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.