Inside Trump’s Money-Losing Scottish Golf Paradise

[Zippyjuan]

https://www.bloomberg.com/view/artic...-golf-paradise

The president’s Turnberry deal demonstrates his love of the sport — and his dubious business judgment.

Fresh off the NATO summit and before he meets with Russian President Vladimir Putin on Monday, President Donald Trump is expected to play at least a couple of rounds of golf this weekend at Trump Turnberry.

Turnberry is a venerable British Open course that Trump purchased in 2014 for what was reportedly about 36 million pounds (or $63 million at the time) in cash. He then renovated and relaunched it over the following two years. It’s a breathtaking property that borders choppy, gray seas, and features fairways swollen with undulating turf, knotty roughs and sprawling greens.

Despite its virtues — and despite financial disclosure forms the president has filed in the U.S. suggesting otherwise — Turnberry appears to have largely lost piles of money. That makes it a lesson in the strengths and weaknesses of the president’s instinctive and haphazard approach to business and politics, reminders of longstanding problems that have dogged him throughout his career, including financial conflicts of interest that have taken on new traction with his ascent to the White House.

According to corporate filings in the U.K., Turnberry lost $36.1 million in 2016 (the most recent figure available) on revenue of just $12 million. The operation’s debt load nearly doubled between 2015 and 2016, according to the filings. Turnberry has also been the subject of congressional hearings that included testimony speculating about how Trump arranged financing to buy that course and fund his others in Scotland and Ireland. Eric Trump, the president’s son, has been quoted as saying that some of his family’s funding for its golf business came from Russia (Trump fils disputed the account).

The Washington Post recently took a close look at the $400 million in cash that the Trump Organization spent on acquisitions between 2006 and 2015, a period that included the Turnberry purchase. Trump has historically been loath to put his own funds into any deal, preferring instead to borrow money, so deciding to change course and lay down piles of cash was curious. Eric Trump told the Post that none of the cash came from outside investors or from selling other Trump properties. Instead, he said, the family’s existing businesses — a handful of commercial buildings in New York and some licensing deals for Trump-branded hotels and apparel — gave them all the “incredible cash flow” they needed.

Perhaps. But that explanation runs up against the fact that the Trumps also unsuccessfully tried to borrow money from a major Scottish bank in 2008 and 2009 to buy and redevelop a landmark hotel in St. Andrews, Scotland, according to reporting last month from The Scotsman.

Trump could clear up some of this confusion about Turnberry and his sources of income by releasing his tax returns, but he has refused to do so. It’s also a topic of discussion that’s unlikely to go away. Investigators working for Robert Mueller, the special counsel who’s looking at possible links between Trump’s campaign and Russian meddling in the 2016 election, are reportedly examining whether Trump associates laundered financial payoffs from Russian officials by channeling them through offshore accounts.

Although grand, gorgeous and one of the world’s top golf courses, Turnberry hasn’t been a reliably profitable business for decades. Starwood Hotels & Resorts, frustrated with the business, sold Turnberry to Leisurecorp, an investment vehicle controlled by Dubai’s royal family, for about $100 million in 2008. Six years later, Leisurecorp sold Turnberry to Trump for about $63 million.

"I paid all cash. I then spent a tremendous amount of money on renovating the hotel and the golf courses," Trump told Reuters in a 2016 interview. "It’s incredible."

Residents in Ayrshire, the county where Turnberry is located, worried that the president might Trumpify the property by layering a casino aesthetic across it. He didn’t, but did give Turnberry some Trumpy embellishments.

He hung an oil painting of himself in the lobby. The restaurant offers Trump-branded wines at steeper prices than better European vintages on the menu, and he has installed two gigantic, out-of-context Romanesque fountains adorned with lions on the grounds. An 8-foot-by-10-foot chandelier hangs in the hotel’s main stairwell, and Trump’s contractor explained in a promotional video that the reason the Trump team liked it was because it was made by a guy “in New Jersey” who “designed and built the world record-largest chandelier.”

Trump has said he has poured 200 million British pounds ($265 million) into his Turnberry makeover. But his own general manager for the resort has contradicted him, saying in news interviews that the figure is closer to 140 million pounds ($185 million). Even that figure is artificially high because it represents investments Trump has pledged, not what he has actually spent. And, by the way, that figure is padded to begin with because it also includes Trump’s purchasing price for the property.

An examination of local building permits by The National, a Scottish publication, showed that Trump’s spending on Turnberry appeared to be fraction of what he claimed.

[spudea]

another garbage thread, running a business obviously involves a lot of front loaded costs from renovating the property and you are using outdated revenue figure from 2016, the 2017 revenue at Turnberry was 20 million. The property is successful and will be profitable within a year and be making many millions long after the Zippyjuan is long gone, dies pennyless.

Revenues Soar At Trump's European Golf Courses

Donald Trump’s three European golf courses have long looked like money pits, with not a single one recording an annual profit from 2014 to 2016. But things may be turning around for the clubs, whose collective revenues nearly doubled in 2017, according to an analysis of filings from Great Britain, Ireland and the United States.

At Trump Turnberry in Scotland, home of the president’s most prestigious golf course, revenues jumped from $10.9 million in 2016 to $20.4 million last year. Business more than doubled at the Trump International Golf Links in Ireland, from $6.6 million to $14.2 million. And prospects are looking better at the smallest of the president’s three European courses, the Trump International Golf Links in Scotland, where revenues climbed from $3.2 million to $3.4 million, according to Trump's latest financial disclosure report, made public on Wednesday.

What’s causing the surge in business? In part, it appears the many millions the Trump family has dumped into the courses are finally beginning to pay off. Trump Turnberry’s famed Ailsa course, host to four British Opens, reopened in June 2016 after getting a facelift on several holes. The temporary closure helped push down revenue in the first half of 2016. Sales began to rebound in the second half of the year, when the course was back in business, but then jumped an additional 24% or so in 2017. In June 2017, the Trump Organization opened a second course at the property, named King Robert the Bruce.

After pouring $27 million into the Trump International Golf Links in County Clare, Ireland, from 2014 to 2016, the Trump Organization predicted revenues would increase in 2017, just as they did.

Fluctuations in the British pound have also had an effect. The value of the currency dropped 21% against the dollar from 2014 to 2016, largely thanks to Brexit, deflating Trump’s revenues in dollar terms. But the pound regained its footing in 2017, which presumably juiced the figures that Trump reported for his two Scottish courses on his most recent financial disclosure report.

What remains unclear: whether all that new revenue will translate into profits. Trump’s financial disclosure report, filed with the U.S. Office of Government Ethics, lists only 2017 revenues for each course. If this year’s calendar matches up with last year’s, the Trump Organization will file additional paperwork in Scotland and Ireland this fall detailing 2017 profitability.

[Zippyjuan]

More revenue does not necessarily mean profits. Depends on what expenses are too.

What remains unclear: whether all that new revenue will translate into profits.

Fluctuations in the British pound have also had an effect. The value of the currency dropped 21% against the dollar from 2014 to 2016, largely thanks to Brexit, deflating Trump’s revenues in dollar terms. But the pound regained its footing in 2017, which presumably juiced the figures that Trump reported for his two Scottish courses on his most recent financial disclosure report.

[phill4paul]

Lol.

[NorthCarolinaLiberty]

What remains unclear: whether all that new revenue will translate into profits.

Yes, versus all the merchants who have a crystal ball and know they will have profits! Maybe we should ask Miss Cleo!

[Anti Federalist]

Yeah, OK, so name me anybody in the last 30 years that was president that actually ran and owned real businesses that made real money employing real people and not having spent their entire lives leeching a government check.

I think you'd have to go all the way back to Carter's peanut farms.