President Trump’s eldest son, Donald Jr., is expected to launch two residential projects in India for the Trump Organization in the coming weeks, continuing the family’s promotion of the Trump empire despite concerns over the president’s potential conflicts of interest with foreign governments.
The Trump Organization vowed early on there would be “no new foreign deals” during Trump’s tenure as president; these two projects in India were inked before his election.
But the high-profile launches demonstrate that the pledge comes with an asterisk — agreements made years ago can move forward or be revitalized, such as the Trumps’ 2007 deal to build a luxury beachfront resort in the Dominican Republic that may be revived, according to an Associated Press report.
The president did not divest his assets after he was elected and instead placed his business empire into a trust controlled by sons Don Jr. and Eric, who has traveled to Uruguay and accompanied Don Jr. to introduce a Trump-branded luxury golf course in Dubai and a hotel in Vancouver.
The Trump Organization has licensed its name to five projects in India despite a sluggish market for high-end luxury residences. The new Trump-branded tower in the eastern city of Kolkata will have apartments priced at $765,000 and under; a project in the capital suburb of Gurgaon will feature units starting at $1.8 million and golf course access. The other projects include two residential towers in the quiet city of Pune, a 75-story tower still under construction in Mumbai that will have a shimmering gold facade, and a proposed office in Gurgaon.
“We are long-term, extremely bullish on India,” the Trump Organization said in an emailed statement. “The success of our existing projects and the strong inquiries that the teams are seeing from upcoming projects even before launch has been incredible. We are optimistic about the future and very proud of our existing presence in the market.”
The Mumbai tower is being built by the family company of Mangal Prabhat Lodha, a powerful state legislator and state vice president of the governing Bharatiya Janata Party. The Lodha Group was investigated for $30 million in untaxed revenue and fined $1 million; the company eventually settled the tax bill for an undisclosed amount. Earlier this year, a Lodha spokeswoman, speaking on the condition of anonymity, declined to comment on the case, saying it was “old” and was not related to the Trump project.
Basant Bansal, co-founder of M3M India, one of the developers of the Gurgaon high-rise, caught the attention of tax investigators twice, records show, once in 2008 and again in 2011, when authorities seized cash worth $48 million in a raid on the company’s offices. A tax investigator said Bansal ultimately paid the taxes he owed. M3M and one of its employees have been charged with bribing forest officials to clear-cut land in a case that is still pending; a spokesman for the company has denied wrongdoing. Brothers Basant and Roop Bansal established M3M, which stands for “Magnificence in the Trinity of Men, Materials and Money,” and declined further comment.
“A company owned by the president of the United States shouldn’t be risking potential corruption investigations and working with foreign government officials who may be corrupt,” said Richard Painter, a frequent critic of the president who served as the ethics lawyer for the White House during the George W. Bush administration. “They shouldn’t be trying to do all these deals all over the world. It just isn’t working.”
Critics on Capitol Hill and elsewhere have also questioned the fact that taxpayer-funded Secret Service agents accompany the Trump sons on these private business excursions, racking up thousands in hotel bills and straining the agency’s budget. Don Jr. recently eschewed security on a private moose-hunting trip to the Yukon, the New York Times reported, after asking to be removed from Secret Service protection. It’s unclear whether he has rejected a Secret Service detail altogether and whether he will have one on his trip to India in the coming weeks. But people close to him say they have suggested that he keep the detail for his own safety and for that of his family.
Trump’s licensing arrangements in India have brought in between $1.6 million and $11 million in royalties since 2014 — including royalties stated in a range from $100,001 to $1 million last year from the Kolkata project, Trump’s financial filings show.
The Trump scion will arrive to a luxury real estate market in India that’s decidedly moribund, analysts say. Already sluggish sales have been slowed by a double whammy of recent changes in the tax system and a move to combat tax cheats by demonetizing high-value currency. Pinched developers have taken to luring high-dollar investors with one year’s free rent and gifts of luxury cars and jewelry.
“The luxury market has been in distress for about three years now,” said Pankaj Kapoor, the managing director of Liases Foras, a Mumbai real estate rating and research firm. “Prices for the last four years haven’t gone up, inventory has grown and sales have been really bad. There’s a big gap between prevailing prices and what buyers can afford.”
Kolkata has about 428 unsold units in the $460,000 to $1.5 million price range, a three-year backlog in inventory, while Mumbai has 17,478 unsold units, a backlog of six years, Kapoor’s analysis shows.
The Trump-branded properties have faced slow sales of their own in the down market, complicated by the fact that the apartments are often listed at higher prices than nearby real estate because of the name — about 30 percent higher in the case of Trump Tower Mumbai, which is about 60 percent sold, the company has said. Real estate experts in India have offered differing views on whether Trump will still appeal to affluent Indians after his immigration stance and other controversies. Branded properties — such as those endorsed by a sports team or Bollywood stars — don’t always perform well, Kapoor noted.
Kolkata, also known as Calcutta, is a place apart from glittering Mumbai or the power enclaves of New Delhi. It’s a city of 5 million, chaotic, vibrant, lined with colonial-era mansions and abandoned factories turned mossy black from humidity. There is money here, to be sure, largely from old mercantile families, but it’s a very niche market, experts say.
“Kolkata, frankly speaking, is one of the poorest performing markets in India,” Kapoor said. “I don’t know why he’s considering Kolkata — he’s not being advised well.”
The Trump Organization has long isolated itself from the vagaries of foreign real estate markets by opting for lucrative name-licensing deals over its own investment, and has in the past made money even when ventures falter or fail, analysts say.
The Indian developer who helped orchestrate the two latest projects, Kalpesh Mehta of Tribeca Developers, touts himself on his company’s website as Trump’s “exclusive India representative” and had promoted his connection to the Trump family, using the president’s photo and a “welcome message” from the elder Trump to promote the brand on the website until May. Mehta did not return calls or emails for comment.
In Kolkata, developer Unimark Group is recasting existing plans for a residential tower in the eastern part of the city, which has in recent years undergone a modest boom in technology companies. Harsh Patodia, the chairman of Unimark, said the launch of the new tower would happen before December.