Home ›› 30 Oct 2021 ›› World Biz
Former US president Donald Trump’s slashing rhetorical style and divisive politics allowed him to essentially take over the Republican Party. His supporters are so devoted that most believe his false claim that he lost the 2020 election because of voter fraud.
But the same tactics that have inspired fierce political loyalty have undermined Trump’s business, built around real-estate development and branding deals that have allowed him to make millions by licensing his name.
Trump’s business brand was once synonymous with wealth and success, an image that now clashes sharply with a political brand rooted in the anger of his largely rural and working-class voter base. His presidency is now associated in the minds of many with its violent end, as supporters stormed the US Capitol on Jan. 6.
Those searing images, along with years of bitter rhetoric, are costing Trump money. Revenues from some of his high-end properties have declined, vacancies in office buildings have increased, and his lenders are warning that the company’s revenues may not be sufficient to cover his debt payments, according to Trump’s financial disclosures as president, Trump Organization records filed with government agencies, and reports from companies that track real-estate company finances.
Prospective tenants in New York are shunning his buildings, one real-estate broker said, to avoid being associated with Trump. Organizers of golf tournaments have pulled events from his courses.
Trump’s focus on the political brand has increasingly overtaken his identity as a real-estate mogul, says one hospitality industry veteran.
“Prior to his political career, the Trump brand was about luxury - the casinos, the golf resorts,” said Scott Smith, a former hotel executive and hospitality professor at the University of South Carolina. “When he entered into politics, he took the Trump brand in an entirely different direction.”
Trump’s business also remains under the cloud of a joint criminal fraud investigation by the Manhattan District Attorney’s office and the New York Attorney General. The company and its longtime chief financial officer, Allen Weisselberg, have been charged with a scheme to evade payroll taxes, and investigators continue to probe whether Trump or his representatives committed fraud by misrepresenting financials
in loan applications and tax returns. Weisselberg and the company deny wrongdoing and are contesting the charges.
As his development business struggles, Trump has announced his first major deal since leaving office — and it has nothing to do with real-estate. On Oct. 20, he said he will build a new social media platform aimed in part at giving him a political forum after being banned by Facebook and Twitter, who said after the US Capitol riots that Trump used their platforms to incite violence.
That deal could prove lucrative for Trump regardless of whether the platform succeeds. Investors rushed to buy shares in Digital World Acquisition Corp , the publicly traded blank-check acquisition company that plans to merge with the newly announced Trump Media and Technology Group. Digital World shares surged and are now worth about $2 billion. Trump’s new media company will have at least a 69% stake in the combined company, but Trump has not disclosed his level of ownership in Trump Media.
Trump has also been raising money for his political operation, which reported having $100 million on June 30, as he hints at a 2024 presidential run.
Eric Trump, the former president’s middle son and a Trump Organization executive, said in an interview that the company is now in “a phenomenal spot.” He cited a refinancing of a loan on San Francisco office buildings that gave the Trump business about $162 million in cash, according to loan documents and a release by Vornado Realty Trust (VNO.N), the venture’s majority owner.
“We’re sitting on a tremendous amount of cash,” Eric Trump told Reuters. In an email, a spokesperson for Donald Trump denied that the business has slumped since he entered politics.
“The real estate company is doing extremely well, and this is evident in Florida and elsewhere,” Liz Harrington said in an emailed statement.
