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The latest Trump legal woes comes once again from NY where a judge ordered his business dissolved for fraud. Nobody losts money and it came down to some misstatements. I haven’t read the full case, but the judge on a high profile part of the case is completely off. Not even ballpark off.
He valued Mar-a-Lago at 17-25 million. I texted a broker in the area and he told me 100 million for an ocean acre and 25 million for a non-ocean acres. Mar is between 17-20 acres depending where you look online. Palm Beach has gone up a lot since COVID so maybe divide those numbers by 2 since Trump made his filling. He listed the property at 450-650 million. Without doing a full underwriting (maybe zoning issues where it couldn’t be worth the raw land price) it still appears Mar is worth a lot of money.
If you are going to do lawfare shouldn’t you avoid obvious mistakes? It’s easy to see a headline and write this whole case off as political. It weakens public perception of all other cases if you make mistakes that are this stupid.
If I am remembering this case correctly he did likely violate the law and include some statement that were obviously false but in a category that no one besides Donald Trump gets prosecuted for. So the case of Mar-a-Lago violates a principle of maintaining plausible deniability.
Edit: @AshLael looked up the prosecutors brief and it appears they did not use the tax assessment for valuation purposes. Which would negate my main point. The judge has a history of making stuff up against real estate developers and being later reversed. It’s quite possible this judge hates developers and just does stupid things.
https://twitter.com/goodguyguaranty/status/1707232241925910944?s=46&t=aQ6ajj220jubjU7-o3SuWQ
https://nypost.com/2023/09/27/mar-a-lago-judges-developer-hating-past-is-a-big-win-for-donald-trump/
Which would change the ruling and it’s citations to much more of all developer are bastards story (which is culture war) than my why are you lawfaring stupidly story
It is not correct to say the judge is the one valuing Mar-a-Lago at 17-25 million. The judge is just quoting the valuation from the Palm Beach County Assessor:
You can read the full ruling here. The ruling also goes over a bunch of properties Trump owned where he lied about easily verifiable facts to inflate valuations, like claiming his Trump Tower triplex was 30k sq ft when it was actually 11k sq ft.
Seriously, just skip down to page 20 and start reading. For property after property Trump was in possession of third party appraisals of his properties that he inflated to many times their actual value when reporting their worth to other parties.
Seven Springs:
So he inflated the value of his property by almost 10x what an appraiser said it was worth.
40 Wall Street:
Please tell me how it isn't fraud to lie to banks you're seeking a loan from and claim your assets are worth many times what they are actually appraised for.
Assessors for tax are notoriously different compared to actually FMV. Look at house sales and compare to assessment.
The Seven Springs case, at the very least, explicitly provides fair market value. Others generally list multiple appraisals, not just podunk county tax assessments. There’s also the part where defendants called a very cool and very knowledgeable expert witness specifically to claim he’d have assigned a higher market value. And where they argued, unsuccessfully, that SFCs don’t really have to use FMV. Clearly they were aware of the importance.
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If Trump thought the assessors value was low the correct thing to do is hire an appraiser, get an actual value, and use that. As best the lawsuit seems to indicate Trump just made numbers up!
No it isn't. You are rarely obligated under the legal system to make yourself worse off voluntarily. Remaining silent is always an option except in civil cases, where you are still allowed to stay silent to preserve your rights in a criminal procedure.
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Well valuations are kind of made up and differ significantly. It is an art not a science. My point is that using the assessor as if it was gospel unless proved otherwise is silly. The assessed value for local property tax is almost entirely irrelevant to the value of the land. The only real questions are “what was the value” and “was Trump’s value within the realm of possibility.” The assessor’s value (which isn’t based on a FMV standard) is irrelevant to those questions (outside of taxes affecting the value of the property).
It’s misinforming to a conclusion that becomes a lie because Joe midtwit doesn’t know difference between tax appraisal and a market appraisal. And being that they used it for a legal judgement by people who should know better and have a duty to know better I would say is grounds for disbarment.
These are lawyers and they do have professional standards and the things presented by the judge are just straight up lying.
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It’s commonly advised to not fight a low assessment because it reduces your property taxes. No one would assume a corrupt and/or ignorant judge would use that against him decades later.
According to the decision, signed a deed which restricted use of the property for anything other than a social club, including surrendering the right to subdivide the property and build homes thereon. Yet, in its filings, the Trump Organization submitted a valuation that ignored those land use restrictions, and claimed a valuation 2300% higher than the assessed value. And, the only evidence presented to the court to support the higher valuation was a conclusory affidavit from an expert, which, being conclusory, is of essentially no evidentiary value under established Florida law, and indeed established law pretty much everywhere.
So, what basis do you have for saying that only a corrupt or ignorant judge would reach the conclusion he did?
If beach front property assessments in Florida are anything like farmland assessments in the Midwest, such a valuation might not be completely ridiculous. Around me, pretty much all farmland is assessed at $1,500–$2,000 per acre, even though land hasn’t sold for that since the 1990s. One large farm near me recently sold for $20,000 an acre, but the assessed value is only $1,931 an acre. No farmer would (or should) get in trouble for valuing his land at 2023 rates, no matter what the assessor thinks. I’m not saying Trump’s properties are definitely the same, but it doesn’t seem immediately ridiculous to assume they might be.
Ok, but did the Trumps produce evidence that properties in the area often sell for 10x their assessed value? And you are ignoring the reference to the claimed value ignoring the restrictions on development. That is pretty bad, if true.
Regardless, remember the point is not that the judge is correct; it is that the claim that his decision can only be the result of corruption or ignorance does not seem to be consistent with the facts.
Trump shouldnt have to. The state needs overwhelming evidence. Fraud where no bank lost money should lose as a matter of course.
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I’m typing this on my phone, so I’m not going to mess with links.
First, the county assessor lists Mar a Lago’s market value as $37 million. If it’s true that the judge valued it at $17–25 million, there’s already a major discrepancy. It’s worth noting that Trump paid $12 million for it in 1995, equivalent to $24.3 million today. For the property to be only worth $25 million, the judge has to assume that property values haven’t risen faster than inflation, which seems awfully dubious from where I sit. He also has to assume that the county assessor overvalued the property by 1.5–2.2 times its actual worth, which is interesting given his complaint that Trump has been overvaluing his property. Perhaps he felt the best way to compensate for Trump’s overvaluation was to opt for a noticeable undervaluation?
Secondly, some neighboring properties’ asking and sale prices are instructive. 168 King Rd. (4,874 sq. ft., not ocean-front) just sold for $14 million, against an assessed value of $4.1 million (and a market value of $8.4 million; I’m not clear what the difference between the two is). Another nearby property (500 Regents Park Rd—6,488 sq. ft., ocean-front) is listed for sale at $40 million, against an assessed value of $6.4 million ($12 million market value).
Mar-a-Lago’s main building, by contrast, is 37,414 sq. ft. The property also contains five more buildings, two pools, and five tennis courts, to say nothing of the land. That it’s all worth a measly $17–25 million doesn’t pass the smell test.
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On the Palm Beach property I’m knowledgeable to yes the result is corruption or ignorance or just trying to give the redditors a partisan talking point. There isn’t even plausible deniability here.
Even if Trump can’t subdivide it’s certainly worth more than sfh with 2 ocean front acres which are trading 200 million plus. The family buying that plot would buy Mar for 200 and just have 15 extra acres.
You might not be able to get the full value of 20 acres which is probably over a billion but it’s certainly worth more than the highest sfh in the neighborhood which gives a lower bound of probably 250 million.
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Trump relied on the testimony of the most relevant possible expert, a powerbroker in Palm Beach whose last deal involved Tommy Hilfiger’s property and who represented in one of the largest sales in recent Palm Beach history. He listed the specific features which, in his expert testimony, would lead the property to be sold at north of one billion dollars, namely that is an “exclusive family compound” and “in the most desirable section of Palm Beach”.
You are misinterpreting his statement as being conclusory. Why? The expert's ultimate assertion is not “speculative”, it is based on his experience and assessment of the features of the property. It is not “unsupported by any evidentiary foundation”, he specifies the exact evidentiary foundation.
No, it was the court that said it was conclusory, not me. And, are you sure you are familiar with the law on what constitutes a conclusory expert opinion under Florida law? Because the fact that you consider the identity of the expert relevant to that question suggests that you might not be.
Most importantly, note that the issue now is precisely that: Was the expert's opinion sufficiently nonconclusory to be entitled to weight under Florida law? I would think you would be sufficiently uncertain of the answer thereto to be a little less sure that the decision must be the product of corruption or incompetence.
If any such statement was made in evidence a MSJ is improper because that creates a legitimate question of material fact. The judge is in a tails he loses heads trump wins situation if ever a nonbiased person reviews his order.
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True, but an independent appraisal isn't something that's going to be used as the basis to change the assessment. While their jobs are similar, assessors and appraisers don't look at exactly the same things, and an appraisal isn't even something the assessor's office will even know about.
Didn’t the Judge cite an assessor’s valuation?
Yes, because that's what's publicly available. An appraiser's valuation isn't public except for in unusual circumstances (like the property is subject to litigation, as in this case), and even then the values are almost always outdated by that point.
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They cited a tax value. That is not the same thing as an assessed value for market value. It’s a made up number they use for calculating taxes. And using it is an active attempt to deceive.
@coffee_enjoyer To be clear, an assessed value is one used for tax purposes. An appraised value is one used for market purposes, including determining collateral value.
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This seems more egregious, though:
Agreed. The one question is what duty of care did Trump have to the lenders? Could he say “I think land X is worth a billion dollars” and then if he provided all of the correct specs, cash flow, etc. it seems to me buyer beware (ie lender can use their own judgement to decide). If he said C&W said the land was worth 525m when they said 200m then that is fraud.
It seems like Trump may have fraudulent provided a sq foot number. That would fit the bill for fraud.
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I agree those look more egregious. Which is my main point why include Mar-a-Lago at such a silly valuation. Why not hammer the ones where you have a better case.
I read the Mar-a-Lago and quickly see judge is an idiot. So it’s easy to assume they are doing shenanigans elsewhere.
That being said even on that building Trump may have been closer to market value. Appraisers are known for being lagging and backward looking. And the real estate market changed a lot between 2010 and 2012.
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What you're missing are the land use restrictions that make it actually much less valuable on teh market than nearby lots.
I wish I could copy/paste from this part of the court ruling (the version I see is not OCRed), it's like 3 paragraphs and vastly clarifies the situation. Worth checking out if you care about this tweet.
Maybe the land is much less valuable but it would still be worth an order of magnitude more than the assessed value.
An order of magnitude more than the assessed value is already like 70% of the low end of OP's speculated value.
What do you mean by 'much less', and why do you think that?
Because we can look at much smaller properties around it and see how much they are worth. So even if per acre / per sq Ft MAL is worth much less it would still be worth a bunch because the amount of acres and sq Ft is much more than normal for this area.
$25mil is 'a bunch'.
You seem to agree with me that it will be worth less than surrounding properties, but you're still using them as your anchor.
The only question is how much less it is worth.
Absent any additional information about that, I'm fine trusting the county assessor and the judge, until someone shows me more evidence. I at least trust them more than Eric Trump, who is the source of this hot take.
But anyway, that's all sort of besides the point. It sounds like you agree with me that Trump significantly overstated the value of the property, which is what the judge was saying in this section.
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The relevant section, copy/pasted for your convenience:
Is it your contention that Trump is violating the land use restrictions by living at MAL? If he is not, then it seems MAL has at least value to someone to live there. Given its size and location that means MAL is worth a sizeable chunk.
I thought he might have been, but apparently the deal is that employees of the club are allowed to stay on site, so he's able to live there as a Mar-a-Lago employee or something? I dunno.
Edit: Having said that, all I was doing in this particular comment was giving @guesswho the quote he wanted.
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Thanks!
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