How did a young Miami financier snatch a hotel away from Donald Trump?
MIAMI – Seven years ago, when the skeleton of the building that was to be the Trump Ocean Club had risen only 62 of its planned 70 stories, one of the developers gestured to it grandly and boasted to a reporter from Time Magazine: “When you think of Paris you think of the Eiffel Tower, and when you think of Panama, you are going to think of this building.”
That prophecy has at last been fulfilled, albeit in a manner quite unexpected. In a weird business coup that played out in full view of a wide-eyed world press earlier this month, President Donald Trump’s signature overseas hotel was seized from him in a business coup plotted by a brash young kite-surfing financier based in Miami Beach.
Armed with a Panamanian court order and a band of workmen with crowbars, 39-year-old Orestes Fintiklis took over the hotel and had Trump’s name torn off the wall following 10 days of public confrontations and even shoving matches between rival squadrons of lawyers, security guards and corporate suits.
“Panama is a crazy place, and we’ve seen plenty of crazy things, but nothing like this, ever,” said a former senior official in the Panamanian government (who didn’t want to be identified: “Leave me out of this, far out of this.”) “An American president losing a hotel to some young guy nobody ever heard of, even in Panama, this is an amazing event.”
Technically speaking, practically everything in the three preceding paragraphs of this story deserves an asterisk. Trump personally hasn’t been involved in the dispute; his company, The Trump Organization, (which he still owns though a trust, but whose management was turned over to two of his sons when he became president) was.
And the squabble is not over title to the hotel, which Trump’s company never held, but the lucrative contract to manage it. The Trump Organization seems to have lost that, at least temporarily: A Panamanian court put the contract in the hands of a neutral third-party company, and by the end of last week the hotel had a new name, The Bahia Grande, and a website that bragged it had “one exciting change – we’re under new management.”
The legal feuding over the management contract continues in Panama’s court system, where it may drag on for years, and Trump’s company could well wind up winning the case. The company “remains fully confident that it will not only prevail, but recover all of its damages, costs and attorneys’ fees,” said Amanda Miller, the Trump Organization’s senior vice president for communication.
Even so, when workmen used crowbars to tear the letters T, R, U, M and P off the hotel, it marked the third time since his election that the removal of the president’s name has been forced by tenants of a building.
The new owners of what had been the Trump International Hotel & Tower in the Canadian business capital of Toronto announced last June that they had reached a deal to remove the Trump name. The hotel and tower’s original developers defaulted on their loan, and the property was sold last March.
The Toronto project suffered poor sales from its opening in 2012, and many of the original buyers are still in litigation against the Trump Organization, alleging inflated numbers.
And shortly after his 2016 election, the name Trump Place was removed from three Manhattan apartment buildings at the request of residents. Trump had not owned the buildings for quite some time, and agreements to keep his name had expired.
The case has also thrown the spotlight on Fintiklis, the Miami Beach real estate investor who ousted Trump. So low-key in South Florida that about the only public trace of him is a 2011 Broward County ticket for driving with an expired license plate, Fintiklis went after Trump in Panama with swashbuckling glee.
Fintiklis, a Greek Cypriot by birth, staged many of his confrontations with Trump Organization officials in the hotel’s luxurious 15th-floor sky lobby, where reporters could watch, and often celebrated victories (or mourned defeats) by playing jaunty Greek music on the lobby piano.
Many of the rooms in the hotel are actually condos that owners assign to the management company to be leased out. Fintiklis wrote to them that Trump’s company “continues to attach to our property like a leach, draining our last drops of blood” – then labeled the letter “Private & Confidential,” practically guaranteeing it would be leaked to reporters in Panama, where gossip often seems like the national sport.
Though he often bantered with reporters during his media-friendly ambushes of Trump Organization officials at the hotel, Fintiklis mostly dodged past any attempt at serious questioning, and he did not return phone calls from the Miami Herald.
Former colleagues say he spent 10 years working for the international real estate firm Dolphin Capital Partners, which has an office in Miami Beach that concentrates on Latin American properties, before striking out on his own about a year ago.
Colleagues say he was an officer in Cyprus’ army before graduating first in his class in the law school at Oxford in Great Britain.
“He has an extremely strong legal background,” said one. “He’s a very smart, very talented individual with a great personality. He’s also a very good pianist, a very good kite surfer, very fond of gourmet food and opera ...
“He’s an amazing guy, managing in the best way and doing all the right things. I’m very confident that he’s going to evict Trump from that hotel.”
The hotel – the first of his overseas development deals – looked like a canny investment when Trump got involved with it in 2006 as a kind of training-on-the-job project for his daughter, Ivanka. Located in Punta Pacifica, the most chi-chi neighborhood in Panama City, it was built on land reclaimed from the sea at a cost estimated to be 10 to 20 times greater than any of the city’s other skyscrapers.
Trump, however, didn’t do any of the actual building. He was paid $5 million just for the use of his name, then got commissions for any financing he helped arrange and any units that were sold. Other developers were in charge of construction. When the building was finally finished, in 2011, the Trump Organization got the management contract, worth several hundred thousand dollars a year.
But even though the condo units sold well, the development was mired in financial misadventure and allegations of dirty money flowing through its books. Several members of the sales force, many of them from Russia or former Soviet republics, fled to escape charges ranging from money laundering to murder. (Russians were among the primary marketing targets for the condos.)
Within months of opening on July 6, 2011, the hotel saw its bonds downgraded by Fitch Ratings, which voiced concern that buyers might not ever take possession of their units. One of the developers defaulted on the bond debt and in 2013 filed for bankruptcy.
On top of all that, the Trump Ocean Club was taking the same economic battering as the rest of Panama’s hotel industry. “Overall hotel occupancy is very low right now,” one Panamanian businessman said. “We’ve had a lot of overbuilding in that sector during the past decade, and it’s coming back to haunt them.”
Industry trade groups say the occupancy rates for Panama hotels have dropped by half over the past 10 years and now hover between 40% and 50%, with luxury hotels closer to the bottom of that spread. By some accounts, the Trump Ocean Club lost as much as $1 million last year.
Why Fintiklis would step into this seemingly gloomy financial landscape is something of a mystery. But he did, in August 2017. He bought 202 of the hotel’s 369 condo units (estimated cost: $25 million), making him the controlling owner.
Fintiklis issued a news release calling the Trump Ocean Club “an iconic property” and that he “looked forward” to working with the Trump Organization to make it “the premier hotel in the country and the entire region.”
But the honeymoon turned out to be a short one. In October, Fintiklis met with condo owners, told them that the hotel was horribly mismanaged and almost empty, and urged them to vote with him to fire Trump’s company. They soon did.
That quick rhetorical turnaround from “iconic property” to “virtually empty” makes some Panamanian businessmen suspect Fintiklis planned to oust Trump from the start.
“It’s kind of hard to believe (Fintiklis) spent all that money on a hotel without checking to see if anybody really stayed there,” said one, adding that the fire-sale price – “The hotel price was being quoted around town as $4,000 a square meter, but (Fintiklis) got it for $1,000” – was another obvious clue.
Trump Organization officials, while conceding that the hotel’s occupancy rates are low (though still much better than its competitors in the upscale market, they say), insist Fintiklis had all the data. They say they have a contract to manage the hotel through 2031 that can be ended only after submitting the dispute to arbitration. That will surely be one of the main issues to be resolved in court.
Meanwhile, many Panamanians seem disappointed that the daily soap operas in the hotel’s sky lobby have ended.
“I was over there for lunch yesterday,” said a lawyer, “and though some of the management guys looked a little grim, all the maids and waiters were just doing what maids and waiters do.” – MCT