All over the country, businesses large and small are seeking breathing room from their lenders, landlords and business partners as they face the financial fallout from the coronavirus crisis.
President Trump’s family company is among those looking for help.
With some of its golf courses and hotels closed amid the economic lockdown, the Trump Organization has been exploring whether it can delay payments on some of its loans and other financial obligations.
Representatives of Trump’s company have recently spoken with Deutsche Bank, the president’s largest creditor, about the possibility of postponing payments on at least some of its loans from the bank.
And in Florida, the Trump Organization sought guidance last week from Palm Beach County about whether it expected the company to continue making monthly payments on county land that it leases for a 27-hole golf club.
The discussions with Deutsche Bank and Palm Beach County are preliminary, and it isn’t clear whether Trump’s company will be able to delay or reduce its payments, according to people briefed on the discussions.
“These days everybody is working together,” said Eric Trump, the president’s son, who helps manage the family business. “Tenants are working with landlords, landlords are working with banks. The whole world is working together as we fight through this pandemic.”
The Trump Organization’s requests put lenders and landlords in the awkward position of having to accede or risk alienating Trump.
Like the broader hospitality industry, the Trump Organization is poised to take a significant hit from the coronavirus crisis.
In recent weeks, the company has temporarily closed its hotel overlooking the Las Vegas Strip, cut staff and services at its hotels in New York and Washington and largely shuttered its golf clubs in Florida and New Jersey.
It also closed the Mar-a-Lago club in Florida, which at this time of year would normally be serving as the “winter White House,” as Trump likes to call it.
Yet the company, which has a portfolio of more than a dozen golf clubs and luxury hotels in the United States and overseas, has opted to keep some of its properties open absent government orders to close, in contrast with the widespread shutdowns by some larger hotel chains.
Other companies may be able to tap into a $500 billion rescue fund that will be administered by the Treasury Department.
But the economic bailout package, which Trump signed into law last week, specifically barred the president and his family from access to that money.
Late last month, Trump’s representatives contacted their relationship managers in Deutsche Bank’s New York private-banking division, which caters to wealthy customers.
They wanted to discuss the possibility of delaying payments on some of the hundreds of millions of dollars of outstanding loans that the Trump Organization has from the bank, according to a person briefed on the talks.
The discussions are continuing.
Around the same time, Ed Raymundo, a Trump Organization executive in Florida, emailed and called Palm Beach County officials to discuss whether they planned to keep collecting monthly rent payments on land that Trump’s company leases from the county.
Deutsche Bank has lent Trump and his companies about $2 billion since 1998, the only mainstream financial institution consistently willing to do business with Trump and his companies.
At the time he became president, Trump owed the bank about $350 million, including on loans to buy and renovate the Doral golf resort near Miami and to develop a luxury hotel in the Old Post Office building in Washington.
Both properties are suffering in the economic shutdown.
In response to Miami-Dade County’s rules, the Doral resort has ceased all operations, while the Washington hotel continues to operate, albeit with few guests and with its restaurant and bar closed.
The Trump Organization rents the Washington property from the federal government, and the company had been soliciting bids from potential buyers for the lease, a process that is now on hold.
Trump received the loans for those properties, as well as another related to his Chicago skyscraper, from 2012 to 2015.
Because of his history of defaults and bankruptcies, Deutsche Bank insisted that Trump provide personal guarantees on those loans, meaning that the bank has recourse to his personal assets if he were to stop paying back the money.
Attribution:The New York Times