Trump Tower In Toronto Is Up For Sale And Facing Legal Woes
STEVE INSKEEP, HOST:
We have an update now on the business empire that President Trump still owns. His personal interests, which stretch from New York to India and beyond, include the Trump International Hotel & Tower in Toronto. It opened in 2012, a 65-story building - and it has not done well. It's in receivership and up for sale. Investors have lost millions and have sued Donald Trump as well as the hotel's developers. NPR's Jackie Northam reports from Toronto.
JACKIE NORTHAM, BYLINE: I'm standing outside the Trump International Hotel & Tower in Toronto at 325 Bay Street, in the middle of the city's financial district. Think of Bay Street as Canada's answer to Wall Street. But the hotel's entrance is actually around the corner. So instead of seeing a grand facade bearing the Trump name, what I'm looking at from the Bay Street side is a loading dock.
This is just one of the many miscalculations that have undermined the Trump Hotel and Tower since even before construction began in 2007. Back then, Toronto did not have a five-star hotel, and there was a growing demand for hotels with lots of granite and marble, fine linens and luxurious spas and restaurants.
SUSAN PIGG: It looked great at the time because it was such a novelty for the city. Trump was a big, big name.
NORTHAM: That Sue Pigg. She's a former real estate reporter with The Toronto Star and covered the saga of the Trump Hotel.
PIGG: It looked like it would be a huge success. But the whole thing was doomed to failure.
NORTHAM: Pigg says the hotel and tower project was developed by Talon International, run by two Russian-Canadian entrepreneurs, Alex Shnaider and Val Levitan. Neither man had experience in hotel operations or construction, so Toronto City Councilor Josh Matlow says it's not surprising there were problems with building the soaring glass tower.
JOSH MATLOW: There were parts of the building itself that fell down onto the street and actually shut down parts of our downtown because there were concerns about the structure's integrity.
NORTHAM: The developers signed a licensing agreement with Donald Trump similar to other hotels the president has been involved in. Trump has no ownership stake in the Toronto building. But his company, the Trump Organization, has a long-term management contract for the property. And Trump licenses his brand, his name, for a fee. Here he is pitching the hotel on a PR video.
(SOUNDBITE OF VIDEO)
PRESIDENT DONALD TRUMP: You just have the finest fixtures. You're going to have something that has never been done in Canada before - and very rarely anywhere else.
NORTHAM: Investors bought timeshare-style units in the tower that could be rented out by the hotel. They claim they were promised sky-high occupancy rates and returns on their investment. Those never panned out. Collectively, the investors lost millions of dollars. Toronto lawyer Michael Wine represents 27 of them. Many are members of Toronto's Korean community who spoke very little English.
MICHAEL WINE: And I remember asking them through interpreters - why'd you invest in this? And all they said back is Trump - Trump, "The Apprentice."
NORTHAM: Wine says his clients felt the sales pitch misrepresented the project. He said they looked at the glossy brochures. They knew about Trump buildings elsewhere and thought he had the Midas touch.
WINE: He's splashed all over the marketing, so my clients thought he was building the hotel because he certainly gives you the impression that it's his hotel.
NORTHAM: Wine's clients sued Trump and the developers. A lower court threw out the suit. But an appeals court ruled that the lawsuit could proceed. The Trump Organization maintains President Trump is not liable because he never signed a contract with the investors. If the lawsuit does proceed, it may be difficult for investors to recoup their money. The Trump Hotel is now in receivership and up for sale. It's going for about $300 million dollars.
UNIDENTIFIED MAN: Hello. How are you?
NORTHAM: Despite the financial and legal woes, the intimate ground floor bar at the hotel has a steady stream of customers - businessmen and beautiful women and a smattering of tourists drawn in by the Trump name. That name may be pulled off the building once it's sold.
Jackie Northam, NPR News, Toronto. POST-BROADCAST CORRECTION: In the audio, as in a previous Web version, we misstate Toronto lawyer Mitchell Wine's first name as Michael.
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