Trump dumps Soho hotel after glitzy launch and 11-year slump
Image: Trump Soho; Donald Trump via Wikimedia Commons.
New York City has never, barring perhaps a short stretch of the go-go ’80s, been Trump country. But the Trump Organization’s high-profile Midtown properties blend with the area’s flow of international money and glamour-seeking tourists. Much further downtown, the Trump Soho condominium/hotel at 246 Spring Street has been at best a minor embarrassment in the neighborhood since the ambitious announcement of its birth on Donald J. Trump’s TV show “The Apprentice” 11 years ago. Now, what was launched as “an awe-inspiring masterpiece,” is being severed from the Trump fold, the New York Times reports. In addition to poor economic performance, the 46-story luxury hotel has attracted opposition from locals since its arrival, protests during Trump’s candidacy and scrutiny after the election due to its ties to a Russian dealmaker.
The Trump Organization announced Wednesday that it reached a deal with the property’s owners, California-based investment firm CIM Group (Like many properties that bear the Trump name, the Trumps don’t own the property; they manage day-to-day operations and get a cut of any revenue). The deal is essentially a buyout, with CIM paying the Trumps to bow out early, though the price of the buyout wasn’t disclosed.
The Soho hotel has struggled to keep up with cooler–but no less pricey–competition like The Mercer Hotel, Crosby Street Hotel and the members-only Meatpacking establishment Soho House (named for its London flagship in that neighborhood), and its condominiums have been sluggish performers as well in a neighborhood of trendy big-ticket developments. 6sqft reported last spring that the hotel had seen a sharp drop in bookings and an increase in layoffs.
Troubles have dogged the hotel from the start, including complaints from neighborhood organizations that the skyscraper would break zoning rules and the 2008 death of a worker who fell 42 stories in a construction accident. It was perpetually involved in litigation involving business partners. There was even a criminal investigation in 2011 that started with condo buyers who accused the Trumps and other defendants of inflating sales figures; the charges were eventually dropped. Another lawsuit claimed the hotel was backed by Russian financing via a felon and F.B.I. informant. The final blow may have been the hotel’s main restaurant’s closing in April, which the restaurant’s lawyer attributed to slow business “since the election.”
It is becoming clearer according to business records that the Trump Organization’s establishments fare better in areas that supported President Trump in last year’s election. In addition, the scrutiny of the family’s business deals since the election has derailed potential deals. Never ones to miss an opportunity to capitalize on the brand, the Trumps have recently launched an online store, TrumpStore.com, where hats and other golf gear emblazoned with the Trump name can be purchased for far less than a stay at the Trump Soho.
[Via NYT]
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Awful developers, bad operators, bad deal all around. CIM Group and TRUMP were actually made for each other. CIM Group has ruined the Sunset Strip in LA with awful new prison-style buildings that will be there for a century. They are notorious in LA for every bad development reason there could be… except donations to politicians. They rarely pay taxes, nor keep the promises that afforded them tax abatements to begin with. And then the accountability is awful. If they could design good architecture they might be forgiven… but again, no dice. And to think that the California Teachers Union “CalSTRS” is the largest (greedy) investor supporting all this bad behavior. (P.S. Don’t let the “divorce” headlines fool you… CIM & Kushner Properties are quite close “deal-making” friends now too.)
Boo hoo. Trump’ll benefit at the end of the day; the art of the deal, and all…..