One of the themes in New York Attorney General Letitia James’ multimillion-dollar case against former President Donald Trump is that he undervalued real estate if it would save him money, and overvalued real estate if it helped him get bigger loans. to get.
The Trump International Hotel & Tower Chicago showcase is cited as an example of how Trump reportedly wanted to go both ways. When he needed collateral, he and his team placed a high value on the property, and when he wanted a tax break, he called the property worthless, according to the lawsuit filed Wednesday by James’s office.
Once touted as a jewel of the Trump wallet, the Chicago Trump Tower was in reality stuck in questionable funding for years.
The 220-page lawsuit said the downtown Chicago property, officially owned by 401 North Wabash Venture LLC, was valued at $133 million in recent years by Deutsche Bank, which loaned Trump money for the project, but gave another story – he said it was worthless – when declaring his taxes.
In an effort to avoid detection, Trump and the Trump Organization deliberately did not include the skyscraper in its various financial states so that it would not expose the various values he gave the property, the lawsuit said.
“Since 2009, its value has been excluded from Statements of Financial Condition,” which are essentially balance sheets reviewed by lenders and others that show assets and liabilities, the lawsuit said.
Based on an affidavit, the reason for the omission was that “Trump did not wish to take a position on the statements that would conflict with a position on the value of the property he has represented to the IRS,” the lawsuit said. “(The) investigation revealed that the tax position taken was that, according to Mr. Trump, the property had become worthless and thus formed the basis of a significant loss under federal tax law.”
The Chicago hotel and residence is “relevant” in the case filed by James’s office because “Mr. Trump and the Trump Organization obtained bank loans on the building or its components as collateral and the statements were part of the loan transaction,” the lawsuit said.
Any use of different property values could put Trump in a difficult position, as he has reportedly certified his statements of financial condition as true and accurate in multiple loan agreements, including in loans he personally guaranteed for the skyscraper on the banks of the Chicago River. .
One of the loan transactions cited in the lawsuit was one in which the Trump Organization paid a $98 million to $19 million loan with the proceeds from the sale of apartments in the Chicago property, but then successfully completed the loan from Deutsche Bank. $54 million raised – to a $73 million loan – with Trump’s personal guarantee.
Included in collateral, the lawsuit said, were “unsold condominium units and the Trump International Hotel Chicago.”
In 2015, the lawsuit said the Trump organization had paid what it owed on a remaining $45 million loan.
But since the property was valued at $133 million, that was in Trump’s favor because the valuation triggered specific provisions in his loan agreement that “Mr. Trump’s personal guarantee has been eliminated,” the lawsuit said.