Business

Failed Trump hotel leaves investors livid

SAN DIEGO — Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump.

The Southern California couple paid a $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.

But admiration for the celebrity developer and star of The Apprentice has turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors without deposits, which totaled $32.2 million.

"I can't even stand to see Trump's face on TV," said Linda Drake, a psychologist, whose husband is a commercial airline pilot and financial adviser.

Investors were told last month their money was spent and they won't get a penny back. A single mother in suburban Los Angeles lost $200,000 and won't be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units.

The project's collapse comes at a delicate time for Trump, whose casino company, Trump Entertainment Resorts Inc., filed for bankruptcy protection last month. He also is embroiled in a lawsuit to avoid paying debt on the struggling Trump International Hotel & Tower in Chicago.

Trump and his children heavily promoted the Baja resort. He sold 188 units for $122 million the first day they went on sale.

The Trump Organization teamed up with Los Angeles developer Irongate Capital Partners LLC, the partnership behind Trump International Hotel & Tower Waikiki in Honolulu.

In response to a request to interview Donald and Ivanka Trump, the Trump Organization issued a statement that said its partner violated an agreement to license the Trump name, missing deadlines to obtain financing and begin construction.

Timothy Hughes, an attorney for Irongate, said the project "will not be going forward" but declined to answer questions.

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