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Despite Trump Visits, Revenues Actually Appear To Be Down At Mar-a-Lago

(Source: www.forbes.com)

Donald Trump spent 10% of the first year of his presidency at Mar-a-Lago, hosting world leaders, glad-handing with members and frequenting his nearby golf course. All that attention helped turned the already-historic property into the “Southern White House” and a new nexus of power. From a business standpoint, however, 2017 wasn’t nearly as kind to the Palm Beach club.

Mar-a-Lago did $25.1 million in revenues last year, according to Trump’s latest financial disclosure, released Wednesday. That’s down an estimated 15% from the previous year.

Trump last reported revenues of $37.3 million for the nearly 16-month period spanning January 1, 2016 through April 15, 2017. Prorating that sum to an annual figure suggests Mar-a-Lago notched about $29 million in 2016 revenues.

One likely reason is that—despite the Trump Organization reportedly doubling Mar-a-Lago’s initiation fee to $200,000 shortly after the 2016 election—the club has been hit with event cancellations due to the president’s divisive rhetoric. According to The Washington Post, at least 19 charities pulled out of events scheduled at the property in the wake of Trump’s remarks about a violent white-supremacist rally in Charlottesville last summer. Forbes estimates that those cancellations could have cost the Trump Organization up to $4 million in lost revenue.

But even with the apparent year-over-year decline in sales, Mar-a-Lago’s business has still grown by about 9% since Trump announced his candidacy for president. In 2015, the year the real estate mogul launched his campaign, Mar-a-Lago did an estimated $23 million in revenues, according to a previous Trump filing.

Even Trump has acknowledged that he’s profiting from politics at the club. “The manager told me recently, he said, ‘Boy, it is actually the best year we’ve ever had at Mar-a-Lago,’” Trump said in a 2016 sworn deposition. “I was looking at the numbers. I said, ‘What do you attribute this to?’ He said, ‘The campaign.’”

Built in the 1920s as a winter estate for cereal heiress Marjorie Merriweather Post, the extravagant home originally boasted 58 bedrooms and 17 manicured acres of putting greens, citrus groves and greenhouses. Post shipped in three boat loads of stone from Genoa, Italy to construct its exterior walls and installed a gold-leaf ceiling modeled after the “Thousand-Wing Ceiling” in Venice’s Accademia Gallery .

When Post died in 1973, she offered Mar-a-Lago to the federal government for use as a presidential retreat. But in 1981, facing massive maintenance costs, the government gave the estate to the Marjorie Merriweather Post Foundation. Trump bought it four years later for about $10 million—$5 million for the massive home, a reported $3 million for its lavish furnishings, plus another $2 million for 400 feet of prime beachfront directly across the street.

In 1995 Trump turned Mar-a-Lago into a private club with an oceanfront swimming pool, beauty salon, spa, and tennis and croquet courts. Today Forbes values the property—admittedly one of the most difficult assets in the Trump portfolio to price—at $160 million, or 16 times what Trump paid for it.

Part of that increase comes from the fact that Trump turned it into the “Winter White House” that Post first envisioned. “Many of the world’s great leaders request to come to Mar-a-Lago,” Trump said during a summit with Japanese Prime Minister Shinzo Abe in April. “They like it; I like it.” But, as Trump’s latest financial disclosure indicates, the enthusiasm of paying customers might be fading.

More Info: www.forbes.com

Money Matters
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