The location and amenities are unbeatable: nearly five acres of quiet seafront property with 10 luxurious suites and perfectly-manicured lawn. The Château des Palmiers (Palm Tree Castle) is Donald Trump's "French" property, located on the Caribbean island of Saint Martin. It is now going on sale at Sotheby's.
There is no sign, no advertisement, the price is given "on request." According to the specialized website Mansion Global, citing a local source, the price could reach $28 million. “A little less”, according to Andy, the former kitchen chef, who currently serves as caretaker here with the help of two huge dogs. The young woman seems put off by this reporter's questions. "You can’t believe everything," she says. "This is just an ordinary villa that's gone on sale.”
The real estate sale, which began in April, has made a few quiet waves in Washington. If sold, the Château des Palmiers would be the first significant property transaction for Donald Trump since his move to the White House. It has prompted questions about possible conflicts of interest, echo a concern raised by one of Trump’s own lawyers, Sheri Dillon, when justifying his decision not to sell his entire real estate company, the Trump Organization. A buyer, Dillon pointed out, could decide to pay more than market price to gain favor from the president.
A Russian investor?
If the Château des Palmiers were to find a buyer, the transaction would stay confidential. Using shell companies to hide the identity of the buyer is frequent in these types of sales. Moreover, the public registries in Saint Martin, under French administration, don't always provide details about transactions when it comes to private property. Trump would have to reveal the price of the sale, but could keep the name and nationality of the buyer a secret.
This is where the porosity comes into play
This is where the porosity between the business world, the personal life and the public role of the President comes into play. In 2016, before the property was put on the market, a Russian investor asked to see it. According to a real estate company on the Dutch side of the island, the man visited the residence, without any trace of follow-up. This has occurred amid the ongoing investigations into alleged collusion between Moscow and members of Trump’s campaign.
The price could reach $28 million — Photo: Sotheby's
The U.S. President no longer technically runs his real estate holding, since January in the hands of his sons Eric and Donald Jr, as well as a long-term associate, Alan Weisselberg. Trump Sr., however, remains the company's owner. Until now, Richard Nixon has been the only president to have sold property (his New York city apartment on 5th Avenue) only a few days after taking office.
The reasons for putting the Château des Palmiers on the market remain unknown. Trump does not use the villa and is believed to have never actually stepped foot in it. Trump's wife Melania stayed there a few times. “A great lady, very kind,” Andy the caretaker recalls. The income generated by this luxurious resort was somewhere between $200,000 and $2 million for the period from 2014 to mid-2016, according to Trump's tax returns. Prices start as $6,000 a night.
The other troubling element of this tale goes all the way back to Trump’s acquisition of the property. He bought the residence in 2013, through two companies : Excel Venture I LLC and Excel Ventures Corporation, both with addresses in Delaware, a state known as a domestic tax haven in the U.S. We know very little about the amount of the transaction, which will make it hard to determine whether Trump will turn a profit as president in its resale.
Before Trump owned it, the villa was the property of his friend of 20 years, Steve Hilbert. The businessman is 70 years old, and married to a former topless model around Melania’s age. Since 2006, he owns the self-tanning cosmetic brand New Sunshine.
In 2013, Hilbert was facing bankruptcy. Lawsuits were piling up and his Château des Palmiers, which he had been trying to sell for $20 million for 3 years, couldn't find a buyer. His friend Donald Trump came to his rescue. An investigation was conducted, but ended without further action from the federal judge. Some sources whisper the transaction was made for less than $17 million.
A realtor at Sunshine Properties, on the Dutch side of the island, offers his own calculation: "If someone buys Trump’s property for $28 million, they will be doing so for reasons other than the beautiful location."
See more from Business / Finance here