According to the Washington Post, Donald Trump reported in his May filing to the Federal Election Commission that eight of his 10 golf courses were worth tens of millions of dollars, as his attorneys have pressed local tax officials to value the properties at a fraction of those amounts. The numbers add to the mystery surrounding Trump’s personal finances, which have emerged as a campaign issue as he has refused to release his tax returns.
When Donald Trump submitted financial disclosure forms to election regulators, he bragged that his portfolio included some of the “finest and most iconic properties in the world.” Among them was Trump National Golf Club Jupiter in Jupiter, Fla., which Trump valued at more than $50 million, the Washington Post reported.
That came as a surprise to officials in Palm Beach County, where the golf course is located. A few months earlier, for the third straight year, Trump’s attorney had gone to court to argue that, for the sake of calculating his tax bill, the property was worth “no more than $5 million,” the Post reported.
A Washington Post review of local property records revealed the same pattern across most of Trump’s U.S. golf courses. For eight of the 10 courses on which he pays taxes, Trump reported in his May filing to the Federal Election Commission that the courses were worth tens of millions of dollars even as his attorneys have pressed local tax officials to value the properties at a fraction of those amounts.
View a chart of the numbers here.
The contrasting figures add to the mystery surrounding Trump’s personal finances, which have emerged as a campaign issue as he has refused to release his tax returns. And they reflect what critics say is Trump’s willingness to calibrate his wealth claims depending on the circumstances—going high to impress voters and back up his claim that he is worth $10 billion, a figure questioned by many experts, and going lower to argue for smaller tax bills, the Post reported.
It is not unusual for corporations and other property owners to aggressively petition for lower taxes, and differences between the market value of a business and the assessed taxable value of its real estate are commonplace. Nor is there a legal issue for Trump in the gaps between his federal disclosures and local filings, according to ethics experts, because the disclosure forms are designed to show potential conflicts of interest, not to provide precise estimates of asset values, the Post reported.
But tax analysts say it’s rare for values to shift as much as those of Trump’s clubs. It’s also unusual that a business owner would provide potentially contradictory information in a different forum, as Trump has done with his financial disclosure, the Post reported.
“He will tell everyone his courses are worth $50 million or whatever, that they’re the greatest courses in the world, but then go to the county assessor and, under threat of perjury, sign documents that the market value is under $10 million,” said Arthur E. Gimmy, a veteran California appraiser who has assessed golf courses in 20 states. “It’s total nonsense.”
In rural Iredell County, N.C., for instance, Trump’s lawyers have argued successfully to shrink the taxable value of his course there since he bought it in 2013. The $167,000 annual reduction in revenue to the county is a “pretty big chunk,” said Wes Long, an appraiser there, adding that the money comes from “whatever taxable money goes toward: salaries, raises, roads, schools, police.”
Alan Garten, the Trump Organization’s executive vice president and general counsel, defended Trump’s tax disputes as a legal, prudent way of doing business and saving cash. The higher values listed on the federal form reflects the unique merit of the Trump brand, he added, which can boost the courses’ sales value in a way that won’t be reflected on local tax rolls, the Post reported.
“When you’re talking about properties that are owned by Mr. Trump, there is an intrinsic value associated with those properties because he is associated or owns those properties,” Garten said. “There’s never been anyone like Mr. Trump, with his net worth, to run for the highest office in the land.”
Trump’s strategy in arguing for smaller tax assessments matches his aggressive devotion to fighting, as he has said, “very hard to pay as little tax as possible.” Government and legal records show that Trump piled up deductions to pay nothing in federal income taxes for at least five years in the 1970s, 1980s and 1990s. Some tax analysts say that it is likely that Trump has used those same deductions to pay little to no income taxes in recent years, the Post reported.
Trump has routinely sparred with analysts who he says undervalue his fortune, including suing author Tim O’Brien, whose book, “TrumpNation,” alleged that Trump was not a billionaire. Trump’s clubs have been a fixture in his campaign. He has used them as venues for rallies and primary election-night victory speeches, such as his infomercial-style appearance on Super Tuesday in which he showed off a stack of Trump Steaks and other branded products, the Post reported.
The business executive turned to golf-course development for a new and glamorous identity in the downtrodden years between his first casino bankruptcies and his TV resurgence in “The Apprentice.” He bought courses out of bankruptcy, made deals with troubled sellers and leased some land from local governments, the Post reported.
Trump pays property taxes on 10 U.S. golf courses. In the case of eight of those courses, the actual assessed value is far lower than the values Trump claimed in his FEC financial disclosure filing. The FEC form requires candidates to list assets in value ranges, with $50 million and above as the highest category. The combined value of the 10 courses, as determined by local officials, is roughly 60% of the $385 million Trump gave as a minimum estimate, the Post reported.
Trump’s approach in lowering tax bills is evident in his company’s handling of the Iredell County course. The company bought the property in 2013 for $6 million. It then pledged $10 million toward renovations of the existing country club, about a 45-minute drive north of Charlotte, for what’s now known as the Trump National Golf Club Charlotte, the Post reported.
Soon after Trump took over, the company began lobbing appeals at the local tax assessor—and winning. Since 2013, while the club invested in upgrades and the broader real estate economy flourished, the club’s tax assessment has plunged 58 percent, from $22.7 million to $9.6 million. Trump’s FEC filing lists the club’s value as between $5 million and $25 million, the Post reported.
Trump representatives at the club, which boasts a sweeping course designed by golf legend Greg Norman and a 500-person lakefront ballroom, argued that the club’s sinking income warranted a lower valuation. In Trump’s election filings, he said the club made $14 million in revenue between July 2015 and May 2016, the Post reported.
In his financial disclosures, Trump valued the Trump National Golf Club Westchester at more than $50 million. But last year, his attorneys filed papers with the state declaring the “full market value” of the course was far lower: about $1.4 million. Trump lawyers have since upped their estimate, to $9 million, though town officials say they could still lose hundreds of thousands of dollars a year in tax funds if the Trump appeal succeeds, the Post reported.
Trump bought one course in Ranchos Palos Verdes, Calif., for $27 million in 2002; said in 2006 that he would pour more than $260 million into its remodeling; and then, in 2008, requested that Los Angeles assessors tax it as if it were worth $10 million. Trump has since won three appeals to lower the club’s taxes, and it is now appraised at about $14 million—far below the value in Trump’s recent election filings of more than $50 million, the Post reported.
To carry out his strategy, Trump has turned to a cottage industry of private, on-the-ground tax agents who can aggressively press their case against public officials—and, in some cases, outplay or outlast their opponents in local government. Tax assessors said they spend several months out of the year, as well as thousands of dollars on property experts, to defend their valuations against disputes such as Trump’s, the Post reported.
“[Trump’s tax agents] are well-versed in the ways to argue that position, whereas local jurisdictions may not,” said Hughlene Burton, an associate professor of accounting at the University of North Carolina at Charlotte.
He has also fought for lower tax bills at courses that seem to be pulling in strong business. Lawyers have met with Miami-Dade County officials every year since 2012 to lower the assessments at Trump National Doral, the elite South Florida club that Trump bought for $150 million in 2012 and pledged to boost with a $250 million makeover, the Post reported.
Repeated Trump appeals, including at a special hearing in June, helped knock the club’s value down from roughly $100 million in 2012 to $75 million this year, even as it bloomed with renovations. The club’s revenue, Trump said in election filings, totaled more than $131 million in the 10 months that ended in May. Trump’s election filing says the club is worth at least $50 million, the Post reported.
The dispute has become a political issue in Doral, where the city council is scheduled to debate a resolution Tuesday urging the Miami-Dade property appraiser to reconsider the assessed value, the Post reported.
“By not paying his fair share, he is depriving the residents of Doral and the people of Florida as a whole,” said Sandra Ruiz, a Doral city council member.
Trump’s son, Eric Trump, testified last week that charging people who aren’t allowed to play at Trump National Golf Club Jupiter (Fla.) is part of making the club “great again,” the Fort Lauderdale, Fla., Sun Sentinel reported.
The golf club faces a class action lawsuit from people who say while waiting for membership deposit refunds they are being charged thousands in annual dues and fees, yet are not allowed to use the golf course, restaurant, spa and other amenities, the Sentinel reported.
C&RB reported on the lawsuit earlier this month.
Eric Trump, who oversees his father’s 18 golf clubs, testified that those on a refund waiting list will get their money as new members join to replace them, which could take years. And in the meantime, he said their membership deal requires that they keep paying membership costs even if they are barred from using the members’ facilities, the Sentinel reported.
“It’s very much like a co-op building,” said Eric Trump, testifying in federal court. “It’s the communal aspect of the thing that keeps a club going.”
Eric Trump said when his father’s company took over the former Ritz-Carlton golf club in 2012, the club was on the verge of closing. He said they have invested about $25 million upgrading the golf course, adding a ballroom and making other improvements that have membership thriving, the Sentinel reported.
“We took something that had really gone bad and we made it great again,” Eric Trump said.
But attorney Brad Edwards, who represents the 65 members suing the club, said expecting people to pay for something they can’t use “is a violation of a fundamental principle of life.” The dispute involves about $2.4 million in fees owed by those filing suit, according to Trump’s legal team.
Trump’s organization opted to enforce a long-standing requirement in the membership documents for people on the refund waiting list to keep paying dues, without having access to the club, Eric Trump said. “People bought into a contract,” Eric Trump said. “You had to continue to pay your dues.”
Donald Trump’s letter saying he wouldn’t collect dues from people on the waiting list wasn’t a legal document, said David Cohen, Trump’s lawyer in the deal. “This is a letter from a passionate person,” Cohen said. “This is how he expresses himself.”
Those filing suit are not “sympathetic people” who were “taken advantage of,” Cohen said. “They could read. They had lawyers,” Cohen said.
Donald Trump’s company bought the Jupiter golf club for about $5 million, but its members were potentially due about $41 million in refundable deposits that created a financial liability, his son testified. To whittle down that refund liability, Trump offered members willing to forfeit their deposits the chance to pay reduced yearly fees and to also have access to other Trump clubs, such as the Mar-a-Lago Club in Palm Beach, the Sentinel reported.
Nearly 90% of club members were willing to forfeit their refunds in exchange for lower dues and access to Trump’s other clubs, Eric Trump said. Under questioning, Eric Trump said he was mistaken during a 2015 deposition when he indicated that people seeking deposit refunds, but still required to pay dues, hadn’t been denied access to club facilities, the Sentinel reported.
“We have 18 different clubs with 18 different sets of membership documents,” Eric Trump said. “I can’t know every detail in a company our size.”
Two days of testimony before U.S. District Judge Kenneth Marra ended Tuesday afternoon. Marra is expected to rule in September at the earliest, the Sentinel reported.
“If I ever decide to join a golf club, I will read the documents very carefully,” the judge joked at the end of the hearing.
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