PALM BEACH — Not far from President Donald Trump’s Mar-a-Lago estate in Palm Beach, cosmetics heir William Lauder is selling the estate of late conservative talk show host Rush Limbaugh for $155 million. Purchased with dollars.
Elsewhere on the island this year, luxury car sales magnate Michael Cantanucci purchased a mansion on North County Road for $170 million. And fashion designer Tommy Hilfiger sold his 6,500-square-foot home on South Ocean Boulevard, built in 1927, for $41.4 million.
So why did a New York state judge decide last Tuesday that Mar-a-Lago’s value ranged from $18 million to $27.6 million?
These figures were revealed based on an evaluation by the Palm Beach County Property Appraiser’s Office, which found that New York State Attorney General Letitia James overvalued assets and overestimated net worth when securing loans and insurance. This came to light after a lawsuit was filed against former President Trump, his Trump Organization, and three of his family members. While building a real estate empire.
The use of these figures by New York State Supreme Court Justice Arthur Engoron was due to real estate professionals who trade in or help manage some of the most expensive properties and mansions on the island, a haven for the rich and famous. It surprised the family. Last Tuesday, a judge concluded that President Trump committed business fraud against banks and insurance companies and ordered the revocation of various New York business licenses.
“For me, $18 million is way off base,” said Billy Nash, founder of Nash Luxury at Illustrated Properties, a division of The Keys.
“At the end of the day, it’s the market that determines the value,” he says. “If that property was on the market for $18 million, 100 people would line up to buy it. And it’s a historic landmark. I would put it in the Henry Flagler property category. think.”
Flagler, a railroad magnate and development pioneer, extended the Florida East Coast Railroad line into South Florida in the early 1900s. Socialite Marjorie Merriweather Post built Mar-a-Lago from 1924 to 1927. The property’s name means “from the sea to the lake” in Spanish, due to its location between the Atlantic Ocean and Lake Worth.It cost him $7 million to build, or about $90 million in modern times. According to Smithsonian Magazine, -day dollar.
The dispute over the valuation is the latest controversy surrounding the property, which was the site of an FBI raid in connection with the U.S. government’s criminal case against President Trump over his alleged illegal possession of classified documents. .
“The market is screaming because it’s clearly wrong,” Nash said of the judge’s ruling. “Real estate professionals are perplexed. How do we come up with this number?” Supply shortages continue on the island. It is a destination that people all over the world aspire to. ”
Mendy Katz, founder of Monarch Estate Services in Greenwich, Conn., which helps owners manage luxury properties in the Northeast, Florida and elsewhere, said the market will determine value. He said demand for housing in Palm Beach remains high.
“It’s clear that supply and demand are driving prices up,” he said. “The assessor determines how much tax will be owed. It has nothing to do with the actual value of the property.”
Ken Johnson, a real estate economist at Florida Atlantic University’s School of Business, said assigning a value to Palm Beach’s big trophy properties is a difficult task.
“If you take away the name and this was another person in Palm Beach, it’s very difficult to assess the value there because these properties are so unique,” he said. “They don’t trade very often.”
earthquake of judgment
Last week, Engoron ordered Trump’s business license revoked, making it difficult for the family group to do business in New York. The ruling eliminates the need for a trial to determine whether President Trump fraudulently received favorable terms on loans and insurance.
In her lawsuit, James claimed that Trump inflated the value of her estate by up to $2.2 billion. She is seeking a $250 million fine.
The trial for the penalty phase of the case is scheduled to begin on Monday.
According to media reports, Florida attorney Christopher M. Kiss, who is representing Trump in the case, said he plans to appeal the decision, saying it is “completely divorced from the facts and applicable law.” Ta.
The former president called the judge “crazy” and called the ruling “un-American.”
“I have a deranged Trump-hating judge who pushed this sham lawsuit through New York courts faster than ever before,” he declared on his Truth Social platform Wednesday.
In reality, Mar-a-Lago “may be worth almost 100 times” the $18 million figure, he said. In testimony last year, he told state prosecutors his estate was worth $1.5 billion, citing a local broker. Trump, who bought the property in 1985, said he never put it up for sale.
The judge concluded that Trump overvalued Mar-a-Lago, inflating its value by as much as 2,300% on certain financial statements.
One real estate expert who suggested it was worth more than $1 billion was Lawrence Moens of Palm Beach, who was called to testify in a defense deposition as an expert witness.
After examining Mogens’ testimony in detail, the judge was negative.
“When asked in the affidavit who the dozen or so (qualified) buyers you mention in your report were, Lawrence Mogens replied: “(He was) from Elon Musk to You can think of everyone up to Bill Gates and everything in between. Kings, emperors, heads of state. But with net worths in the billions.”
“Clearly, this court cannot consider an ‘expert affidavit’ based on an unexplained, unsubstantiated dream,” the judge said.
But Moens is familiar with the Palm Beach market. A city broker for decades, he recently represented the seller in the $170 million sale of a mansion to auto dealer Michael Cantanucci.
Moens did not respond to phone messages left at his office Friday.
It’s about behavior
A spokesperson for the appraiser’s office said the valuation the judge used was based on a deed restriction signed by President Trump in 1995.
A conservation easement prohibits President Trump from using the property as a residence, allowing him to use it only as a social club.
The provisions of this deed have since been further strengthened to prohibit development or use for any purpose other than the club.
However, Ms. James claimed in her lawsuit that President Trump incorrectly valued the resort at between $347 million and $739 million between 2011 and 2021. That figure is “based on the false premise that it is unrestricted land and can be developed for housing,” she said. ”
During the same period, Mar-a-Lago received an evaluation from Palm Beach County for its restricted use as a social club, she noted. The numbers: between $18 million and $27.6 million.
In early 2021, after Trump left the White House, the president of the Palm Beach City Council told the South Florida Sun Sentinel that the former president was free to live in the mansion despite concerns from neighbors who wanted him evicted. He said he could.
Town Council President Margaret Zeidman said the council did not take a formal vote on the legal question of Trump’s residency, but found no violations that would prohibit Trump from living on the 17-acre property. Ta.
Some of Mr. Trump’s neighbors alleged that Mr. Trump violated a 1993 agreement with the town that limited the number of days club members could stay in guest suites on the property.
John Marion, Trump’s attorney in Palm Beach, said at the time that there was no provision barring Trump from living in Mar-a-Lago, and that Trump was a “bona fide employee” of Congress, so he was subject to the town’s zoning rules. He said he could live there based on. club.
His presence there for the past two years does not appear to have affected how the county values the property for tax purposes.
“The deed restrictions impact how we value it,” spokeswoman Becky Robinson said in a phone interview Thursday. “We take an income approach. We look at what the income will be on the property and come up with an appraised value.”
“We are a government agency and we value real estate for tax purposes,” she added. “It’s different than what a private appraiser would do for loan purposes.”
Scammer: How could you do that?
Some questioned how Trump could manipulate institutions that provide loans and insurance in the first place.
“I don’t understand how homeowners can manipulate banks unless they’re on the bank’s board,” said Johnson, a real estate economist at FAU. “Banks also have loan committees, and if there are concerns about a property, they will instruct an appraisal.”
“When a bank lends to a place that is super valuable, they go and find out what the home is worth before making the loan,” he added. They are not going to take the owner’s word for it. ”
said Katz, Real Estate Services Manager. It is very difficult for someone to cheat by playing this game. ”