By Brian J Pape, AIA

From almost every vantage point in the West Village, the 46-story former Trump Soho Hotel (now, the Dominick) tower at 246 Spring Street looms over the other buildings like a sore thumb. Like Boston’s Hancock Building on Copley Square, the sheer reflective glass facades overpower the historic character of the neighborhood, ever to be diminished by such a tour-de-force. The unfortunate architectural character of the tower is only the tip of the iceberg for this troubled development though; its history reveals corruption.

The controversial Trump Soho condo-hotel, seen looming above Varick Street, has been troubled since the day it was conceived by two Russian-born developers to capitalize on the Trump brand. Photo by Brian Pape.

The Trump name has been scrubbed from numerous buildings and facilities around town and beyond. That Mr. Trump is not the developer or a majority owner of numerous buildings labeled “Trump” is a shock to many; in Manhattan, Trump has not actually been the developer of a condominium building since the Trump Park Avenue in 2003.

Long before the Soho troubles, Trump reported $916 million in business losses in 1995. In 1997 and 1998, most Wall Street banks stopped lending to him; two of his Atlantic City casinos had filed for bankruptcy. Trump Entertainment Resorts owned the Trump Taj Mahal casino, but it was charged with violating anti-money-laundering regulations 106 times in 1990 and 1991. Trump forestalled its bank loan payment by suing the lender, Deutsche Bank. Nevertheless, his casino filed for bankruptcy in 2009 and Deutsche Bank continued to lend Trump millions more. How crazy is that?

Then, in 2006 Trump was approached by two Soviet-born developers envisioning a residential condo building where the zoning does not allow such a project. One of the Trump SoHo developers was Bayrock Group, led by Tevfik Arif and Russian native Felix Sater; Sater had pleaded guilty to racketeering in a money laundering case in 1998. The other was the Sapir Organization, started by Soviet-born financier Tamir Sapir and his son Alex Sapir.

In a lawsuit against Bayrock, its former finance director Jody Kriss portrayed the firm as a money-laundering operation used to conceal transfers of illicit funds and disguise them as legitimate real estate transactions, describing Trump Soho as a “monument to spectacularly corrupt money-laundering and tax evasion,” though it says in a footnote that “there is no evidence that Trump took any part in, or knew of, their racketeering.” But Kriss said, “Donald had to agree to every term of every deal and had to sign off on everything.” Sater spoke about being Trump’s adviser (until about 2011), saying he “reported everything” to Trump, “sometimes twice a day…”

They devised the “non-residential” designation of their condo-hotel hybrid idea, but that meant buyers couldn’t qualify for mortgages; only “all cash purchases” could be sold. At the Trump SoHo, 77 percent of the cash sales were to shell companies, raking in $110 million between 2010 and 2013, records show; the shell LLCs were often formed just weeks or days before buying a unit. Three units were bought by a former oligarch from Kazakhstan with money he allegedly stole from the former Soviet republic, according to a California lawsuit filed in 2014 by Kazakhstan’s largest city, Almaty.

The developers assigned Trump a minority partner to capitalize on his popularity as a TV personality on “The Apprentice.” In 2008, Donald Trump Jr. described the project: “In terms of high-end product influx into the U.S., Russians make up a pretty disproportionate cross-section of a lot of our assets; say in Dubai, and certainly with our project in SoHo and anywhere in New York.”

Despite community opposition and lawsuits, peculiarly, city officials allowed the building to be approved as a condo-hotel. But the trouble had just begun.

When Bovis Lend Lease, the general contractor, started excavation work, it was discovered that the site held the 19th-century burial vaults of a church known for its abolitionist stance and inclusion of African-Americans. Relocation work had to precede further construction.

Then as the structure rose to the 43rd level, the concrete form supports, which failed to meet code standards, collapsed when concrete was being poured, sending worker Yurly Vanchytsky 42 stories down to his death and seriously injuring another worker.

Trump promoted the building so vigorously that some early purchasers, in a 2010 lawsuit, accused him, his son Donald Jr., his daughter Ivanka, and others of exaggerating the number of sales to boost prices, which is fraud. Trump Soho promoters were saying that 60 percent, or “more than half,” of the building’s units were already sold, but documents found by the lawsuit team indicated the total sold was not quite 16 percent. Trump settled the suit with a non-disclosure agreement.

The Trump SoHo deal was canceled in November, 2018, and the building is now called the Dominick Hotel and Spa. The only Trump-labeled building near the West Village got a new name, but the bad taste remains for many.

Brian J. Pape is a LEED-AP “green” architect consulting in private practice, serves on the Manhattan District 2 Community Board, is Co-chair of the American Institute of Architects NY Design for Aging Committee, and is a journalist who writes about architecture.

Leave a Reply