Donald Trump returns to his company this week as it faces a deepening crisis, with key properties bleeding revenue and its bankers, lawyers and customers fleeing the company.
Financial disclosure forms, filed by the former president as he left office, revealed that his hotels, resorts and other properties had lost more than $120 million in revenue last year, as the pandemic forced long-term closures and kept customers home.
Those losses were worst in the places where Trump could least afford it: His Washington hotel, which has a $170 million loan outstanding, saw revenue drop more than 60%. His Doral resort in Miami – also carrying a huge debt load – saw a 44% drop.
On Thursday, the company’s troubles grew: One of its banks and one of its law firms said they would cut their ties with the Trump Organization. They are the latest in a string of vendors and customers who severed their relationships with the company after Jan. 6, when a mob of Trump supporters, egged on by the president, attacked the U.S. Capitol.
The picture emerging shows the inversion of Trump’s fortunes since 2015, when he entered politics promising to remake the country in the image of his growing, swaggering business.
Now, Trump returns to a business remade in the image of the country he led: beleaguered, indebted and toxically politicized.
“He faces some very serious problems that have been building in recent years and I think are going to come to a head now that he’s left office,” said Bert Ely, a banking consultant who has testified before Congress on financial matters.
Ely said the Trump Organization is a relatively small operation, which relies heavily on the work of others – lawyers and real estate brokers, and investors who paid to have Trump’s name on their buildings. Now, some of those outsiders are pulling away. “He’s done enormous reputational damage to himself,” Ely said.
The Trump Organization did not respond to requests for comment Thursday.
Trump still owns his company. But it is unclear when – or even if – he will return to his old role as the company’s day-to-day leader. On Thursday, while Trump was seen playing golf at one of his courses in Florida, the Trump Organization’s website still listed Donald Trump Jr. and Eric Trump as the company’s leaders.
The new financial disclosures, filed routinely by an outgoing president, show that the company is facing one of its darkest hours, as the coronavirus hammers the tourism industry.
Overall, Trump listed specific revenue figures for 47 different companies, including his golf clubs, hotels and New York City park properties. Combined, revenue at those companies declined more than 35% last year, according to a Washington Post analysis.
There were bright spots: Revenue at Trump’s Mar-a-Lago Club, a members-only operation in Palm Beach, Fla., that is now doubling as the former president’s home, increased 13 percent. And Trumpstore.com, which sells T-shirts, candles and bath bombs bearing the former president’s name, reported that its income doubled, to $1.9 million.
But there were also sharp declines at three of Trump’s most important properties: his District of Columbia hotel, his Doral resort in Florida, and his Turnberry resort in Scotland. Their combined revenue fell from $149 million in 2019 to $71 million last year, a drop of more than half.
Trump faces more than $400 million in outstanding loans, including more than $290 million on Doral and the District hotel.
Ironically, the future of those businesses could depend on the man whose victory Trump tried to overturn: President Joe Biden.
That’s because Biden’s success in speeding up vaccinations for the coronavirus will play a major role in determining how fast the hotel and travel industries recover. And because Trump’s District hotel is located in a federally-owned building, making the Biden administration his landlord. If Trump seeks to renegotiate his lease, or to get federal approval for a sale of the building, he will be dealing with Biden’s General Services Administration.
On Thursday, White House spokesman T.J. Ducklo declined to comment about how the Biden administration will handle Trump’s hotel.
In the meantime, on Thursday, Trump’s company continued to lose key partners – including banks and lawyers that had stuck with it through the lowest points of Trump’s political career.
“We no longer have any depository relationship with him,” said a spokesperson for BankUnited, a Florida-based bank where Trump had kept more than $5 million in money-market accounts. On Thursday, BankUnited said it was closing those accounts. It declined to say why.
The decision meant that, since the attack on the Capitol, Trump had lost three of the four banks that held his largest deposits. Signature Bank and Professional Bank cut their ties earlier this month. The fourth bank, Capital One, has declined to comment.
Also Thursday, Trump lost one of his best-known law firms: Morgan Lewis, which has represented Trump on tax issues since before he ran for office. One Morgan Lewis partner, Sheri Dillon, had become a well-known defender of Trump, appearing with him in 2017 at a news conference in Trump Tower, next to a pile of papers and folders that were supposed to represent Trump relinquishing control of his businesses.
“President-elect Trump wants there to be no doubt in the minds of the American public that he is completely isolating himself from his business interests,” Dillon said then.
But on Thursday, the firm said that relationship was ending.
“We have had a limited representation of the Trump Organization and Donald Trump in tax-related matters. For those matters not already concluded, we are transitioning as appropriate to other counsel,” Morgan Lewis spokeswoman Emily Carhart said in an email. She declined to give a reason.
Dillon was also involved in the Trump Organization’s handling of an estate called Seven Springs in suburban New York, where the company obtained a $21 million tax break through a “conservation easement” – essentially, a promise not to develop some of the land in exchange for a tax benefit. Now, Trump’s dealings with Seven Springs are the focus of two state-level investigations, by the Manhattan district attorney and the New York attorney general.
The decision by Morgan Lewis marked at least two law firms that have cut ties with Trump’s company since Jan. 6. The first, Seyfarth Shaw, announced its decision last week.
This week, the news site American Lawyer reported that a third firm, Alston & Bird, was also ending its work with Trump’s company. Alston & Bird declined to answer questions from The Washington Post.
In the immediate wake of the attack on the Capitol, the Trump Organization lost two of its real estate brokers, its e-commerce vendor, its chance to host the 2022 PGA Championship golf tournament, and its hopes of hosting another golf tournament, the British Open. Also, New York City said it will end the Trump Organization’s contracts to run a carousel, two ice rinks and a golf course in city parks – contracts that brought the Trump Organization $18 million in 2019.
Elsewhere, two major tenants in Trump’s office building on Wall Street, the Girl Scouts of Greater New York and a tuberculosis-fighting charity called the TB Alliance, said they were seeking to leave the building. The Trump Organization has not said whether it will let them break their leases.
The backlash to Trump’s actions has even hit the smallest of Trump’s business partners, including the organizers of a triathlon – the Tri at the Trump – held at Trump’s golf course outside Charlotte, N.C.
“It was all on track before the Capitol,” said Chuck McAllister, the founder of the event, which he expected to attract 450 athletes and 1,000 spectators.
But then, McAllister said, the Capitol attack caused sponsors and vendors to pull out. He had to cancel the event. It was actually the second time he had to cancel the event because of political backlash against Trump: In 2017, he canceled a previous triathlon after Trump said there were “very fine people” among white supremacist protesters in Charlottesville, Va.
But he came back to Trump, and got burned again.
“It is deja vu. It’s like Groundhog Day,” McAllister said. He said he was unsure whether he would come back in 2022. “The name’s toxic. It’s toxic to some people. That’s never going to change.”