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Folks jump on Trump's condo bandwagon

 
UNION-TRIBUNE STAFF WRITERS

December 9, 2006

Frank Christopher arrived at the Manchester Grand Hyatt yesterday with his wife, Susan, intending to buy a million-dollar condo-hotel unit from Donald Trump.


DENIS POROY / Associated Press
Prospective buyers Ramon Tumanan (far right) and Ed Solver looked over a model of the first phase of the Trump Ocean Resort Baja California.
The semiretired custom-home developer from La Quinta and Jackson, Wyo., left with two, costing about $2 million and totaling 3,800 square feet.

“One's for speculation,” said Christopher, 55.

If the real estate market is cool in San Diego and throughout the nation, it was red-hot at the downtown hotel, where an estimated $120 million in sales was toted up at Trump's latest project, Trump Ocean Resort Baja California, a three-tower, 570-unit development north of Rosarito.

After several weeks of taking more than 600 reservations, Trump and his partners gave buyers a time to report at the Hyatt and pick which units they wanted in the project's first phase, the 232-unit middle tower. About 80 percent were expected to be spoken for, though buyers will have seven days to back out of the deal if they get cold feet.

Each reservation entitled its holder to buy two units, but a spokesman said the contract specifies that they cannot resell their units until escrow closes in about 18 months.

The Douglas Ballroom had been converted into a combination beach scene and high-pressure showroom, where dozens of nattily dressed sales agents answered questions, gathered signatures on key legal documents and pointed the way to free food and drink.

Some buyers acted through on-site agents who, with cell phones in hand, signed sales contracts and handed over cashier's checks for 10 percent down, on prices ranging from $274,000 for 485 square feet to nearly $3 million for the largest of six penthouses, at 2,685 square feet.

A large digital screen showed the pace of sales. Every time a unit was selected, its corresponding number on the screen went blank, a bell went off and bystanders clapped and cheered.

By the time construction is completed on the entire oceanfront complex in 2009, buyers will have paid 30 percent as a down payment and lined up financing, if needed, to cover the rest of the price. Two mortgage companies were on hand to discuss financing options.

Sales on the two other towers are expected to take place in mid-2007. Those who could not secure their desired unit yesterday are eligible for first dibs next time.

David Shaw, 49; his sister, Kathy Kampman, 56; and their cousin, Tricia Olsen, 54, drove in from Orange and Riverside counties to buy a one-bedroom unit on the ninth floor for $530,000, which they plan to share among their families.

Olsen said she figured their combined monthly mortgage payment will be about $3,500 but that it can be reduced to $500 each if they succeed in renting out the unit 30 percent of the time. That is allowed under a management agreement they intend to sign later.

But amid the frenzy, some buyers expressed reservations about the project. Christopher said he wanted to find out about the building's seismic safety. Kampman said she wanted assurances that potable water would be available and dependably safe.

Ocean-pollution worries brought a small protest from the Imperial Beach-based environmental group Wildcoast. Members of the group stood outside the hotel holding a banner and expressed concern that the high-rise condo development boom south of the border would overburden sewage-treatment plants.

“We want Donald Trump to sit down with us and the government of Mexico to solve this problem,” Wildcoast executive director Serge Dedina said.

Jason Grosfeld, a co-founder of Irongate, Trump's Los Angeles-based partner on the project, said an on-site sewage plant and desalination facility were planned.

“We're absolutely taking the environment seriously,” Grosfeld said. “We're doing all the right things.”

San Diego real estate consultant Gary London, who represents another Baja California developer, was on hand watching the sales process. He raised concerns over the availability of health care, support services and convenient access from San Diego.

“We need to resolve the border-crossing problem,” London said.

Ivanka Trump, the real estate mogul's 25-year-old daughter, said in a phone interview from Palm Beach, Fla., that she bought one of the units at the Baja California resort herself and was not worried about crossing the border.

“We have to be realistic – these things exist – but I don't see them as being a detriment,” said Trump, an executive vice president for real estate development and acquisitions for her father's organization.

“Ultimately, (buyers) are able to get an incredible deal relative to San Diego, within a 30-minute drive, for people basically priced out of the (coastal) market.”

“The Donald” added his star power to the project only in September, joining Irongate after plans for the towers were under way. Several buyers said his involvement reassured them that the sales promises would be fulfilled. His daughter said it's possible that a future winner of Trump's “The Apprentice” TV show could be offered a job helping develop the project.

Marc Penso, 46, an Irvine real estate attorney, was blunter than most in expressing his motivation.

“Everyone here is buying for speculation; there's no one moving here on a permanent basis,” Penso said, adding that he owns similar units in Aspen, Colo., and Mammoth and is buying one at The Residences coastal condo-hotel in Tijuana.

“It's an interesting marketplace,” he said, “because you have prices that are 40 to 60 percent lower than in California with an ocean view.”


Published Monday, December 11, 2006 12:54 PM by Kanoa Biondolillo

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