Trump NY properties in play at fraud trial
The $250 million civil fraud trial of the Trump Organization, which began with great acclaim this week in a Manhattan courtroom, will bring Trump’s Hudson Valley holdings back to public prominence.
Yet to be decided is whether the Trump Organization will continue to own and operate three major holdings in the region: Trump National Golf Club in Briarcliff Manor; Trump National Golf Club Hudson Valley in Hopewell Junction; and the historic Seven Springs estate in Bedford, North Castle and New
Castle.
These three facilities were part of the case brought by state Attorney General Letitia James, who alleged that the Trump Organization had wildly exaggerated the value of its holdings in its statements of financial condition that are used by lending institutions when determining whether to approve loans.
Supreme Court Justice Arthur Engoron in late September ruled that Trump committed fraud with his exaggerated valuations of Trump Tower in Manhattan, Mar-a-Lago in Florida, Seven Springs, as well as his golf courses, including those in the Hudson Valley.
The non-jury trial, which is expected to grind on until sometime in December, concerns six remaining claims, which include how much the Trump Organization will owe in penalties to New York state. James is seeking $250 million and a ban on Trump doing business in New York.
That could impact Trump’s golf courses in Briarcliff and Hopewell Junction. It could also determine the fate of
Seven Springs, the sprawling estate that covers more than 200 acres where Trump first proposed a world-class golf course and luxury housing development. Rebuffed on his golf course plan, Trump scaled back to a much-smaller luxury home development.
That too failed to get off the ground in several iterations, with approvals for the final seven-lot subdivision in Bedford never finalized. That led Trump’s decision to put much of the land under a conservation easement in 2016.
Trump, the leading candidate for the Republican nomination for president in 2024 who faces four indictments on state and federal charges, appeared in court on the first two days of the trial. There, he has engaged in his trademark political theater outside of the courtroom, assailing the judge and the entire legal process.
“This is a judge that should be disbarred,” Trump said on Monday. “This is a judge that should be out of office. This is a judge that some people say could be charged criminally for what he’s doing. He’s interfering with an election, and it’s a disgrace.”
In Briarcliff Manor, Mayor Steve Vescio said he’s concerned about Trump losing control of the course, which the former president bought from the struggling Briar Hall Golf and Country Club for $7.5 million in 1996. After the investment of a reported $45 million in redesigning the course and building a new clubhouse, the new Trump National was unveiled in 2002.
Vescio, whose father, William, clashed with the Trump Organization while village mayor from 2004 to 2015, said he’s concerned that another entity might not maintain the course at the same high standard as the Trump Organization.
“There was a long approval process for the new course, and Trump reacti
vated a site that had been neglected,” Vescio said. “They have taken good care of the property, and have worked well with the village. They’ve been a good neighbor.”
Seven Springs
Seven Springs figures prominently in the civil fraud case brought by James. The 60-room estate, built in the Georgian style, was the summer retreat for Eugene Meyer, the first president of the World Bank, and publisher of the Washington Post.
The estate
County lore.
In 1996, just a year after Trump bought the 60-room mansion and land for $7 million, he hosted a masquerade ball attended by hundreds to promote the candidacy of Westchester County District Attorney Jeanine Pirro, who came attired as Queen Isabella. (Disclosure: This writer covered the event, attired
is
rich
in
Westchester as Clark Kent, with dark glasses, a fedora, and suit jacket over a leotard with an “S” sewn on.)
In 2009, Libyan dictator Moammar Ghadafi’s staff worked out a deal to rent its spacious lawns to erect a tent to house the Libyan delegation for Ghadafi’s address to the United Nations General Assembly. But an uproar ensued, and Trump dashed the plan.
Engoron’s Sept. 26 decision details the wide-ranging valuations at Seven Springs. In 2000, the Royal Bank of Pennsylvania appraised the property at $25 million, if it were to be converted to residential development. Six years later, a new appraisal by the bank upped the value to $30 million.
By 2012, an appraisal for Trump pegged the value of a six-lot subdivision in the New Castle portion of the estate at $700,000 per lot. By 2014, Cushman & Wakefield determined that the land was worth $30 million if Trump developed all 24 lots. The company upped that value to $56.6 million in 2015.
Yet Trump reported Seven Springs’s value to be $261 million in reports in his financial statements from 2012 to 2014 and increased it to $291 million in 2014.
Engoron said that demonstrated Trump had fraudulently inflated the value of Seven Springs.
“Even giving defendants the benefit of the $56.6 million figure as of Dec. 1, 2015, the value submitted on Donald Trump’s 2014 SFC was inflated by over 400%,” Engoron wrote.
Trump golf courses
The Trump Organization’s golf courses are also featured in the case.
Engoron found that from 2013 to 2020, Trump’s financial condition reports included a premium of 15% or 30% premium on value, based on the Trump brand, on seven golf courses, including Trump National Hudson Valley in Hopewell Junction.
At Trump National in Briarcliff Manor, Trump in 2014 valued the golf club portion at $16.5 million when it was considering donating a conservation easement. Yet that same year, the club’s value more than tripled to $73 million in his financial condition report.
Trump’s legal team had argued that his appraisers had used a “fixed assets” approach to valuation in the higher value, with included what Trump spent to acquire and maintain the property. But Engoron found such a valuation was “false and misleading.”
“The price for which you purchase property is not necessarily the price for which you can sell it,” he wrote.
The lawsuit also alleges that Trump inflated the value of Trump National Hudson Valley because the financial statement did not disclose that Trump has a lease for the property, and did not account for the rent the company paid to the landlord.
The Associated Press contributed to his column.
David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at dwilson3@lohud.com.