Another round of trouble as Trump sues for $100m
After a bruising campaign to build a golf course in Scotland, the tycoon sets his sights on a town in California
Monday 22 December 2008
Donald Trump, billionaire property magnate and orange-haired icon of capitalist success, has gone to war against a little Californian town that he says is undermining the "Trump image".
He has launched a lawsuit demanding Rancho Palos Verdes, on a beautiful Pacific coast peninsula, compensate him to the tune of $100m (£67m), five times the town's annual budget, in a dispute over a hyper-luxurious golf course he developed there in 2002.
The local authority is defrauding him and breaching his civil rights, his lawsuit thunders.
What has the town done to earn the tycoon's wrath? According to local residents and court documents, officials have refused to rename a local highway Trump National Drive, and forced him to cut down a row of 12ft trees he had planted to block views of low-cost housing from the course. Now they are holding up plans for 20 luxury homes in the golf club grounds, demanding tough environmental and safety studies because of landslides in the area.
A frustrated Mr Trump told the Los Angeles Times this weekend that he had been "looking forward" to suing Palos Verdes for a long time. "The town does everything possible to stymie everything I do," he said.
His lawsuit alleges that the town is forcing him to spend "millions of dollars on unnecessary, repetitive, unreasonable and unlawful geologic surveys" while knowing that the cliff-top property is safe – something Mr Trump thinks they are doing so that they can pocket more fees from him.
Instead of constantly changing the rules, as he alleges, they should be grateful that he came to the area in the first place. "I took a piece of land lying fallow, tied up in courts for years and created the No 1 course in California," he said.
Mr Trump's company, VH Property, bought the 300-acre parcel of land, half an hour south of Los Angeles, in 2002 – three years after a landslide had destroyed a previous golf course on the site and sent the 18th hole into the sea. His 45,000 sq ft clubhouse has attracted professional golfers with "stately locker rooms", businessmen with "secluded conference rooms" and celebrities with facilities including a "magnificent grand ballroom". Homes within the grounds sell for $12m apiece and the complex boasts stunning views.
But Mr Trump's relations with the locals have been less than serene almost since his arrival, when he originally charmed them at town hall meetings and business breakfasts. Wags dubbed his plan to rename Ocean Trails Drive as "Narcissism Lane". The legal action launched in a Los Angeles court marks a new low.
Attorneys for the town say they were surprised by the suit and would respond "vigorously". Tom Long, a local councillor, said the suit was a "betrayal" of agreements. "This is a sad day for the city but an even sadder one for Donald Trump who has sullied what good remains in his name and endangered his legacy."
Residents told local reporters that they were angry Mr Trump was bullying them and the local authority. "He just feels rules aren't made for him," Jo Ann Michetti, a retired liability investigator, told the Los Angeles Times. "He expects them to say he can do it because he's Donald Trump."
Mr Trump's aggressive business practices and concerns that he would ride roughshod over environmental laws were among the fears raised in the UK, where he waged an 18-month charm offensive aimed at winning permission to build a similar luxury golf course in Aberdeenshire. The scheme won approval last month, but only after the intervention of the Nationalist government in Scotland, which overturned the decision of the local council to side with environmental opponents of Mr Trump. The tycoon attended meetings on the scheme in person.
Rancho Palos Verdes is the latest in a list of legal skirmishes that have broken out this year across Mr Trump's sprawling empire. With the credit crisis strangling financing for many building projects – and threatening a crash in property prices – Mr Trump is under pressure to squeeze profits out of all his existing ventures.
In Chicago, where Mr Trump has half-built a hotel and condominium complex taller than New York's Empire State Building, he is suing Deutsche Bank, which provided loans for the project and says he missed a deadline this month to pay off $334m. Mr Trump claims the credit crisis counts as force majeure, equivalent to acts of God, and he should get an extension on the loan.
Meanwhile elaborate plans are being mothballed, with Trump skyscrapers from Dubai to Philadelphia on hold. Scottish politicians have raised doubts about whether the Aberdeenshire development will go ahead. Mr Trump denies this. Worst of all, Trump Entertainment Resorts, his publicly-quoted casinos business which runs three complexes in Atlantic City, has until the end of the month to deliver a $53.1m interest payment, or renegotiate debts, or be put into bankruptcy.
Panto villain? A passing resemblance
*The Aberdeen Arts centre is putting on a pantomime this Christmas. Robin Hood And Babes In The Woods tells the story of the Sheriff of Nottingham who plans to cut down Sherwood Forest and build an International Golf Course & Holiday Resort. But the forest belongs to the Sherwood Twins who have no intention of letting the Sheriff get his way. Any reference to Donald Trump and his controversial plans for a luxury golf resort not far from Aberdeen must, of course, be purely coincidental.
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