Donald Trump and his lenders have inked a new loan agreement that resolves long-standing litigation related to the development of his Trump International Hotel & Tower in Chicago.
Trump and his lenders, led by Deutsche Bank Trust Co. Americas and Fortress Credit Corp., last week agreed to extend the term on an approximate $600 million construction loan for five years. So, all litigation between the parties has been dismissed.
The dispute and resulting flurry of lawsuits began in late 2008, when Trump defaulted on a $640 million construction loan for the 92-story skyscraper that now vies for attention along Chicago’s skyline.
Trump sought to excuse a $330 million repayment due Nov. 7, 2008, and extend the loan indefinitely because the global economic crisis had created a “once-in-a-lifetime credit tsunami,” he said in the lawsuit. Trump also sought $3 billion in damages from Deutsche. The lender fired back, claiming the hard-charging developer personally owed it $40 million because of the default.
In March 2009, the parties agreed to temporarily shelve the lawsuits while they tried to negotiate a settlement. “We are pleased to have restructured the debt on the property with our lenders and to have resolved this matter with the Trump Organization,” said Deutsche spokesman John Gallagher.
Altogether, about 60 percent of the 486 residential condo units and 336 hotel condo units have been sold, up only very modestly from a year ago. The building’s marketing began in September 2003. Still, Trump said he is pleased with the building’s performance.
“I’m amazed [at the 60 percent level,] Trump said Tuesday “That’s one of the reasons I’m getting a long-term extension of financing. We have sold that many units in a depression.”
Prices on some have the remaining units, which include some of the largest ones, have been cut to be “commensurate with the time,” Trump said.
During the second quarter, the average selling price of the 20 residential condo units sold by the developer was $673 a square foot, compared with a $741 per square foot list price on the resale market, according to Appraisal Research Counselors.
“We’re going to have virtually the only building that’s financed and complete,” Trump said in a not-too veiled reference to the stalled Chicago Spire and Waterview Tower.
