{UAH} President Trump's Cash Streams Seem To Be Slowing Down
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President Trump's Cash Streams Seem To Be Slowing Down
For years, Donald Trump fueled his business with piles of cash, making hundreds of millions by selling condos, starring on The Apprentice and putting his name on everything. But almost halfway into his initial term as president, those cash streams are all slowing down.
That does not bode well for Trump's business. Although the president's fortune, which Forbes pegged at $3.1 billion in February, is almost entirely tied up in hard assets like golf courses and buildings, Trump relies on cash to pay debt and pursue opportunities. From 2006 to 2014, Trump pumped more than $400 million of cash into new properties, according to the Washington Post.
It's hard to see how the president could generate such quantities of cash over the next few years. In May, Trump got a one-time boost when he sold his interest in a Brooklyn housing project, pocketing an estimated $15 million after taxes. But other than that, he sold only $8.5 million worth of condos and land lots in the first half of 2018—a sharp decline from previous years, according to a Forbes analysis of property records. Trump regularly brought in more than $50 million a year by selling condos and land before he was elected president. And he continued doing such business after taking office, hauling in more than $20 million from sales in the first six months of 2017. Chief among those deals: A $15.9 million New York penthouse that went to Angela Chen, who runs a business called Global Alliance Associates, which boasts on its website that it can leverage its network with the "highest levels of government officials" to help companies do business in China.
Trump has not sold a condo for that much since. Most of the properties he has sold this year are in a Las Vegas tower he owns in a 50-50 partnership with casino billionaire Phil Ruffin. Since January 1, the duo has sold 19 units for a total of $5.9 million, according to property records. Many of the buyers purchased units through holding companies, shielding their identities from the public. Trump also sold three lots alongside his Los Angeles-area golf course for a total of $5.6 million, according to property records.
Running for office cut off the source of other funds. Trump stepped down from his role as star of The Apprentice after he launched his campaign. Federal Communications Commission rules require presidential candidates to receive equal airtime on non-news programs, which would have been impossible if Trump continued hosting his own show. The president boasted he earned $214 million from the Apprentice from 2004 to 2015 in a campaign press release, which also falsely claimed that he was worth more than $10 billion.
Bombastic politics haven't helped cash flows either. Trump launched his campaign with controversial statements about Mexican immigrants. Within weeks, companies that had partnered with him—including mattress maker Serta, fragrance retailer Perfumania and department store Macy's—reportedlybegan cutting ties. On a 2016 federal filing, Trump said he owned five product licensing companies that brought in more than $100,000 in revenues. Two months ago, in his latest financial disclosure filing, Trump said that only one of those businesses now takes in that much money.
Trump also used to collect big fees from foreign developers for slapping his name on their buildings. Upon taking office, however, the president and his family promised to stop pursuing new foreign deals, limiting their growth prospects. Before long, some of Trump's overseas partners sought to distance themselves from the U.S. president by taking his name off properties previously branded Trump. In Panama, an investor waged a public battle to remove the Trump name from a sail-shaped skyscraper. The Trump SoHo in New York City changed its name to the Dominick. In Toronto, investors took down the Trump name, and apparently paid a big price to do it. One of the president's companies, named Trump Toronto Hotel Management Corporation, listed its 2017 revenues at $2.3 million, up from the $560,000 it reported taking in from January 2016 to April 2017. Collecting breakup fees, however, is not a long-term business model.
Unable to pursue new foreign deals, sons Eric and Donald Trump Jr. launched an effort to exploit Trump's popularity in smaller U.S. markets by launching two new hotel brands named Scion and American IDEA. Trump Hotels CEO Eric Danziger once claimed that the Trump Organization had up to 39 letters of intent. But a September 2017 investigation by Forbes and ProPublica found that the two new hotel lines produced little more than hype. Trump's latest financial disclosure, filed in May, shows no apparent change in the president's finances from the new brands, other than $27,000 in management fees connected to projects in the Mississippi Delta. A spokesperson for the Trump Organization did not respond to a request for comment on this story.
The president is still one of the richest people in the country, maintaining his core business of renting office and retail space to big companies in New York and San Francisco. His 160-plus tenants—including Gucci, Walgreens Boots Alliance and Starbucks—pay an estimated $175 million or so in rent every year. But that revenue is offset by big expenses like building maintenance and real estate taxes.
The slowdown in pure-cash opportunities is not necessarily permanent. For years, former presidents have monetized their fame by writing books and delivering speeches. The Clintons, for example, earned more than $240 million from 2001 to 2015. In addition to writing and speaking, Trump may also be able to capitalize on his presidential fame by leveraging new licensing deals in far-flung corners of the world. He claimed that he turned down a $2 billion deal from Dubai billionaire Hussain Sajwani just before he entered the Oval Office. In the former Soviet republic of Georgia, his old partners have already made it clear that they are eager to get back into business with Trump. "The tower will be ready for the Trump mark," one of them told Forbes last year, "if the Trump mark is ready to come back to the tower."
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