Everyone knows the condo bust in South Florida is a financial disaster. But now that Donald Trump is involved, it's a celebrity disaster. A federal class action lawsuit has been filed against the developers of the Trump International Hotel & Tower, alleging that buyers were misled to believe they were buying the Trump brand.
You may have noticed that the Tower on A1A in Fort Lauderdale, with its wave-shaped architecture and blue-tinted glow, is suspiciously empty. That's because four years after breaking ground, it's still not finished. Buyers in the 298-unit complex recently received a letter notifying them that, thanks to the "uncharted economic climate that we are adapting to," if at least half of them didn't close on their units, the hotel would not open. And by law, if the hotel doesn't open, residents can't stay there. Oh, and by the way, the letter said, the building may not be able to keep the Trump name.
See, the Donald is a smart man (aside from the comb-over), and during the real estate boom, he put his name on at least five condo projects in South Florida. It's now unclear what his role was in the International Hotel & Tower, but the major developer was Roy Stillman of New York.
Yet brochures for the project included a letter from Trump himself, saying, "It is with great pleasure that I present my latest development, Trump International Hotel & Tower, Fort Lauderdale."
In 2006, Trump came down to Fort Lauderdale Beach and hosted a lavish party for the Tower buyers, featuring special guest Wyclef Jean. New Times writer Trevor Aaronson chronicled the scene, noting that most people in the audience probably had no idea the project wasn't really Trump's baby.
Last month, Trump's company sent notice to developer SB Hotel Associates (which is run out of Stillman's New York office), saying it's in default of a licensing agreement for the use of the hallowed Trump name, according to a letter SB Hotel sent to buyers. (Michele Conte, the SB Hotel contact person listed in the letter, could not be reached for comment this morning).
Now, Miami attorney Jared Beck has filed a class action suit arguing that buyers should get refunds on the deposits they put down on the condos, plus damages. On buyer named in the suit, Gaetano Salerno, put down $160,000 on a $799,000 unit.
"The advertising and promotional materials represented that the Condominium Hotel was an elite 'Trump Property,'" Beck wrote in court documents. "In fact, there is no agreement in place which guarantees that the Condominium Hotel can operate under the 'Trump' banner once it is completed."
Fort Lauderdale attorney Joseph Altschul has also filed Broward County Circuit Court suits on behalf of 55 buyers in the project, alleging, among other things, false advertising.
"People bought this project based on Trump being the developer," Altschul says."They knew people would pay more and they knew people trusted the name."