WASHINGTON – A day after the New York Times story about President Donald Trump’s Chicago hotel and tower financial woes — and how he outmaneuvered his lenders and avoided taxes — the president struck back Wednesday in a tweet.
“As a developer long ago, and continuing to this day, the politicians ran Chicago into the ground,” Trump tweeted. “I was able to make an appropriately great deal with the numerous lenders on a large and very beautiful tower. Doesn’t that make me a smart guy rather than a bad guy?”
Trump eagerly bought the squat battleship Chicago Sun-Times building, 405 N. Wabash Ave., to build a mixed-used high-rise: a hotel, condos and retail. Trump liked the location, along the Chicago River, just off Michigan Avenue, where the higher floors would have Lake Michigan views.
The Sun-Times moved out in 2004. Trump and his family attended the topping off of the 92-story structure in 2008.
As a developer long ago, and continuing to this day, the politicians ran Chicago into the ground. I was able to make an appropriately great deal with the numerous lenders on a large and very beautiful tower. Doesn’t that make me a smart guy rather than a bad guy?— Donald J. Trump (@realDonaldTrump) October 28, 2020
More background: The Trump International Hotel & Tower, 401 N. Wabash Ave., was finished as the economy was collapsing in 2008. To this day, the Trump operation has never been able to rent the oddly shaped retail space fronting the Chicago River.
New York Times headline that sums up story: “How Trump Maneuvered His Way Out of Trouble in Chicago - When his skyscraper proved a disappointment, Donald Trump defaulted on his loans, sued his bank, got much of the debt forgiven — and largely avoided paying taxes on it.”
Key paragraphs from the Times’ story: “For Mr. Trump and his company, the Chicago experience also turned out to be something else: the latest example of his ability to strong-arm major financial institutions and exploit the tax code to cushion the blow of his repeated business failures.
“The president’s federal income tax records, obtained by The New York Times, show for the first time that, since 2010, his lenders have forgiven about $287 million in debt that he failed to repay. The vast majority was related to the Chicago project.
“How Mr. Trump found trouble in Chicago, and maneuvered his way out of it, is a case study in doing business the Trump way.”
Trump used losses he claimed from the project to “wipe out” money owed on taxes, the Times said. In blame-shifting, Trump also sued one of his top lenders, Deutsche Bank, accusing the bank of sparking the financial crisis and engaging in “predatory lending practices.”
Besides Trump tax returns obtained by the Times, the reporters on the story - David Enrich, Russ Buettner, Mike McIntire, and Susanne Craig - used information on loan documents on file with the Cook County Recorder of Deeds. Trump created two companies for the project: 401 North Wabash Venture and the parent, 401 Mezz Venture.
Analysis of Trump tweet
• Re: “the politicians ran Chicago into the ground.” That wasn’t the tune Trump was playing while he developed and marketed the project, or what he claimed when he sought breaks on his local property taxes from Cook County officials.
Rather, it’s a continuation of the hits Trump has been directing to Chicago –and other Democratic run cities - which is a part of his bid for a second term. Ironically, Trump by his own actions has devalued his “brand” in Chicago.
• Re: How Trump was able to make a “great deal with the numerous lenders on a large and very beautiful tower. Doesn’t that make me a smart guy rather than a bad guy?”
Well, it depends on which side of the deal you were on — Trump or one of the lenders. In any case, the Times story, which detailed how Trump’s Chicago project would have failed if not for his ability to pressure his lenders to take losses – must have struck a nerve, given the defensive tone of the tweet. Trump is very sensitive to the suggestion that he is a failed, not so great real estate developer.
Where things stand now: The Chicago Sun-Times reported in July the Trump tower condo prices “are their lowest since the Great Recession of 2008 and its attendant housing bust. … Protests in front of the Trump building almost every other day can’t be good for the prices therein.”
What’s next: The Times said even with declining revenue and multiple maneuvers, the Trump International Hotel & Tower still owed Deutsche Bank millions of dollars due to be paid in 2023 and 2024.