As a presidential candidate, Donald Trump has bragged about the high value of the golf courses he owns across the country. But behind the scenes, his staff has argued to county assessors that several of those same courses are worth tens of millions less.
His triumphs in holding down appraisals on his properties have posed fiscal repercussions for county and local governments such as Iredell County, where he bought a course overlooking Lake Norman.
Nowhere has the conflict between the tax assessments on Trump’s properties and his claims of soaring value been more apparent than in Ossining, New York, where his lawyers argued to the city assessor that his Westchester County golf club was worth $1.4 million in 2015, less than a tenth of its appraised value. On the financial disclosure statement candidates are required to file, he valued it at more than $50 million. The city assessor’s office, which valued the property at $15 million, did not respond to a request for comment.
“You can’t say something’s worth $50 million and then say it’s worth a million and a half,” said Lawrence Hirsh, president of Pennsylvania-based Golf Property Analysts and a former president of the Society of Golf Appraisers. He expressed skepticism about Trump’s statement on his financial statement that seven of his U.S. golf courses are each worth more than $50 million.
“Are there many golf properties out there that are worth $50 million?” Hirsh asked. “I haven’t seen many, and I have appraised as many as anybody.”
In 2013, Trump bought Point Lake & Golf Club Inc., a financially ailing club on Lake Norman, for $6 million.
He devoted as much as $10 million to restoring its grandeur. But after his organization’s appeals, the Iredell County tax assessor last valued the course at $9.7 million, a 64 percent plunge from its appraised valuation of $27 million in 2010.
That translated to a $200,000 to $300,000 reduction in tax revenues – a tiny portion of the county’s overall funding stream from property taxes, but perhaps enough to have a modest “trickle down” effect on its budget, including education spending, said Brady Johnson, superintendent of the financially strapped Iredell-Statesville School District. The North Carolina Legislature slashed funding for public school textbooks, solely financed by the state, from $75 to $15 per student, but the county obtained a federal grant to buy computers so each student could read their books online, Johnson said.
It’s common for commercial real estate operators to do battle with county tax assessors to hold down costs. And a purchase price isn’t the only factor that assessors use to determine tax values. What makes Trump unusual is that he brags both about how much money his golf resorts make and how he fights “very hard to pay as little tax as possible” by arguing that appraisers are overvaluing the properties.
A spokeswoman for Trump’s campaign declined to comment on his tax valuation challenges or to make available Trump’s son Eric or daughter Ivanka, who have played key roles in managing his golf assets.
While Trump’s decision to direct his lawyers to contest any significant bumps in property valuations may be typical for a large real estate developer, his business practices are drawing added scrutiny now that he’s a presidential candidate, especially amid his boasts of having a net worth of $10 billion.
County appraisers in Statesville and Miami defended their offices’ work, saying there are legitimate reasons that valuations of Trump’s golf complexes have sometimes declined, including that sections under renovation are assigned zero value until the work is completed.
Melia Miller, the Iredell County tax assessor, said Trump’s team made a persuasive argument warranting a cut of more than 50 percent in the tax assessment, citing the golf club’s modest income.
Trump’s representatives also challenged appraisals at two of his exclusive golf layouts in Palm Beach County, Florida. They accepted a settlement reducing the valuation of the clubhouse in West Palm Beach but lost appeals the last three years over the valuation of his country club in Jupiter, Florida, set last year at $17.2 million but among seven U.S. golf properties that Trump valued at more than $50 million each.
He listed the Trump International Golf Club in West Palm Beach, whose golf courses he built on parcels leased from the county in the 1990s, as a personal asset worth between $25 million and $50 million. Vince McLaren, Palm Beach County’s golf and country club assessor, said he’d appraised the clubhouse and 27 holes of golf at $16.3 million for 2015. He said Trump’s estimate might have assumed a different use for the land, such as residential development, that would command a higher market value than golf courses.
The Trump campaign did not respond to a question about how he could list leased property as an asset.
Since creating 27 holes in West Palm Beach in the 1990s, Trump has built or refurbished 17 elite golf courses from Los Angeles to Scotland and Dubai. On his financial disclosure statement, he valued them collectively at well over a half billion dollars.
Like the rest of his finances, details of the financial performance of Trump’s golf operations are elusive. He has refused to release his income tax returns, despite decades of presidential candidates doing so, saying he would await the outcome of an audit by the IRS. Nor has he been willing to reveal what tax rate he pays, though he told ABC in May: “I fight very hard to pay as little tax as possible.”
In submitting his financial disclosure statement, he relied on a provision in U.S. ethics laws that allows him to avoid disclosing his business’ profitability and instead to report gross revenues. For his golf operations, he listed total revenues of $301.6 million during the period from Jan. 1, 2015, to May 15, 2016, of which 43 percent, or $131.9 million, came from Doral.
Because federal financial disclosure forms require asset disclosures only in broad ranges, Trump won’t be accused of exaggerating the value of the Lake Norman course. He listed it in a category of holdings between $5 million and $25 million.
A glimpse at Trump’s website, Trump.com, reveals his passion for building his brand in the golf world. In a video, the flamboyant businessman is shown making a fairway shot as Ivanka Trump narrates: “He’d be playing the first nine holes while thinking about the next nine holes that he was going to be developing.”
“I love shaping earth,” Trump says in the video. “It’s a canvas.”
He’d be playing the first nine holes while thinking about the next nine holes that he was going to be developing – how he was gonna move the earth, how he was gonna shape it, how he was gonna make that perfect golf experience.
There’s no indication that Trump, his children or others in his organization have done anything improper in fighting tax assessments.
Iredell County Tax Assessor Miller said it was not unusual for large commercial property owners to appeal revaluations of their properties.
Not everybody does it, however. She said that of the county's 6,503 commercial or industrial parcels, the owners of 339 appealed their 2015 property tax assessments that year.
During his presidential campaign, Trump has not been bashful about saying that he uses whatever legal angles he can to help his businesses – that it’s just about being a sharp businessman.
His gains, however, have been local governments’ losses.
Trump leapt to buy the Point Lake & Golf Club Inc., half an hour north of Charlotte, for a mere $6 million, including $3 million in debt, in 2013. He pledged to pour millions of dollars into upgrading the course designed by pro golfer Greg Norman, and the work began quickly.
Within months, the club’s manager, Gary Arsenault, wrote the Iredell County tax assessor to appeal the proposed $22.6 million valuation on the premises.
Miller said Trump’s team made a strong case for a reduction.
“The 2013 appeal was based on the argument of a downturn in the market, a lower purchase price and that income did not support the higher property assessment,” Miller said. She said the county’s Board of Equalization and Review, which hears property tax appeals, “deemed the information sufficient to justify a change in value.”
Hughlene Burton, an accounting professor at UNC Charlotte, found that curious, since the commercial real estate market was bouncing back from the nation’s financial crisis by 2013. She said it appeared that rural Iredell County lacked the resources to take on a well-heeled organization like Trump’s.
“This is an agency that did not have the resources to compete against his,” Burton said.
She noted that the county gets 60 percent of its revenues from property taxes.
This is an agency that did not have the resources to compete against (Trump’s).
Hughlene Burton, University of North Carolina-Charlotte accounting professor
Miller said, however, that the appeal had been made “through proper channels,” and she saw nothing irregular about it.
Last year, amid a countywide revaluation of properties conducted every four years, the assessor’s office proposed to raise the golf club’s taxable value to $11.3 million. Once again, it ran into opposition from Trump’s representatives.
The parties settled on $9.7 million.
Burton said the county’s most affluent neighborhoods, which are near the golf club, including the homes of NASCAR drivers, were hit by a wave of mortgage foreclosures after the 2008 financial crisis.
“Once that got cleared out, I would have thought the prices went back up,” she said.
“Obviously, it’s not worth $20 million anymore,” Burton said, but she called it “surprising that you’d have a decrease when you put improvements in.”
Outside the nation’s capital, officials in Loudoun County, Virginia, assessed Trump National Golf Club-Washington, D.C, at $23.7 million for 2015, though Trump said on his financial statement that it was worth more than $50 million.
West of Miami, Trump purchased the famous Doral Hotel and Resort through a bankruptcy proceeding in 2012 for $150 million, well above the $106.8 million value that the Miami-Dade County Property Appraiser’s office proposed placing on the nearly 800-acre tract that year. Trump announced that he would sink another $250 million into restoring the luster of the four golf courses, huge spa and 650 guest rooms.
But after Trump acquired the resort, the proposed 2012 assessment was slashed by $19 million, and two years later, after repeated Trump challenges, it sat at $69 million. Last year’s increase to $98.3 million was still far below what he’d invested – and nearly $9 million less than appraisers thought it was worth before he bought it.
Sandra Ruiz, a member of Doral’s nonpartisan city council, charged that the presumptive Republican presidential nominee has preyed on the town, costing tax revenue even while offending its residents with racially charged remarks about Hispanics. She says she will propose a resolution seeking a reappraisal.
“We thought that his name and his brand, and the words that we heard . . . (that) he would actually redevelop and bring greater value to the property and as a result traditional benefits to the city of Doral,” Ruiz said in an interview. “That has not been the case. We have lost more than we have gained.”
“It’s time that Donald Trump pays his fair share.”
Doug Hanks of the Miami Herald contributed to this report.