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The Trouble With Trump

Major victims of the nation’s most recent economic crisis were high-end condominium projects in cities like Atlanta, Denver, and Charlotte. These projects all had a familiar face behind them—Donald Trump.

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In the middle of the recent U.S. condo boom, billionaire Donald Trump offered several Atlanta developers a valuable commodity—his name. They paid the Manhattan tycoon and Apprentice star to stamp his moniker on their condo projects and use his marketing staff and architectural teams.

By the time the real estate collapse was under way in 2007, Trump had lent his name to at least 20 U.S. projects and several more overseas. Since then, many of the projects have been delayed, scrapped, or have ended up back in the hands of the bank.

The latest project that could well be headed back to the lender: Trump Towers Atlanta, whose first phase included a $260 million 48-story building. Today, the project was foreclosed upon, a victim of a convergence of factors, including the real estate crash, the lending shutdown, and widespread job cuts.

In the real estate crisis of the early '90s, Trump came close to bankruptcy because of personal guarantees on his debt. In this cycle, he’s avoided guarantees and protected his financial empire, but all the struggling projects may have tarnished his golden brand in real estate.

Trump certainly isn’t immune to financial problems. Trump Entertainment Resorts filed for Chapter 11 bankruptcy protection last year. Last week, Trump found himself in a New Jersey courthouse trying to convince a judge to let him keep control of the three Atlantic City hotel-casinos that bear his name.

I don’t like the B word,” Trump said from the stand.

His other real estate projects may not have resulted in bankruptcies, but several planned condo projects across the country have been problematic. Some managed to rise despite problems; others never got beyond the initial marketing phase.

"I think sometimes the inexperience and perhaps the egos of his team caused some issues,” said one person familiar with Trump's model. “I think they thought some of the local developers were a little more knowledgeable than they actually were."

In Denver, Trump planned to develop a high-rise, five-star condo tower with hotel next to the historic El Jebel Temple. He pulled the plug on the project in November 2007.

In Charlotte, he put about three acres under contract in downtown near the headquarters of Bank of America and what was then Wachovia Bank. It was to be the site of a potential mega-development including luxury condominiums, a five-star hotel, and an office tower. Trump let the contract expire in late 2007.

In Baja, California, a luxury hotel-condo project tanked, leaving angry investors out of about $32 million in deposits. In 2009, Trump filed a lawsuit against the Los Angeles developer that paid to use his name for the oceanfront condo project.

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