The $250 million civil fraud trial of the Trump Organization, which began with great acclaim this week in a Manhattan courtroom, will bring Trump’s Hudson Valley holdings back to public prominence.
Yet to be decided is whether the Trump Organization will continue to own and operate three major holdings in the region: Trump National Golf Club in Briarcliff Manor; Trump National Golf Club Hudson Valley in Hopewell Junction; and the historic Seven Springs estate in Bedford, North Castle and New Castle.
These three facilities were part of the case brought by state Attorney General Letitia James, who alleged that the Trump Organization had wildly exaggerated the value of its holdings in its statements of financial condition that are used by lending institutions when determining whether to approve loans.
Supreme Court Justice Arthur Engoron in late September ruled that Trump committed fraud with his exaggerated valuations of Trump Tower in Manhattan, Mar-a-Lago in Florida, Seven Springs, as well as his golf courses, including those in the Hudson Valley.
The non-jury trial, which is expected to grind on until sometime in December, concerns six remaining claims, which include how much the Trump Organization will owe in penalties to New York state. James is seeking $250 million and a ban on Trump doing business in New York.
That could impact Trump’s golf courses in Briarcliff and Hopewell Junction. It could also determine the fate of Seven Springs, the sprawling estate that covers more than 200 acres where Trump first proposed a world-class golf course and luxury housing development. Rebuffed on his golf course plan, Trump scaled back to a much smaller luxury home development.
That too failed to get off the ground in several iterations, with approvals for the final seven-lot subdivision in Bedford never finalized. That led Trump’s decision to put much of the land under a conservation easement in 2016.
Trump, the leading candidate for the Republican nomination for president in 2024 who faces four indictments on state and federal charges, appeared in court on the first two days of the trial. There, he has engaged in his trademark political theatre outside of the courtroom, assailing the judge and the entire legal process.
“This is a judge that should be disbarred,” Trump said on Monday. “This is a judge that should be out of office. This is a judge that some people say could be charged criminally for what he’s doing. He’s interfering with an election, and it’s a disgrace.”
In Briarcliff Manor, Mayor Steve Vescio said he’s concerned if Trump loses control of the course, which the former president bought from the struggling Briar Hall Golf and Country Club for $7.5 million in 1996. After the investment of a reported $45 million in redesigning the course and building a new clubhouse, the new Trump National was unveiled in 2002.
Vescio, whose father, William, clashed with the Trump Organization while village mayor from 2004 to 2015, said he’s concerned that another entity might not maintain the course at the same high standard as the Trump Organization.
“There was a long approval process for the new course, and Trump reactivated a site that had been neglected,” Vescio said. “They have taken good care of the property, and have worked well with the village. They’ve been a good neighbor.”
Engoron found that from 2013 to 2020, Trump’s financial condition reports included a premium of 15% or 30% premium on value, based on the Trump brand, on seven golf courses, including Trump National Hudson Valley in Hopewell Junction.
At Trump National in Briarcliff Manor, Trump in 2014 valued the golf club portion at $16.5 million when it was considering donating a conservation easement. Yet that same year, the club’s value more than tripled to $73 million in his financial condition report.
Trump’s legal team had argued that his appraisers had used a “fixed assets” approach to valuation in the higher value, which included what Trump spent to acquire and maintain the property. But Engoron found such a valuation was “false and misleading.”
“The price for which you purchase property is not necessarily the price for which you can sell it,” he wrote.
The lawsuit also alleges that Trump inflated the value of Trump National Hudson Valley because the financial statement did not disclose that Trump has a lease for the property, and did not account for the rent the company paid to the landlord.
David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at firstname.lastname@example.org