Former President Donald Trump’s civil business fraud trial turned Tuesday to one of the topics that has vexed him most — the value of his Mar-a-Lago club in Palm Beach, Florida.
Testifying for Trump’s defense, a Florida real estate attorney said the club could be sold as a home, notwithstanding decades-old legal documents in which Trump said he intended to forswear its use as anything but a club. That’s a restriction that is key to New York state lawyers’ claims that the former president fraudulently overhyped the property’s value.
A Palm Beach luxury real estate broker played a glimmering video of the historic estate and testified that he’d value it at over $1 billion as of 2021.
“It’s something breathtaking. It’s something amazing to see,” broker Lawrence Moens said during testimony that took a rare turn when he briefly answered a personal phone call while on the witness stand.
Spanning 17 acres (7 hectares) with waterfront on two sides, the estate and social club is Trump’s home, a place where the former president and current Republican 2024 front-runner has conducted high-profile meetings while in and out of office, and the spot where federal special counsel Jack Smith alleges he improperly stashed classified documents, which Trump denies.
Mar-a-Lago also is a key element of the current New York civil case and Trump’s vehement frustration with it.
State Attorney General Letitia James’ lawsuit claims that the ex-president and his company deceived lenders and others by giving them financial statements that greatly overstated the values of some of his prime assets, including Mar-a-Lago.
Judge Arthur Engoron, in a pretrial ruling declaring that Trump and his company engaged in fraud, found that Trump exaggerated Mar-a-Lago’s worth by as much as 2,300%, compared to the Palm Beach County tax appraiser’s valuations. They ranged from $18 million to $28 million.
Trump denies any wrongdoing, saying that his financial statements actually undervalued his assets and were accompanied by disclaimers that wipe away liability for any mistakes.
His frequent complaints about the case have often spotlighted the claims about Mar-a-Lago. As recently as Friday, Trump vented on his Truth Social platform that the judge “fraudulently reduced the value of Mar-a-Lago.”
The Palm Beach County tax assessment that the judge mentioned was based on Mar-a-Lago’s annual net operating income as a club, not on its resale value as a home or on its reconstruction cost. The operating-income method is the county’s standard way of valuing social clubs, and the outcome carries tax benefits for Trump — a $602,000 property tax bill this year, compared to about approximately $18 million if Mar-a-Lago were assessed at $1 billion.
Moreover, in a 2002 agreement with the National Trust for Historic Preservation, the club and Trump signed over “any and all of their rights to develop the property for any usage other than club usage.”
Yet when pulling information together for Trump’s annual financial statements, his former corporate controller Jeffrey McConney valued Mar-a-Lago club as though the property could be sold as a private home. The statements pegged it as high as $612 million in 2021.
James said that those values ignored the agreement with the National Trust. The attorney general, a Democrat, maintains that Trump should have valued Mar-a-Lago the same way the county does, based on its club income.
But Trump, in his own testimony last month, said that he believes he retains the right to re-designate the property as a home. And Miami-based real estate attorney John Shubin testified Tuesday that “there is absolutely no prohibition on the use of Mar-a-Lago as a single-family residence.”
He noted that the property is simultaneously a club and Trump’s residence. Shubin also noted that a 1993 agreement between Trump and the town of Palm Beach said that Mar-a-Lago was to be used as a private social club but would revert to private residential use if the club were “abandoned.”
Trump’s lawyers argue that that means there was no problem with valuing the property the way that his financial statements did: as if it could be sold as an individual residence.
“Anybody who buys it … would just step into the shoes of President Trump,” defense attorney Christopher Kise said.
Some Palm Beach luxury real estate agents have told The Associated Press that the property would sell for $300 million to $600 million, and possibly $1 billion or more if it sparked a bidding war among uber-wealthy contenders.