Years before he became president, Donald J. Trump got a very sweet deal from some very big financial institutions.
First, they agreed to lend him a total of $770 million to build a 92-story skyscraper in downtown Chicago. Then, when the 2008 financial crisis hit and Mr. Trump defaulted on his loans, those same banks and hedge funds either gave him years more to repay his loans or simply forgave much of what he owed. The Internal Revenue Service considers such forgiven debts to be taxable income, but Mr. Trump managed to avoid paying almost any taxes.
On Wednesday, after The New York Times reported on the project’s travails, Mr. Trump defended his handling of the Trump International Hotel and Tower in Chicago.
“I was able to make an appropriately great deal with the numerous lenders on a large and very beautiful tower,” the president wrote on Twitter. “Doesn’t that make me a smart guy rather than a bad guy?”
There is no question that the deal was a great one for Mr. Trump. His lenders — including Deutsche Bank and Fortress Investment Group, the hedge fund and private equity firm — had the right to seize the building as collateral but opted not to. Their conclusion was that it would be simpler and safer to reach a peaceful resolution to the dispute with the litigious and publicity-seeking reality-TV star.
As a result, about $270 million of debt that Mr. Trump owed to Fortress and other private equity firms and hedge funds was wiped away. Mr. Trump still owes Deutsche Bank a total of at least $330 million, including $45 million on the Chicago project. Those Deutsche Bank loans, which Mr. Trump has personally guaranteed, are due in 2023 and 2024.
In his tweet on Tuesday, Mr. Trump implied that his Chicago tower’s struggles were the result of politicians having run the city “into the ground.”
That is revisionist history. Mr. Trump and his daughter Ivanka have repeatedly boasted that the skyscraper was a great place to live. “I love Chicago” was the headline on a piece Mr. Trump wrote for The Chicago Tribune about his building in 2014.
The reality is that Mr. Trump’s hotel-and-condo tower has struggled compared to other nearby buildings — in part because of the tarnished Trump brand. Retailers balked at renting space in the skyscraper’s mezzanine interior. The Real Deal noted last year that the tower only had one retail client and called the skyscraper “Chicago retail’s biggest failure.”
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