Donald Trump, the billionaire who says “only I can fix” America’s problems, can’t even keep his own hotels solvent in Canada.
The Trump International Hotel & Tower in Toronto–one of the crown jewels of the Trump hotel empire–is bust (Politico).
On Tuesday, a Canadian bankruptcy judge placed the glass-and-granite building into receivership, just four years after Trump and his children cut the ribbon at its grand opening. Once it’s auctioned off, whether or not Trump is the leader of the free world by then, his name may well vanish from its marquee.
And that’s not all. Trump doesn’t actually own the hotel branded with his name. The developer is Alex Shnaider, a Russian-born Canadian, who might be a great white north version of Trump himself.
Talon International took over as developer. Company chairman Alex Shnaider, a Russian-Canadian entrepreneur, was a 36-year-old married father with an intriguing story of his own. He had made a fortune in the steel-trading industry. He drove a $400,000 steel-grey Bentley. He bought a Formula One team for $50 million. More recently, he hired Justin Bieber to sing at his daughter’s 16th birthday party.
Since Trump doesn’t actually own the hotel and tower, he can’t lose by having it go bust. In fact, that might even be his goal.
Talon lawyers said in the response they believed Trump’s ultimate objective is to devalue the tower and purchase it at a discount. The evidence: senior Trump executives had expressed an interest in acquiring the entire project for $100 million, Talon said, and potential investors revealed that Trump employees had been disparaging the project and Talon’s handling of it.
But the city of Toronto is upset having the equivalent of “Mud” on one of the more valuable properties in a decidedly multicultural metropolitan area of 6 million.
In December, councillor Josh Matlow made a public call for Talon to remove Trump’s name from the building, arguing it was a blemish on Toronto’s skyline. Lisabeth Pimentel, president of Unite Here Local 75, the union that represents some Trump hotel workers, said hotel staff members “get a lot of questions from customers about Trump” and his positions.
“We shouldn’t have to answer for his behaviour,” she said. In August, hospitality workers staged a demonstration with a mariachi band outside the hotel-condo to protest the Republican candidate’s anti-immigrant statements.
In September 2015, Hollywood mogul Harvey Weinstein moved the Toronto International Film Festival out of the Trump property (yes, I wrote that article). It’s certain that Trump’s political stands have hurt business. Politico:
Court documents show that even though investors in the hotel units were told the “worst case scenario” for occupancy rates would be 55%, they’ve ranged between 15% and 45%. The average room rate, despite the snazzy crystal sconces and in-mirror bathroom TVs and floor-to-ceiling windows overlooking Lake Ontario, has been nearly $100 below the initial projections.
“The whole business model has been overpromise and underdeliver, and it’s Trump’s name on the thing,” the insider said. “You can’t put all the blame on him and his people. But if they did a terrific job, do you think it would be in bankruptcy?”
Overpromise and underdeliver. Sounds like a politician to me. Eh?