Trump's Hole?

Rubislaw Quarry in Aberdeen, Europe’s largest man-made hole, is on the market for £30,000. Perhaps the Donald will buy it and turn it into 'the world's greatest water feature'

Not Trumptown but Trumpcountry....

According to The Donald's man about Scotland, George Sorial, not content with building the world's greatest golf course and a hotel and hundreds of houses it appears that Team Trump are to buy Scotland. At least that's what The Scotsman is implying with it's headline – First Menie, next Scotland – Trump expands. According to Sorial, the managing director for international development at the Trump Organisation,

"I can't comment specifically on anything. However, we have been and are looking at a number of distressed properties in Scotland, in the UK, in Europe and globally. There are several very attractive projects right now in Scotland where we have ongoing discussions. They are in the areas of our core business – homes, hotels and leisure resorts. It can be situation where a developer has got in trouble with the banks, or where a developer simply has run out of money and doesn't have the funding to bring a project forward. We have said over and over again that, although there are some very obvious problems with the global economy, there are plenty of opportunities out there for a developer with a good cash position."

Don't you just love the Trumpies. They think we dim enough to buy this kind of b/s. Pound to a penny nothing of the kind is happening in Scotland. It's the business equivalent of a deflector shield. Somethings afoot in Trumpworld.

Trumptown Update

The Donald appears to be at it again. This time according to Fan Hitter he's blocking access to the Menie estate. Local councillor Debra Storr said "I received a complaint yesterday and immediately investigated. I found that gates into the estate were closed and locked at all the main accesses and that many local residents were worried that they would no longer be allowed access to the estate and beach.

Folks, it's only going to get worse. . .

The Menie Trumpet

This just in from the San Diego Union Tribune.

Nearly 70 plaintiffs who invested millions of dollars in the Trump Ocean Resort, a planned luxury oceanfront development in Baja California that was never built, are now suing Donald Trump, his son and daughter, and the project's developers on a fraud claim.

The lawsuit was filed yesterday in Los Angeles Superior Court. It alleges, among other things, that buyers who put down deposits on the planned development's 526 condo-hotel units were deceived into believing they were buying into a Trump development when the Trump name was merely licensed by the developers.

Included among the defendants are Trump, Donald Trump Jr. and Ivanka Trump, as well as principals of the project's Los Angeles-based developers, Irongate Development, its partner company Punta Bandera Investors USA, and its real estate brokers S&P Destination Properties.

Among the 41 causes of action listed are allegations of fraudulent inducement, negligent misrepresentation, deceit and breach of fiduciary duty.

Tricked into buying into the development when all they had done was license the Trump name? Perish the thought!

World Class Golf Resort in the Rough

. . . and no it's not the Donald's

The multi-million pound celebrity golf resort on the Ury Estate, near Stonehaven is under threat as the Edinburgh-based FM Group of companies, which includes the firm behind the golf course project, FM Developments, has called in the administrators..

Jack Nicklaus had been due to open a £40m ‘world-class’ course in time for 2010 season; it’s Nicklaus that has designed the course. According to the administrator "We're firmly committed to exploring the future options available for the group's developments and in particular the ambitious plans for the Ury Estate and its proposed Jack Nicklaus Signature golf course. The Ury Estate is a stone’s throw from the Donald's ‘billion-pound’ development.

The Trouble For Trump

It's simple really. The Donald's business model is to get people to stump up the money and call whatever they're doing Trump – Trump towers. Trump casinos, Trump resorts etc. Trying to get to the bottom of where he has his money invested is difficult. Certainly the demise of the casino business has cost him dearly but what about the other projects around the world? The slowing of work on the New Orleans project, the apparent problems in Dubai and several other difficult situations do nothing from brand Trump.

When it comes closer to home who exactly are the people who are going to be putting up the money to build, 'the world's greatest golf course'? Will they now be thinking again about digging deep into their pockets to fund the scheme? This despite the protestations of Team Trump that, "The money is there, ready to be wired at any time. If we needed to put the development up tomorrow, we have the cash to do that. It is sitting there in the bank and is ready to go."

Does anyone seriously believe it in the current climate? What's more how bad is the damage to the Trump brand are this week's events? Naturally the Donald is having none of it, his brand is “stronger than ever” and that “sophisticated people understand that the casinos were a very small portion of my net worth and I had nothing to do with the management of the company.”

I wonder what the Scottish Government think now about throwing themselves at the Donald like school girls trying to get close to some X-factor winner, hoping that some of the charisma will rub off. What about those 500 houses? The hotel and all the jobs that were going to come flooding into Scotland as a result of the Donald deigning to come home to the mother country to spread some of his largess? On his web site it opens with a big sounding splash that says 'Welcome to the world of Trump.' Some world!

Oh Dear What Can The Matter Be? Trumptown Latest.

Back in November 2008 the man who runs Billionaire Donald Trump's Scottish operation said that he had a billion £. "The money is there, ready to be wired at any time. I am not discussing where it is, whether it is in a Scottish bank or what, but it is earmarked for this project. If we needed to put the development up tomorrow, we have the cash to do that. It is sitting there in the bank and is ready to go."

Well there's news this morning that might make that a little more difficult to believe. According to Reuters. "Trump Entertainment Resorts Inc , Donald Trump's casino group, is expected to file Tuesday for bankruptcy, The Wall Street Journal reported. The company's board was scheduled to meet late Monday night to decide whether to authorize the filing, the newspaper reported in its online edition. Otherwise, the casino operator would be forced into bankruptcy involuntarily by creditors, the newspaper said."

Unfortunately the timing of this little financial worry could not be worse. The Donald is about to start a new season of the Apprentice on American TV. Perhaps he'll fire himself? Oh he already has...

Because the Donald is no longer at the helm of his troubled casino operator – at the weekend he resigned. The resignation followed weeks of negotiations with bondholders to restructure debt. Apparently Trump could not come to terms with the company’s creditors in seeking to refinance $1.25 billion in debt owed by Trump Entertainment. He said bondholders would neither sell the company to him nor accept his offers to repay existing debt. “I strongly disagree with the bondholders’ decisions and actions. Part of the reason that these bondholders can’t make a deal is… they’ve lost so much money on this deal, and they’re probably going to lose so much money on other deals, that my impression is they don’t care.”

Trump who controls over a quarter of the company's stock has seen the value of his shares crash to around 25 cents each from $4 a year ago. Will this make him a nearly billionaire?

Bloomberg are reporting that Trump’s exit from the gaming company may endanger the sale of the Trump Marina Casino to Coastal Marina, a deal already entangled in financing problems. Trump Marina’s price had been lowered to $270 million, still quite a bit of cash for the cash-starved company.

Of course this is not the first time. Back in the early 1990s he almost went to the wall when his Atlantic City casino, it too cost a billion (do all his developments cost a billion?) and was built with money from high-interest junk bonds ran into trouble. Such was the level of debt servicing that was required that it ate through most of his companies cash and almost finished him. Trump had to file for bankruptcy protection.

Meanwhile according to the Herald this morning. Gordon Dewar, the secretary of the Scottish PGA, last night revealed that he had made an audacious bid to lure Donald Trump, the US tycoon, to the Tartan Tour as a sponsor for the Northern Open. The 72-hole championship, one of the oldest professional events in Scotland, will still go ahead in May despite losing the financial backing of the anonymous benefactor who has bankrolled the 78-year-old tournament for the past four years.

"We have a number of sponsorship options that we are working on but we thought it was worth giving the Trump idea a go," admitted Dewar after receiving news that his bold move had failed.
It was a case of nothing ventured, nothing gained and we did receive a response thanking us for our inquiry but that nothing would materialise."

So where does this leave the development of the greatest golf course in the world? Naturally complex corporate financial arrangements are at play and the Donald's golf and construction empire will be totally divorced from his gambling empire. But, who would still like to bet on there being a billion in the bank just ready and waiting to finance the Menie project? It's all pretty hair-raising

Trumptown Latest....

I've been a bit busy which has slowed the flow of blogging just lately but I just spotted this. "Sir Sean Connery has already agreed to conduct a ceremonial tee-off to mark the opening of the development, which is expected to be ready in 2010."

Really?.....2010?

The Donald To Withdraw?

Amidst the pen to paper world in which I seem to be living currently – well digit to plastic to screen world – I couldn't let this little gem pass. According to press reports, BILLIONAIRE Donald Trump, The Donald to the rest of us, has threatened to ditch his £1 billion Scottish golf development over the slow progress of his controversial plan. Apparently he's "sickened" by the slow pace of the planning system. His son, The Eric, was in Northern Ireland last week viewing alternative sites. So will the five-star 450-bedroom hotel, 960 time share apartments and 500 private houses go ahead? Perhaps this is the beginning of a strategic withdrawal by the Donald, no doubt the billion pounds that is just sitting in that bank waiting to be spent is giving him itchy feet.

But wait.....The Donald has asked for time to repay the £430 million loan on the 92-storey Trump International Hotel and Tower, according to the Wall Street Journal. Sales in the partly finished tower - the second tallest in America, ‘have come in below original estimates' and the project’s current projected revenue remains short by over £67million, due to the ‘unprecedented financial crisis.’ So why doesn't he just use the £Billion in the bank? Is it all starting to unravel?

The Developer's Club

According to Stewart Milne, Chairman and CEO of the Stewart Milne Group in a letter to the Scotsman. "The social and economic benefits to be derived from this project are of national rather than just local importance. This development will be a tremendous asset and source of pride for Aberdeen and Scotland for many generations."

Now you might be surprised to know he's talking about The Donald's project. Quite how a housing estate and a golf course will provide "social and economic benefits of national importance" I'm at a loss to see. The level of rhetoric surrounding this whole affair is being cranked up to bursting point, following Trump's man's assertion that there's £1 million in cash in the bank just waiting to be spent.

Mr Milne's company are house builders and they need to talk a good game on this subject. They too would probably enjoy the opportunity to build homes where the "economic benefit far outweighs the environmental concerns." Mr Milne finishes by saying "(Aberdeen) will gain comfort from the commitment of the Trump organisation, which will do its utmost to make this work for the benefit of us all."

That's all of us in the developer's club. It's still the wrong idea for the wrong place.

Billionaire Trump has a Billion

So there we have it. According to the man that runs the Donald's Scottish operation he has one billion pounds, not one billion $, but a billion £, just sitting in the bank ready to fund the building of the world's greatest golf course and a small town in Aberdeenshire. According to Mr Sorial: "The money is there, ready to be wired at any time. I am not discussing where it is, whether it is in a Scottish bank or what, but it is earmarked for this project. If we needed to put the development up tomorrow, we have the cash to do that. It is sitting there in the bank and is ready to go."

Have you ever heard such guff? Ready waiting to be wired to whom exactly? No one person is building this thing, no one organization will be in receipt of the money; it is a properly (we hope) funded and costed project with a whole raft of suppliers and companies that will be involved. Of course it's all bluff and bravado, because there are hints that all is not good in the trump empire with at least one law suit against one of his developments.

Let's not forget the Government's involvement in all this, a set of circumstances that may still come back to haunt them and the project. I can just see it all becoming a touch unravelled and the Government having to step in to save the project. . . with our money of course.

And another thing. . . it's one thing having the money to build the thing but you've also got to sell it Mr. T.

There May Not Be Trumptown Ahead

Reading the papers this week and watching the BBC news you'd be forgiven in thinking that The Donald had already begun building his homes and his golf course. You'd be forgiven in thinking that the Donald had dug deep in his big pockets and pledged millions of his billions to start the project - possibly tomorrow week. Now we know he's said that he's own his way to start "securing the dunes" and to begin work on the "greatest golf course in the world", but is he? Check around the world to see how some of Trump's other projects are going and it's not all going to plan. Think again about just how much of his money is going to be invested versus how much is going to be invested from others? Is it going to be so easy to kick start this project with free flowing investment into Billionaire Trump's company?

This is what the Trump website says about his Scottish development.

"A dramatic golf destination will soon grace the North Coast of Scotland. Welcome to Trump International Golf Links. Resting on 1,400 acres of sand dunes and rolling bluffs, the property will surely become one of the finest golf destinations in Europe. Two championship golf courses will boast Martin Hawtree Signature designs, backed by a state-of-the-art golf academy and a distinctive five-star hotel. The 1,400-acre property also offers three miles of sparkling, white sand beaches, a mixed-use residential community and the unmistakable beauty of Aberdeen, Scotland.'

Fascinating. . .

Also don't lose sight of the fact that yesterday casino operator Trump Entertainment Resorts reported quarterly losses as the economic slowdown continued to hit the gambling industry. The company, chaired by The Donald, reported a net loss of $139.1 million, compared with a profit of $6.6 million in the third quarter last year. Its 21 highest-paid employees have agreed to a voluntary 5 per cent pay cut.

Never forget Trump is a brand, thank God the BBC have stopped referring to ‘his people’ as 'Team Trump'. Nevertheless every time his name is mentioned it’s preceded by the word – billionaire, in order to make us all believe that here is a man who can do no wrong. Of course that’s not quite true. Back in the early 1990s he almost went to the wall when his Atlantic City casino, it too cost a billion (do all his developments cost a billion?) and was built with money from high-interest junk bonds ran into trouble. Such was the level of debt servicing that was required that it ate through most of his companies cash and almost finished him. Trump had to file for bankruptcy protection.

Since then it’s true that his building projects, many of which are called ‘The Trump International Hotel and Tower’, followed by the name of the place where they’ve been built, seem to be successful. However, that too is not entirely true. Several in the USA are struggling and may not make money. On another there are a number of lawsuits pending. Now of course these are the everyday occurrences in the world of mega business where it’s not all about profit, there’s always a cost line and not everything the Donald does is a certainty.

Trumptown Latest - Wrong Idea, Wrong Place and Wrong Time

Apparently the Donald will know within four weeks whether his dream of building the "world's greatest golf course" in Scotland will become a reality. John Swinney, the secretary for finance and sustainable growth has taken delivery of the report from Scottish Government planning reporters following a four-week inquiry into the tycoon's proposals to develop a £1 billion golf resort at the Menie Estate in Aberdeenshire.

Even if the answer is yes can anyone see this going ahead? In the current or foreseeable climate there's not going to be the investment money around for Trump to build his dream. What? He doesn't use his own money? Of course he doesn't, it's investors who stump up the cash. So all that will have happened is it's probably cost us tax payers a million or so pounds to pay for an enquiry and for what? It always was the wrong idea in the wrong place, now it's the wrong time as well.

The Ego May Not Have Landed But Has Spoken

Such is the self-belief of the Donald that he thinks that his golf is more important than just about anything and everything. Yesterday he threatened that “"If we were to be refused permission to develop on the southern end of the SSSI, I would withdraw from this development because it would not and could not fulfill my vision of doing something outstanding. I have always believed that if you cannot do it well you should not do it at all. I am at a point in my career that if it is not going to be the best, I would not want to build it."

Now wouldn’t we all at times like to do what we want to do, but life and the planning process are just not like that. However, his threats are clearly being made to get the planning process pointing in his direction. It’s the back nine of the golf course that is scheduled to be built on the SSSI area of sand dunes. Trumps view is that his course is close to perfection and any changes will ruin it. Clearly there are others that believe just the opposite.

Most telling of all is the fact that the Donald says, “Such will be the quality and reputation of the course and the associated resort it will benefit Scotland as whole.“ This is where you begin to question him and you certainly see the pressure that’s placed on the enquiry. It’s all about how good it is for Scotland and this is what has driven this thing from the outset. Somehow our politicians are psyched into believing that if we say no then Scotland will somehow start going backwards and inward investment will cease. It beggars belief that anyone can take seriously the fact that his course will be so much better than all of our existing golf courses, eclipsing them and somehow transform Scotland’s reputation for great golf courses. How many more people will come to Scotland to play golf because of Trump’s course than come already? I doubt it will be very many.

It’s debatable that Trump’s course will develop the reputation as the best golf course in Scotland and one of the best in the world in his lifetime – is it likely to host the Open Championship in the next thirty years? However, the associated housing development will have made the Donald huge amounts of money and that is what’s behind this whole affair.