November 21, 2016
PUNE, India — It is a daunting proposition to put $2 million apartments on the market in Pune — a quiet industrial city in the west of India, where even the fanciest neighborhoods are lined with squat housing blocks.
Asia,
Donald J. Trump at a news conference in 2014 to announce his first project in Mumbai.
November 21, 2016
PUNE, India — It is a daunting proposition to put $2 million apartments on the market in Pune — a quiet industrial city in the west of India, where even the fanciest neighborhoods are lined with squat housing blocks.
Asia,
Donald J. Trump at a news conference in 2014 to announce his first project in Mumbai.
But the developers of Trump Towers Pune, an elegant pair of 23-story black-glass pillars, have an extraordinary new marketing tool they are moving quickly to exploit: the president-elect of the United States.
Since Donald J. Trump won the presidency, they have celebrated the growth that Mr. Trump’s win could bring to their brand, even flying to New York last week to meet with the president-elect and his family as he was assembling his cabinet.
“We will see a tremendous jump in valuation in terms of the second tower,” said Pranav R. Bhakta, a consultant who helped Mr. Trump’s organization make inroads into the Indian market five years ago. “To say, ‘I have a Trump flat or residence’ — it’s president-elect branded. It’s that recall value. If they didn’t know Trump before, they definitely know him now.”
In just under nine weeks, Mr. Trump will take control of a portfolio of public business between the United States and India, the world’s two largest democracies, supervising debates over issues including climate change, maritime shadowboxing with China and the nuclear standoff with Pakistan.
The meeting shows that Mr. Trump has not fully disengaged from his business ventures even as he leads his presidential transition, and it highlights the potential conflicts he will face going forward if he does not separate himself from a brand that has been constructed around his persona.
In a telephone interview, Atul Chordia, one of the developers who met last week with Mr. Trump, played down the appointment as a “two-minute” congratulatory conversation in which no business was transacted and no new projects were discussed.
But newspapers in India reported it as a business meeting, illustrated with a photograph of the beaming real estate executives — Atul Chordia, Sagar Chordia and Kalpesh Mehta — flanking the future president, and indicated that the builders and Mr. Trump’s organization are planning further collaborative real estate projects.
Sagar Chordia confirmed to The New York Times on Saturday that this account of the meeting in New York — which included discussions with the Trump family about possible additional real estate deals — was accurate. A spokeswoman for the Trump Organization did not dispute this account — saying only that the encounter with Mr. Trump himself was brief.
“We have identified a piece of land and spoken to them,” Sagar Chordia told The Business Standard, a daily newspaper in India. Sagar Chordia, who posted photos of himself wearing a “Make America Great Again” hat on social media during the presidential campaign, did not respond to repeated requests for comment from The Times.
Three prominent ethics lawyers said in interviews on Sunday that the interaction between Mr. Trump and his business partners from India does not appear to violate federal laws or ethics rules, nor would it even if he had already been sworn in. This is in part because the president, unlike members of Congress and most other federal employees, is exempt from such requirements.
But each lawyer agreed the activities created the appearance that Mr. Trump and his business partners are using his status as a way to profit.
“It is unprecedented in modern history,” said Andrew D. Herman, a lawyer who has represented more than a dozen members of Congress in ethics cases. “But this is the new normal.”
Robert S. Stern, a lawyer who helped write California’s ethics law and the former president of the nonprofit Center for Governmental Studies, said that anytime Mr. Trump has a meeting with a foreign government leader where one of his projects is based — a list that includes Turkey, the United Arab Emirates, Britain, Canada, Panama, Dubai, the Philippines, South Korea and Uruguay — questions may arise as to whether he took any action that might benefit his investments.
“It already looks like he is using his position as president-elect to promote something in India that would benefit him financially,” Mr. Stern said. “It is not presidential — or at least presidential before him.”
Hope Hicks, a spokeswoman for Mr. Trump’s transition team, declined on Sunday to comment.
A spokeswoman from the Trump Organization declined to address questions about the appropriateness of Mr. Trump meeting with his business partners, and instead pointed to a statement the organization made last week about shifting control of Mr. Trump’s business operations to his children.
“This is a top priority at the organization, and the structure that is ultimately selected will comply with all applicable rules and regulations,” said Amanda Miller, the vice president of marketing at the Trump Organization.
The Pune towers are the first Trump-branded project to be completed in India, to be followed in the next few years by a 75-story skyscraper in Mumbai.
Mr. Trump’s five current projects in India are worth around $1.5 billion, making it Mr. Trump’s most active development market outside North America, Mr. Mehta, the managing director at Tribeca Developers and the Trump Organization’s representative in India, told The Indian Express last week.
In most cases, Mr. Trump does not invest in the projects, but instead allows the developers to use his name in return for an undisclosed sum in royalties, according to industry analysts. Though each agreement is structured differently, in many cases the brand receives a percentage of sales, meaning Mr. Trump stands to benefit directly from increased revenues.
Publicity materials focus heavily on Mr. Trump and his family. One pitch promises that “the experience of owning a Trump-branded property and living the Trump lifestyle is unparalleled.” Customers requesting information about the units receive an email illustrated with a large photograph of Ivanka Trump, Mr. Trump’s elder daughter, seated thoughtfully before a window.
The Trump name, Sagar Chordia told The Business Standard, is so valuable that apartments in the towers sell for 35 percent more than comparable apartments in other developments. Similar projects have been undertaken by Armani, the Four Seasons and the Ritz Carlton, said Ramesh Nair, the international director at Jones Lang LaSalle Property Consultants, a global real estate company.
“It’s a branding project,” Mr. Nair said. “There is no skin in the game. You are lending your name. You give some specifications for the project. And you will generate some free publicity.”
But sharing your brand name with Indian developers could backfire. Over the past decade, many unscrupulous developers here allowed projects to stall midway for lack of ready capital and used home buyers’ deposits to begin work on the next project, leaving families stripped of their savings to protest helplessly.
Mr. Nair said Mr. Trump so far had partnered with well-regarded firms, but warned that a poor choice could damage not only Mr. Trump’s reputation, but that of the United States, given the corruption typical of Indian land deals.
“If that small university can get him into trouble, you can imagine what could happen with India’s ‘squeaky-clean’ real estate sector,” Mr. Nair said, referring to the fraud lawsuit against Trump University, which Mr. Trump settled last week for $25 million. “Tomorrow they could have 100 buyers standing outside the U.S. Consulate, saying, ‘Give me back my money.’”
Industry observers differed on whether Mr. Trump’s brand image would help increase real estate sales. India’s luxury housing market has been weak for years, and has been further damaged by a new government drive to stamp out untaxed cash transactions.
So far, some boldface names have reportedly purchased units at the Trump Towers Pune, including the Bollywood actors Rishi Kapoor and Ranbir Kapoor.
The Chordia family, which has close ties to Sharad Pawar, the chief of India’s Nationalist Congress Party, is particularly enthusiastic in its embrace of Mr. Trump. Mr. Trump has made targeted appeals to Indian-Americans for financial support, holding a major fund-raising event in October in Edison, N.J., a city with a large number of Indian residents, where Mr. Trump called himself a “a big fan of Hindu.”
On the morning of the election, Sagar Chordia described giving a party for 800 people in honor of Mr. Trump’s first visit there, in 2014. Vijayta Lalwani, a local journalist who interviewed Sagar Chordia as the final results came in, described him as “ecstatic.”
Mr. Bhakta, the former consultant to Trump’s development group, said he was confident that more collaborations were forthcoming. He said Mr. Trump’s son Donald Trump Jr. has typically taken the lead on advancing deals in India, but that the president-elect also spends ample time with Indian partners.
“Every time I have been there with clients from India, we always have a heart-to-heart with Senior,” he said. “He is very much passionate about the India story.”
Many in Pune said they believed demand for the apartments would rise. Mohan Devasi, 21, a laborer, said he had been impressed by Mr. Trump when he “caught a glimpse of him” in Pune in 2014. He had heard Mr. Trump was a “a close friend of Narendra Modi” and that he had promised to take a hard line on Muslims.
“He is right now the American president, which means he is the most powerful person in the world,” said Partha Sikder, 25. “He’ll have that liberty. People will obviously want the apartments more.”
Mr. Trump’s real estate partners are also taking steps to keep the focus on the president-elect. Sagar Chordia told reporters from The Indian Express that he is planning to attend Mr. Trump’s inauguration in January.
Courtesy: NY Times
