trump has described those investigations as politically motivated “witch hunts” and Ivanka Trump tweeted the probe was “harassment pure and simple.”
Certainly, the next move of the first daughter and her husband, Jared Kushner, whose father, Charles, has been running Kushner Cos., is also the subject of great scrutiny. Some question if Ivanka Trump is maneuvering a run for office, or if the couple hopes to return to their home in New York and the Manhattan social scene or to a residence on Trump’s Bedminster golf course.
Others predict they will head to Florida — comedians recently posted “not wanted” posters of Ivanka around Manhattan, while the Republican anti-Trump Lincoln Project paid for a billboard in Times Square of an edited picture of Ivanka Trump smiling next to the total virus fatalities in New York and the country.
She and her husband threatened to sue over the signs.
Calls and emails to the Kushner Cos. were not returned. The press email on the Trump Organization website bounced back.
Trump Hotels Executive Vice President Kathleen Flores declined to comment on the family’s future to Bisnow, and she noted that until the virus hit, Trump Hotels had been experiencing record years.
“The Trump brand has changed radically during his time as president," said Calkins, who teaches branding at Northwestern. "Prior to the presidency, the Trump brand stood for luxury and glitz in a certain amount of flash and flair, but as Trump became president the brand became much more polarizing.”
That polarization is a huge problem for the brand, he said. He said the situation is unprecedented — never before has a brand tried to straddle politics and business in quite the same way. While the Trump brand is divisive now, he expects the impact on the Kushners will not be quite as severe.
“If Kushner wanted to get a meeting with someone, they’d probably take the meeting, you know, purely because it's a strong enough name that people will be intrigued,” he said.
Still, Calkins has been surprised by the president's approach in recent weeks, adding he would have expected him to try and make his brand less divisive, rather than questioning the results.
“If he were hoping to go back to focus on business ventures, you would think he would try to soften the brand and broaden its appeal,” he said. "He certainly doesn't seem to be focused on that at the moment."
Attorney General William Barr said this week there is no evidence to support the allegation of widespread voter fraud. The Trump campaign team has filed multiple lawsuits alleging illegalities at polling sites, which have been routinely dismissed by judges for lack of evidence.
Biden earned 306 electoral votes to Trump’s 232 as states around the country certify their election results. The president released a video this week claiming, without evidence, the electoral system is under “assault and siege." Both Facebook and Twitter placed warnings on the video statement.
“You are not going to see people paying to have [his] name on a building. That I know for sure,” said Gural, a Manhattan property owner and former chairman of Newmark. “His brand is damaged in New York.”