What happened to Puerto Rico's Trump Golf Club?
Puerto Rico had been hard hit by a recession, and the club had taken on substantial debt and was suffering annual losses for years before Trump's company intervened.
How much did it cost to build the Puerto Rico golf resort?
In 2000 and 2004, Puerto Rico’s Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (AFICA) issued the owners of the club a total of $25,497,854 in bonds to help build and launch the resort.
Did Donald Trump set Coco Beach Golf and Country Club on course?
Donald Trump did not set Coco Beach Golf and Country Club on course for ruin, but he wasn’t able to save it from that fate. His role in the bankruptcy of the company, which ended up costing Puerto Rican taxpayers $32.6 million, was significant but limited.
Is Puerto Rico in deep trouble?
Texas & Florida are doing great but Puerto Rico, which was already suffering from broken infrastructure & massive debt, is in deep trouble..
How much did the Puerto Rican government lose in the bankruptcy?
His role in the bankruptcy of the company, which ended up costing Puerto Rican taxpayers $32.6 million, was significant but limited. That $32.6 million loss constituted 0.03 percent of the territory’s total $123 billion debt, which prompted the Puerto Rican government to file for bankruptcy relief in May 2017.
When did Coco Beach go bankrupt?
By October 2011, Coco Beach had defaulted on $26 million in bonds and had to seek another round of financing. In 2015, the company filed for bankruptcy under its original name, Coco Beach Golf and Country Club, citing debts of more than $78 million but only $9 million in assets. Bankruptcy court records show that Puerto Rico’s Tourism Development ...
How much did the Puerto Rico club default on?
After the agreement, the Puerto Rican government issued bonds to help finance the project, and shortly after selling them, the club defaulted—leaving Puerto Rico taxpayers, as Green suggests, on the hook for more than $30 million.
Did Trump leave Puerto Rico with debt?
On Friday several tweets alleging that President Don ald Trump left Puerto Ricans with massive debt went viral following the president’s remarks about the island territory and the recovery efforts in the wake of Hurricanes Irma and Maria.
The aftermath of Hurricane Harvey
The reality TV mogul signed two deals with the club in 2008, one a licensing agreement to name it Trump International Golf Club Puerto Rico, and a management agreement which gave Mr Trump control of the club in exchange for a slice of the profit.
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What was the unemployment rate in Puerto Rico in 2008?
So by the time the club and the Trump Organization were first joining forces, Puerto Rico's unemployment rate was already climbing. It rose from 10.6 percent in March 2008 to an eventual peak of 17 percent in May 2010.
What is Section 936 in Puerto Rico?
Puerto Rico had lost a powerful economic driver the previous year: the so-called Section 936 federal tax write-off for companies with money-earning subsidiaries on the island. The tax shelter had been especially popular with the pharmaceutical industry.
Premise
Aftermath
Reactions
In response, public relations and marketing executive Lainie Green issued a series of tweets that went viral, accusing President Trump of having added to Puerto Ricos debt by bankrupting a golf course there and defaulting on $33 million worth of government-issued bonds:
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Ownership
According to documents first detailed in a 2016 BuzzFeed investigation, in 2008 Trump International entered into an arrangement with the owners of Coco Beach Golf & Country Club, a foundering resort and golf course that had opened in 2004 on the northeast coast of Puerto Rico about 30 miles from San Juan. Under the agreement, the future presidents company licensed the Trump name to the owners and took on a share of the resorts day-to-da…
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Controversies
By October 2011, Coco Beach had defaulted on $26 million in bonds and had to seek another round of financing. In 2015, the company filed for bankruptcy under its original name, Coco Beach Golf and Country Club, citing debts of more than $78 million but only $9 million in assets. Bankruptcy court records show that Puerto Ricos Tourism Development Fund made a claim of $32,606,821, essentially leaving Puerto Rican taxpayers on the hook for the …
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Analysis
The evidence shows that Coca Beach had consistently been operating at a loss and accumulating debts in the years before Trump International became involved with its management. And a significant portion of the financial assistance provided by the Puerto Rican government was given in 2000 and 2004, well before the future U.S. presidents company arrived on the scene.
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Funding
However, one could argue that Trump International received a good deal of money from the Coco Beach deal yet failed to turn the club around, or even stanch its financial bleeding. According to the March 2011 bond offering (which was itself required to cover losses on the Puerto Rican governments 2000 and 2004 bond investments), Trump International had given certain assurances about the future viability of the resort:
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Results
Whatever that plan was, it did not succeed. The 2012 financials show that the clubs average annual losses rose to $6.3 million during the period that Trumps company provided management services to the resort (2008-2012), $1 million more per year than the business had been losing before. Further, for this lack of success, Trump International garnered a total of $609,607 in management fees between 2008 and 2012. (This figure is likely the …
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Significance
Donald Trump did not set Coco Beach Golf and Country Club on course for ruin, but he wasnt able to save it from that fate. His role in the bankruptcy of the company, which ended up costing Puerto Rican taxpayers $32.6 million, was significant but limited. That $32.6 million loss constituted 0.03 percent of the territorys total $123 billion debt, wh...
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