The Trump Organization said it will walk away from its signature Trump SoHo Hotel in New York City, as early as December 2017.
The company that manages President Donald Trump’s business affairs has managed the glitzy hotel-cum-condominium project since it first opened in 2010, but it has suffered for most of its life from the after-effects of the financial crisis, which crimped the spending of its target customer base.
The project was sold in a foreclosure auction in 2014 to CIM Group, one of its biggest lenders. Since then, the Trump Organisation has received a cut of its revenue, but has also been on the hook to CIM if the project failed to meet financial targets, according to the New York Times.
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Construction of the signature Manhattan building was originally announced to fanfare 11 years ago on the future president’s TV show, The Apprentice. But it was dogged from the start by controversy, not least because of how it was funded. Previous project bankruptcies had led Wall Street banks to stop lending to Trump projects. Its early backers included Bayrock Capital, led by the Soviet-born Felix Sater, who had been convicted for running a ‘pump and dump’ stock fraud linked to Russian mobsters. More money came in through pre-sales to foreign buyers – mainly from the former Soviet Union – who were suspected of money-laundering (although no charges have ever stuck).
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The election of President Trump has had at best mixed results for the business. Basketball star LeBron James refused to stay at the hotel in December last year, the kind of political gesture that has been echoed this year in, for example liberal boycotts of products endorsed by Trump’s daughter Ivanka. And in June 2017, Koi Restaurant–which was located at the bottom of Trump SoHo–shut its doors, explaining to Money at the time that “before Trump won, we were doing great.”