Trump jumps in to help tower
With financing on the Tampa project lagging, the magnate's head office decides to get involved to make sure the skyscraper gets built.
By JAMES THORNER
Published August 31, 2006
TAMPA - Frustrated by the failure of local developers to land financing for Trump Tower Tampa, the Trump Organization said it will take the lead in finding lenders for the proposed luxury condominium high-rise.
"We're taking a more active role in the financing side of things. Hopefully we can see what we can do," Donald Trump Jr. told the St. Petersburg Times Wednesday in a telephone interview from New York City.
"Everything about the project has been a total success. It would be a shame not to get it built."
At 52 stories, Trump Tower would be the highest skyscraper in west Florida. But the Tampa riverfront project has struggled to find a $200-million loan in the current housing downturn. Developer SimDag LLC is delinquent in paying a former contractor and is almost certain to postpone the tower's scheduled late 2008 grand opening.
Trump is the 28-year-old son of New York real estate tycoon and casino owner Donald Trump. Speaking for his father, Trump Jr. said his company has left most business decisions to SimDag, a Tampa company that persuaded Trump to lend his name to the tower in exchange for a licensing fee.
But the $260-million, 600-foot project was sideswiped by rising construction costs, including huge jumps in the price of concrete and steel. Last week SimDag told city inspectors that soil instability on the 1.5-acre site at Ashley Drive and Brorein Street is bloating its budget for steel and concrete pilings.
SimDag's New York partner decided to intervene, Trump Jr. said, and is "collecting all financial data" from SimDag to salvage the project.
"We've been hit very hard from the cost side of things," Trump said. "The brand is good, but it's the cost side."
SimDag spokesman David Hooks couldn't confirm the change in how the partnership functions. Attempts Wednesday to reach SimDag chief executive Frank Dagostino were unsuccessful.
Trump expressed frustration that the other Trump-branded residential towers in cities such as Chicago and Las Vegas were thriving while Tampa's appeared mired in the mud.
He noted that SimDag had sold out a majority of the tower's 192 condos, ranging in price from $700,000 to $6.2-million.
"From a sales perspective, it's probably set every record in Tampa," Trump said.
But lenders have remained skeptical. Roughly 10,000 unsold condos clog Tampa Bay area real estate listings. Many were scooped up by investors who are struggling to find buyers in the relatively tepid housing market. Few of those units, however, approach the price and luxury touted by Trump.
Trump Tower Tampa was hatched in 2004, though it wasn't until Feburary 2005 that Donald Trump Sr. whooshed into town in a limousine to kick off sales.
A year later the tower had yet to begin rising, and SimDag had hit up depositors for an extra $40-million to cover cost overruns.
The tower formally broke ground in March of this year, a ceremony at which Trump Sr. was absent. Two weeks later, Turner Construction Co., the lead contractor, left the project and in June slapped a lien on SimDag to recover $1.6-million it says it's owed.
According to Trump Jr., the scheduled late 2008 completion date is probably unworkable. He floated a potential move-in date of early 2009, provided Trump Tower starts going vertical in the next several months.
"There's no reason we can't build it in two years," he said.
Trump suggested his company, with its billions of dollars in assets, might have better luck approaching banks and lenders. But he made no promises of success.
"If it can be done, it will be done," Trump Jr. said.
At what point would the Trump Organization consider backing out of the project?
"We don't like to think that way," he said.
James Thorner can be reached at email@example.com or 813 226-3313.
[Last modified August 31, 2006, 05:30:15]
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