No. of Recommendations: 5
The near- billion dollar assessment of Mar-a-lago in large part assumes what it COULD be worth if parceled out into individual lots and converted into single family mansions. Of course, it CANNOT be parceled out like that because the zoning of the existing plot prohibits that in perpetuity. That seems to be one of the factors that aggravated the judge so much because that very issue seems to have come up before. I hate to say it, but I agree with Team Donald here. If I had $100 million, and they offered to sell me Mar-A-Lago for $100 million, I'd do that every day of the week and twice on Sundays. Because I know I could flip it the next day for well north of $200 million. Or develop it myself - it would be child's play to carve out
at least four 2-acre waterfront homesites, sell them for $40-50 million each, and sell the mansion on the remaining 10 acres for twice that. I mean, for g-d's sake the house right next door is only on 3/4 of an acre,
isn't waterfront, and is worth $25 million or so:
https://www.redfin.com/FL/Palm-Beach/160-Woodbridg...https://www.zillow.com/homedetails/160-Woodbridge-..."But Albaby," I hear you say, "what about the permanent and forever covenant that says it always has to be a private club?" No problem. Those covenants don't have to last forever. They almost never do. Because like most such instruments, the covenant says that it can always be released if the Town of Palm Beach agrees to release it. I've worked on more than a dozen projects (frequently on now-defunct golf courses) that are subject to similar restrictions, and local governments are usually willing to consider releasing them in favor of
reasonable redevelopment.
https://www.politico.com/f/?id=0000015a-99cf-dcd4-...So then - I come in with a development group that includes a politically connected
Democratic lobbyist team, and pitch to the Town that they can get Donald Trump out of Palm Beach, commit to returning the main house back to a private residence (not a hotel, which is one of the main things they were really trying to prevent with the covenant), not 20 small-lot (for Palm Beach) single family homes (the other thing they were trying to prevent)? To have a half dozen $50 million plus homes, rather than the PITA that is Mar-A-Lago as a club rather than a residence? Yeah, that's kind of a no brainer.
But why the huge difference between the Property Appraiser value and the price it would yield on the open market? Because even though there is a
very real value to the contingency that the covenant will be released, the PA's rules on valuation don't allow them to consider it. Or to use nearby sales of vacant land for estate residences as comps. The PA is required to calculate value based on likely cash-flow analysis from the operation of the private club.
I think the judge is just flat out wrong on this one.
