Written by Roger
Showley
Dec. 9, 2011
Five years after a high-pressure sales campaign
kicked off, the 526-unit, three tower Trump Ocean Resort remains unbuilt and
the 18.5-acre site is now on the market for $7.5 million.
Instead of 26-story penthouse suites overlooking
the Pacific Ocean at Punta Bandera, 10 miles south of Tijuana, a senior housing project makes more
sense, says Rob Hixson, the CB Richard Ellis broker representing the lender who
took back the property.
"It would not be as vertical as what they were
planning on," said Hixson.
Such a project might take up no more than 8 acres
and leave room for a nursing care facility, nursing school and other medical
facilities that might appeal to retirees, both above and below the border, he
said.
On the market for four months, the site has drawn
one bid from a well-known Tijuana
developer, whom Hixson declined to identify. He said he hopes a sale can be
completed in the first half of 2012.
The project originally offered units ranging from
$274,000 to nearly $3 million on floor plans of 485 to 2,685 square feet.
A high-pressure sales campaign culminated in a
December 2006 reception at the Manchester Grand Hyatt hotel in downtown San Diego, where buyers
were encouraged to turn $5,000 reservations into 10 percent deposits.
"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," the Union-Tribune
reported in a Dec. 9, 2006, story.
On that one day, buyers made deposits on of 188
units worth $122 million. A few months later, Trump's daughter Ivanka gave a
speech in San Diego
and said she had bought a unit herself. The project at build out was projected
to be valued at nearly $220 million.
But by 2008, the developer, Los Angeles-based
Irongate, had lost its financing. Trump, who had originally indicated he would
be a major investor, withdrew from a licensing agreement to use his name.
And buyers sued Trump and others for fraud and
demanded their $32.2 million in deposits back.
The lender, MKA Capital Group Advisors of Newport
Beach, had lent $14 million for site acquisition to Irongate, said MKA
President George Baker.
"When the great real estate recession hit, the
developers' bank, a large Germany bank, pulled out of the fianncing and left
them holding the bag," Baker said. "We proposed to take back the
project."
He said besides the industrialist, interest in the
property has come from several U.S.
hospital groups and Mexican resort developers. Any new development potentially
could be valued at up to $100 million.
Hixson said the timing may be right for getting the
property developed now.
"I think we're at a bottom right now," he
said. "I think Mexico
is starting to get better."
In the prospectus, Hixson said potential
developers, besides a senior retirement, might include high-rise condos, a
"family compound," a company "retreat or education
facility" and a hospital for "medical tourism."
roger.showley@uniontrib.com; (619)
293-1286; Twitter: rmshowley; Facebook: SDUTshowley
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