Sleepy NY Estate Claimed Value Could Come To Haunt Trump – NBC New York
It’s asleep by Donald Trump’s standards, but the former president’s century-old estate in Westchester County could end up being one of his biggest legal nightmares.
Seven Springs, a 213-acre expanse of nature surrounding a Georgian-style mansion, is the subject of two state investigations: a criminal investigation by Manhattan District Attorney Cyrus Vance Jr. and a civil investigation by the New York Attorney General Letitia James.
Both inquiries focus on whether Trump manipulated the value of the property to reap more tax benefits from an environmental conservation deal he struck in late 2015, while he was running for the bid. presidency.
Bought by Trump in 1995 for $ 7.5 million, Seven Springs came under scrutiny as he prepared to step down and was on the verge of losing the legal protections he had in place. as president. Vance issued new subpoenas in mid-December and a judge ordered that the evidence be turned over to James’ office nine days after Trump left Washington.
Other Trump legal issues, such as investigations into his attempts to influence election officials and payments made on his behalf to women alleging affairs, grabbed the headlines. But former Manhattan District Attorney Duncan Levin said white-collar investigators are going where the paper trail leads.
“While a tax issue related to a custody deal may not be as sexy as a secret cash payment, prosecutors are likely to focus on any violation of the law they find,” Levin said. “Remember, the authorities charged Al Capone with tax evasion.”
Seven Springs is an outlier in a Trump real estate portfolio filled with shiny skyscrapers and gold-plated amenities. It is listed on its website as a family retreat, although Trump has not been there for over four years.
At the heart of the estate is the mansion built as a summer getaway in 1919 by Eugene Meyer, who later became chairman of the Federal Reserve and owner of the Washington Post. In 2006, while pushing a project to build luxury homes on the property, Trump pitched the idea that he and his family would move into the mansion, but that never happened.
The brand new 28,322 square foot home had more than a dozen rooms, an indoor pool, bowling alley and tennis court. Meyer’s daughter, the late Katharine Graham, editor of the Washington Post, married in Seven Springs in 1940.
In his memoir “Personal History”, Graham described mixed emotions about going there, writing: “The older I got, the more I didn’t like the loneliness of the farm, but in my childhood it was, as I wrote my dad when I was 10, ‘a great old place.’ ”
At one point, Meyer owned around 700 acres. A philanthropic foundation created by him and his wife, Agnes, donated 247 acres to the Nature Conservancy and the remaining land and buildings that made up Seven Springs at Yale University in 1973, after the death of Agnes Meyer.
The estate changed hands again when the foundation took it over from Yale and operated a conference center there before handing over the real estate to Rockefeller University, who ultimately sold it to Trump.
Trump paid around $ 2.25 million below the list price of Seven Springs, acquiring the land as part of an effort to revive his fortunes after a string of failures in the early 1990s, including casino bankruptcies and the sale of its money-losing airline Trump Shuttle.
Trump was planning to turn it into his first championship-caliber golf course, with an exclusive clientele and steep membership fees.
He hired an architectural firm to lay out the fairways and greens, but abandoned the effort when residents expressed concern that lawn chemicals would contaminate nearby Lake Byram, a local source of drinking water.
Trump then tried to build houses. He proposed to build 46 single-family homes, and after that plan also encountered opposition from the community, 15 mansion-sized homes that he described in 2004 as “very high-end residential, as we don’t know. ‘ve never seen it on the east coast. . “The project was delayed by years of litigation and no houses were ever built.
In 2009, Trump caused a stir by allowing Libyan dictator Muammar Gaddafi to pitch his Bedouin-style tent on the Seven Springs estate in upstate New York because he had no other place to stay for a visit to the UN.
Trump initially suggested he was unaware that Gaddafi was involved, but later conceded that he was “making a lot of money” by leasing the land from the Libyan leader. Local authorities halted work on the tent and Gaddafi never stayed there.
With his development plans dashed, Trump opted for a strategy that would allow him to keep the property but reduce his taxes. He granted an easement to a conservation land trust to preserve 158 acres of prairie and mature forest.
Trump received an income tax deduction of $ 21 million, equal to the value of the land retained, according to property and court records. The amount was based on a professional appraisal which valued the entire Seven Springs property at $ 56.5 million as of December 1, 2015.
This was a much higher amount than the assessment by local government appraisers, who said the entire estate was worth $ 20 million.
Michael Colangelo, an attorney with the New York attorney general’s office, laid out the central issue regarding the Seven Springs easement during a hearing last year over an evidence dispute.
“If the value of the easement was unduly inflated, who got the benefit of this undue inflation and for what amounts? said Colangelo. “It goes without saying that the Attorney General needs to see the records that would reflect the value of this deduction, as passed to the flow-through entities, and ultimately to Mr. Trump, personally. “
A message requesting comment was left for Trump’s spokesperson. In the past, the former Republican president denounced the investigations as part of a “witch hunt”.
Seven Springs came to the attention of investigators after Trump’s longtime personal lawyer and fixer Michael Cohen told a congressional committee in 2019 that Trump used to manipulate property values - into them. inflating in some cases and minimizing them in others to obtain favorable loan terms and tax advantages.
Cohen said Trump had financial statements showing Seven Springs was worth $ 291 million in 2012. He gave copies of three of Trump’s financial statements to the House Committee on Oversight and Reform during his testimony.
Cohen said the statements, from 2011, 2012 and 2013, were ones Trump gave to his main lender, Deutsche Bank, to inquire about a loan to buy the NFL Buffalo Bills and to Forbes magazine for justify his claim to a place on his list of the richest people in the world.
Trump, on his annual financial disclosure forms while he was president, said the property was worth between $ 25 million and $ 50 million.
The New York attorney general was the first to act. James issued subpoenas to commercial real estate services firm Cushman & Wakefield for files relating to his appraisal work on behalf of Trump; the law firms that worked on the Seven Springs project; and to Trump’s company, the Trump Organization, for documents relating to its annual financial statements and the conservation easement.
James also subpoenaed the 2019 zoning and planning records of the three cities that Seven Springs covers. Vance followed up with his own subpoenas in December. A city clerk said investigators received “boxes and boxes of documents” in response. They included tax returns, survey maps, environmental studies, and planning board meeting minutes.
James’ investigators interviewed Trump’s son Eric Trump, executive vice president of the Trump Organization and chairman of the limited liability company through which Seven Springs owns; Trump’s CFO Allen Weisselberg; and the lawyers Trump hired for the Seven Springs Project, specializing in land use controversies and federal taxation.
Investigators have yet to determine whether a law has been broken.
Vance, who like James is a Democrat, hasn’t revealed much about his criminal investigation, in part because of grand jury secrecy rules. The district attorney’s office said in court documents it was focusing on public reports of “widespread and prolonged criminal conduct in the Trump Organization.”
Documents filed as part of the criminal investigation – backed by a U.S. Supreme Court ruling last month granting Vance access to Trump’s tax records – listed Seven Springs as possible targets.
Along with the mansion, Seven Springs owns a Tudor-style home that once belonged to ketchup mogul HJ Heinz, and smaller carriage houses that Trump’s grown sons Donald Jr. and Eric say served as a “home base”. ‘attache’ when they visited the area for hiking and mountain biking.
During his presidency, Trump himself has opted for top properties like his golf course in Bedminster, New Jersey and his Mar-a-Lago club in Florida, where he has lived since leaving. the White House.
The New York Times reported last year that Trump’s tax records showed he had classified the estate not as a personal residence but as an investment property, allowing him to write off more than $ 2 million in taxes. land since 2014.