Donald Trump’s Palos Verdes Golf Course Has Holes in It (EXCLUSIVE)

Trump National Golf Course Palos Verdes
Stephen Shugerman/Getty Images

In 2006, Donald Trump opened his golf course in the wealthy Los Angeles suburb of Rancho Palos Verdes — marking his first foray into West Coast real estate. Already a Hollywood figure as the star of NBC’s “The Apprentice,” Trump announced his presence in Tinseltown with characteristic fanfare.

He announced that the project cost a staggering $264 million — making it, as he said many times, the most expensive golf course anywhere in the world.

“I do not think there is anything close,” he said.

The price tag was key to the marketing of the course. It fit with his over-the-top brand. Located in close proximity to Hollywood, the Trump National Golf Club often hosted celebrity tournaments, with stars like Michael Douglas, Mark Wahlberg, Catherine Zeta-Jones and Samuel L. Jackson — as well fellow reality stars like Caitlyn and Brody Jenner.

But the reality of the course’s finances was a far cry from the bluster. Just two years after it opened, Trump’s representatives told the L.A. County Assessor that it was actually worth just $10 million.

That appraisal — never before reported — illustrates the wide gulf between Trump’s public claims and private realities. As he campaigns for president, Trump has touted the course as “one of the great pieces of land in the world.” And yet records submitted to the assessor showed that the course was suffering from declining revenues and struggling to attract golfers.

Trump has also reported widely varying appraisals of Trump National Golf Club in Westchester County, New York. In financial statements submitted to federal elections officials, he has claimed that the course is worth more than $50 million. In news accounts, he has said that the 101-foot waterfall alone cost $7 million. And yet last month, an ABC News investigation found that he told tax officials the property was worth just $1.35 million.

In media accounts of the Palos Verdes course, the $264 million figure was often taken at face value, though it appears to have no relationship to the actual value of the course.

“The top golf courses you can buy… maybe go for $25 million,” says Arthur Gimmy, an appraiser who wrote a book on golf course valuations.

Trump bought the property — which included land for residential development — in 2002 for $27 million. The previous owners had built a golf course on the site and won approval to construct 75 homes, but were forced into bankruptcy when the 18th hole collapsed into the ocean.

Trump vowed to rebuild the hole — at a claimed cost of $61 million — and turn the property into the best golf course in the state — better than the famed Pebble Beach.

Trump also planned to sell 36 luxury homes. He also wanted to turn the course into a private club, with memberships costing $300,000. That exclusive access would drive up the value of the homes. But up against California Coastal Commission mandates for open access, the plan went nowhere. It remains a public course.

He also ran into difficulty with local building regulations, at one point suing the city of Rancho Palos Verdes for $100 million.

Though he later settled that dispute for undisclosed terms, he is still at odds with the Coastal Commission. According to Zach Rehm, a commission staffer, the Trump course is currently under investigation — and faces a potential fine — for allegedly removing three man-made waterfalls without a permit.

In a statement to the Daily Breeze last year, the Trump Organization said it was removing the waterfalls in response to the drought, and believed it was in compliance with coastal protection rules.

Trump was able to build half a dozen mansions. But as the real estate market collapsed, the properties were slow to sell. Property records show that only three parcels — one house and two vacant lots — were sold in the first four years of the course’s operations.

As the market recovered, the other five homes and 14 vacant lots have also sold, but at prices less than half of the 2007 market peak. A decade after the course opened, only 11 homes have been built. Seven are under construction, and another 14 lots are still unsold.

In 2008 — at the same time he was suing Rancho Palos Verdes for $100 million — Trump’s representatives approached the assessor’s office seeking a significant tax break. On the tax rolls, the golf course was listed at $21.8 million — befitting a higher-end course. Trump’s representatives argued that it should be appraised at $10 million.

Neither Trump’s tax agent, Wade Norwood, nor the Trump campaign responded to messages seeking comment.

Trump of course had every incentive to lowball the value of his property for tax purposes. But after reviewing the course’s balance sheets — which are part of the public record — the assessor confirmed that the property was underperforming. Three times in three years, the assessor agreed to slash the value of the course, ultimately cutting it in half to $10.7 million. That amounted to a tax cut of about $110,000 per year.

“It’s dropped in annual play significantly,” county appraiser Matt Sell told the Assessment Appeals Board during a brief hearing on Trump’s request. “The assessor recognizes this… They’re trying to attract more golfers.”

The course hosted 30,000 rounds of golf in 2008, at $190 apiece. Over the next two years, that figure dropped to 27,000 rounds and then 23,000 rounds — forcing Trump’s management team to cut average green fees to $167. Net income dropped from $1.4 million to $1 million over that period.

The course has since rebounded somewhat, and is now appraised at $15 million. Trump also is getting close to winning approval for subdivision of 23 additional lots on the west side of the course, which would allow him to sell them off to home builders. Lots at Trump National are currently going for about $1.5 million.

Without knowing how much Trump and his investors actually pumped into the course over the years, it’s hard to evaluate whether the investment will ultimately pay off. But one thing is clear from the property records: Trump’s boastful public claims were a far cry from reality.

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  1. Greg Danyew says:

    Such bull. Since when do people tell the tax assessor how much their property is worth.
    Man, you guys must sing to a tone-deaf audience. 👎

  2. Steven Souza says:

    Hopefully, the course has 18 holes in it. If it doesn’t, there are going to be some pretty long rounds of golf played there.

  3. You know, just because you spend $7M building a waterfall that doesn’t mean the value of the property goes up one dime. So the guy likes to spend his money building lavish properties to put his name on. OMG someone running for president has an ego!!!! Say it ain’t so!!!

    This article is laughable in its twisted broken path to some kind of weak attack on Trump, trying to squeeze some kind of ethical question against him when there are myriad REAL, demonstrated, documented ethical issues along the entire path of Hillary’s public career. Imagine what else we’d find out if these liberal media lapdogs spent 10% of this anti-trump energy investigating Clinton instead of Trump.

  4. Brian Weiner says:

    Integrity and honesty are cornerstones to leadership. How can these behaviors and values expressed in your article above embody the Republican party? I do not believe the Republicans are behind Trump…Eventually love of country has to Trump hatred of Hillary.

    • Suzuki says:

      Yeah integrity and honesty are cornerstones to leadership… So let’s elect the lady under investigation by the FBI for hiding a server + using it to send sensitive and later top-secret information unsecured, uses the Clinton foundation as a slush fund with shady business deals from countries that oppress women,wants to topple another dictator with a no-fly zone in Syria, and has called minorities super predators, joked about being on colored people time for tardiness, and was called a racist in the 2008 election for highly questionable comments. Full of integrity, full of honesty, full of values

    • Rather have somebody in the white house who exaggerates business numbers than one who lies to the face of Benghazi victims’ families, blatantly ignores the law and exposes classified information for her own personal convenience, and makes all her decisions based on how it affects opinion polls. I read this article and I see evidence of a man that knows how to work a complicated system WITHIN THE LAW to get the best result for his business. Sounds exactly like the kind of person we need to take over the business of running the executive branch.

      • The Truth says:

        If you read this article and don’t see evidence that Trump’s statements can’t be trusted as factual, either you don’t understand what evidence is or you’re simply delusional. Is someone getting “the best result for his business” when he sinks $264 million into a property eventually worth — by his own admission — only $10 million? If anyone else made that deal, Trump would be the first to call him/her “a loser.” Is this the kind of deal that will “make America great again”? When it comes to Trump’s campaign promises — often buttressed with “I know how to make great deals”– what is Trump “exaggerating” and what can be trusted? Exaggerating? Everything. Can be trusted? Nothing.

  5. Excuse me, but Variety is an entertainment paper, not a political news rag. Shame on you for interjecting politics into entertainment, where your personal bias is showing

    • jsm1963 says:

      Trump is a reality TV star. It’s also relevant because it’s in Hollywood’s backyard and many celebrities have used it.

  6. Ysog says:

    Hillary’s beta boys doing their part for Her. Good job, worms.

  7. nohw says:

    Yes, yes, we know who Variety is stumping for. What, no articles on Hillary’s illegal private email server, loss of $6 billion under her state dept, and her Benghazi debacle? Come on Variety, at least try to appear fair and impartial.

  8. Ruth Deutsch says:

    Thanks for showing us another underside of this egomaniacal Presidential candidate. I wish that everyone could be informed as well of Hillary’s shortcomings. Am I a Bernie supporter? Yep.

  9. Ted Faraone says:

    Perhaps we should consider Trump’s public claims as to how he would renegotiate America’s trade and defense treaties in the same light as now shines on his public claims about the Palos Verdes golf course.

    • sammyglick says:

      As in, that he’s a total windbag who hasn’t a clue about the world, international trade deals, et cetera.

      Naturally, Trump’s doltish supporters will look at further evidence of his arrogance and lack of true business savvy as a ‘liberal media hit job’. The rest of reality, will see Trump for what he is — a bully who has lived his whole live protected by the bubble of great wealth.

  10. CMarks says:

    Early solution to Mr. Trump overestamiting (or inflating) the actual worth of his properties -they should be taxed at the value the Donald determines rather than the value determined by an appraiser. I think suddenly many of Mr. Trump’s properties would take on an entirely new, and possibly more accurate, value.

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