Deposits totaling $32.2 million are lost in the collapse of the celebrity developer's hotel-condo project. SAN DIEGO — Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump.
The Southern California couple made a $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.
But admiration for the celebrity developer and star of "The Apprentice" has now turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million.
"I can't even stand to see Trump's face on TV," said Linda Drake, a psychologist whose husband is a commercial airline pilot and financial advisor.
Investors were told last month that their money was spent and that they wouldn't get a penny back. A single mother in suburban Los Angeles lost $200,000 and won't be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units, including two penthouses.
The project's collapse comes at a delicate time for Trump, whose casino company, Trump Entertainment Resorts Inc., filed for bankruptcy protection last month. He also is embroiled in a lawsuit to avoid paying debt on the struggling Trump International Hotel and Tower in Chicago.
Trump and his children heavily promoted the northern tip of Mexico's Baja California coast. He sold 188 units for $122 million the first day they went on a sale at a lavish event in a downtown San Diego hotel in December 2006.
"I went out and saw this site, and I was blown away by it," Ivanka Trump said in June 2007. "From the minute I saw it, it was a deal I had to do."
The location was a contrast to more-expensive Mexican coastal markets such as Puerto Vallarta, Los Cabos and Cancun, she said.
The Trumps remained buoyant even as the U.S. housing market began to crumble. Ivanka Trump assured buyers in an October 2007 newsletter that all Trump projects were immune to a slowdown.
"In characteristic Trump fashion, Trump Ocean Resort Baja will be the best of the best, and consequently always in demand," she wrote.
All that remains of Trump Baja is a highway billboard with a large photo of Donald Trump that advertises condos for sale. It hovers over a closed sales center and showroom, a paved parking lot, a big hole that cuts a wide swath, drainage pipes and construction equipment.
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Poster Comment:
This is how The Donald does bidnez.
