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Trump land deal nightmare, GOP voters warned ‘buyer beware’

NEW YORK DAILY NEWS

Sunday, March 6, 2016, 4:00 AM

In December 2006 Linda Drake (l.) and her husband Stephen (r.) decided to make a $  240,000 down payment on an $  800,000 19th-floor oceanfront condo in the yet-to-be-built Trump Ocean Resort Baja.Courtesy Linda Drake

In December 2006 Linda Drake (l.) and her husband Stephen (r.) decided to make a $ 240,000 down payment on an $ 800,000 19th-floor oceanfront condo in the yet-to-be-built Trump Ocean Resort Baja.

Linda Drake saw the commercials, read the brochures and knew of the real estate mogul’s purportedly sterling reputation.

So when she and her husband Stephen Drake made a $ 240,000 down payment on a condominium in 2006 in the yet-to-be-built Trump Ocean Resort Baja — a mammoth luxury building set to be constructed on a beautiful stretch of land in Mexico, just hours south of San Diego — they didn’t hesitate.

The complex was never built, the money was never returned.

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Eight years later, all they have left to show for their trust in bloviating billionaire Donald Trump — who had promised so much and delivered nothing at all — was a bruising legal battle and a settlement.

Their epic struggle with the mogul, and his army of lawyers, proved to be a lesson in how not to be taken for a ride by Trump — one which they now hope they can somehow purvey to the hordes of followers of the businessman’s white-hot presidential campaign built on farfetched promises; one that can be reduced to two simple words: Buyer Beware.

“And it wasn’t just Trump, it was his whole family,” who committed wrongdoing, Drake added, pointing out the comments touting the anticipated complex by Ivanka Trump (r.).Jamie McCarthy/Getty Images

“And it wasn’t just Trump, it was his whole family,” who committed wrongdoing, Drake added, pointing out the comments touting the anticipated complex by Ivanka Trump (r.).

“I have so much distrust for him and the games I felt he played with us,” Drake, an industrial psychologist who still lives in Southern California, told the Daily News. “I can’t stand the sight of him.”

Drake and her husband learned the hard way not to believe anything anyone with the last name Trump promises, prompting her to now passionately push his supporters to reconsider their allegiance.

“Would I vote for him? Absolutely not,” Drake, who hasn’t committed to a candidate yet.

“And to anyone who likes him,” or anything he is promising, “all I can say is buyer beware.”

In December 2006, after following up with an ad about a Trump-licensed development in Baja California, Drake and her husband decided to make a $ 240,000 down payment on an $ 800,000 19th-floor oceanfront condo in the yet-to-be-built Trump Ocean Resort Baja.

“We were impressed with what we knew of the plans,” she told The News, explaining that they had no reason to be worried at the time about purchasing a vacation getaway spot just hours away from their regular home in southern California. “And we thought Trump had a good track record. He was a real estate developer and what we know at the time was that he had an outstanding name.”

And it wasn’t just Trump’s word they took. His daughter Ivanka also promoted the development, saying in July 2007 interviews that she, too, was “blown away by” the site.

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“We thought it was going to be great,” Drake said, nodding to her since lost trust in the Trump clan.

Dozens of others felt the same about the complex, which was to be developed by Irongate Capital Partners. Trump licensed the company to use his name on the development, a practice the mogul has done frequently — with notably mixed results.

Donald Trump’s lawyers had argued that the suit should have been tossed, claiming that the statute of limitations on the case had expired.Charles Rex Arbogast/AP

Donald Trump’s lawyers had argued that the suit should have been tossed, claiming that the statute of limitations on the case had expired.

Nearly 200 units in the planned building were quickly sold for $ 122 million.

But after months of deafening silence, followed by the receipt of a few letters that suggested things were fine, the Drakes learned in late 2008 that the project had collapsed amid the growing housing crisis, leaving them, and at least 100 other investors, without their deposits — an amount totaling nearly $ 23 million.

“We waited and we waited,” she explained. “And what ended up happening was that the project failed.”

The property was foreclosed on before construction had even begun.

“And we heard about it from a letter that looked like someone had taken it off a typewriter. I didn’t even recognize the person’s name who wrote it.”

The letter, she said, was from PB Impulsores, a Mexican co-developer of the project.

Drake was devastated and joined a suit in 2009 with other investors to get her money back.

“To have that kind of money go out the door, we were just shocked,” she said. “We had believed in this man and he failed us.”

“And it wasn’t just Trump, it was his whole family,” who committed wrongdoing, Drake added, pointing out the comments touting the anticipated complex by Ivanka.

In 2012, Irongate Capital Partners, one of the co-developers, reached a $ 7.25 million settlement in the case.

And a year later, after a four-year legal battle, Drake and other investors reached a settlement with Trump. The terms are confidential, but Drake’s attorney said that “the plaintiffs were very happy with the resolution.”

The sour situation, nevertheless, forever ruined Trump’s image for Drake and created within her an intense skepticism of the mogul, a feeling she’s held throughout the developer’s meteoric rise to the top of the GOP field — even before he started spewing bigotry.

“And now it’s even scarier,” she said. “It’s a very scary deal to (see him) make the statement he is making and see people following him the way they do.”

“But it doesn’t seem like anything anyone says about him makes a difference,” she said.

The Trump campaign did not respond to multiple requests for comment.

A spokesman for the Trump Organization pointed out that investors in the project, as well as the project’s developers themselves, should have all understood the risks incurred in a real estate project when they signed their contracts.

“If you’re buying real estate, especially pre-construction, you have got to understand the risks and be capable of bearing the losses,” Trump Organization General Counsel Alan Garten told The News. “You always want every project to go perfectly but that doesn’t always happen.”

“It fell victim to the worst financial crisis and real estate crisis we have seen since the Great Depression,” Garten said, rejecting that the project’s failure in any way reflected Trump’s business acumen. “I certainly understand buyers who lost their deposits, but I think you’re talking about a once in a lifetime event.”

Garten also pointed out that Trump had simply licensed his name to the construction companies who actually developed the project.

The fiasco surrounding Trump Ocean Resort Baja, however, was just one of many relating to failed business ventures bearing the Trump name.

There was Trump Mortgage, a failed company that lasted less than two years, Trump Magazine, which also folded after two years, Trump Entertainment Resorts Inc., which went through four between 1991 and 2014, Trump Vodka, Trump Airlines, Trump Steaks and Trump Airlines.

And then, of course, there was also Trump University, a for-profit school that promised business lessons but ending up swindling some students of up to $ 35,000.

Several students sued the school in 2010, leading Trump to change its name to the “Trump Entrepreneur Initiative.” He later closed it, and in 2013, New York Attorney General Eric Schneiderman sued Trump and the shuttered school for $ 40 million for misleading over 5,000 students, including 600 New Yorkers.

So far, many of those students haven’t seen a penny — a fact Drake can empathize with.

“When I saw all the articles about the University, about how all those people lost their money, I just knew it was my duty to speak up again,” she said, before offering her support directly to the countless numbers of fellow Trump victims.

“We are there with you,” she said. “At least we were able to get some sort of settlement. They weren’t and they just lost all their money.”

Last month, a state appeal said the civil fraud claim against the GOP front-runner and his Trump University could proceed.

Trump’s lawyers had argued that the suit should have been tossed, claiming that the statute of limitations on the case had expired.


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