DONALD TRUMP’S GREAT, AMAZING, ABSOLUTELY
ACQUISITION OF VIRGINIA’S BIGGEST VINEYARD A LOOK AT HOW THE WOULD-BE PRESIDENT REALLY NEGOTIATES HUGEBY MARISA M. KASHINO
80 WASHINGTONIAN ★ NOVEMBER 2015 HUGE Trump used Albemarle Estate’s grand opening in July for some stumping. PHOTOGRAPH ON PREVIOUS PAGE BY ANDREW SHURTLEFF/CORBIS DONALD TRUMP HAD BEEN BARNSTORMING to reopen the place in all its abundantly get sued than pay full price. For another, for a month by the time his shiny black Trumpified glory. he won’t let an old friendship stand in the helicopter touched down in Charlottesville Standing in front of the mansion’s way of a good bargain. And while he may in mid-July. columned entrance, the developer could not enjoy getting bogged down in contrac- On the stump, Trump had been bellowing have stuck to his real-estate talking points, tual fine print, he sure does love picking about just how tough he would be in negotia- steering the crowd of local pols, media, out drapes. tions: Unlike the loser politicians who made and neighbors to details such as the gold One more thing: When he wants to, Don- small talk with Chinese leaders, he’d said, he wastebaskets and floor-to-ceiling trompe ald Trump can be the neighbor from hell. wasn’t afraid to demand a deal on our terms. l’oeil. But Trump was a candidate now, so By the time he was through with Mexicans, this was no longer just some local-yokel At first blush, a Virginia country he’d insisted, their government would be chamber-of-commerce event. house seems an uncharacteristic purchase paying us for the fence along the US border. It didn’t take long for him to launch into for a New Yorker known for his skyscrap- TRUMP AT ALBEMARLE BY ANDREW SH URTLEFF/AP IMAGES; ALBEMARLE ESTATE COURTESY OF JIM BONNER But now, on a pastoral swath just a short a campaign-style speech about how he’d ers, casinos, and seaside golf courses. But trip down the road from Thomas Jeffer- blown away the competition and come to as anyone with cable or a Twitter account son’s Monticello, Trump was talking about own the joint, the county’s most infamous knows, Trump likes things that are “amaz- a different kind of negotiation: the one that estate—and done so, naturally, under an ing” (as in every crowd at every campaign ended with his getting a steal of a deal on a incredible set of terms. The property, he stop), “great” (how America will be again Virginia bed-and-breakfast. explained, had once been listed for $100 mil- after he’s President), and “the best” (his The occasion wasn’t really a campaign lion. He’d gotten it for a measly $6.5 million. poll numbers). event at all. Rather, it was a ribbon-cutting “That’s what our country should be do- “If you look at us as a company, what’s for the Trump Organization’s latest gilded ing with its deals,” he boasted. the one thing that’s consistent? It has property—Albemarle House, which is to As with his policy proposals, The to be the biggest, the best, the greatest,” your typical Old Dominion country inn Donald left out most of the details that says Trump’s 31-year-old son, Eric, a vice what Trump is to your typical politically day. Like, say, the multiple lawsuits that, president of the Trump Organization and minded plutocrat. among other things, generated a paper heir to the family gene for hyperbole. “My In its day, the 23,000-square-foot trail giving us a much more transparent father, over the years, has bought some of mansion was among the largest and most view of Trump the negotiator than we the best mansions of the world. It’s just expensive in Virginia, with 45 rooms, a might have if he’d actually been negotiat- something he loves.” private chapel, and English gardens. But ing with a foreign regime. Eric is referring, first, to Mar-a-Lago, by 2010, the estate was in trouble. That’s Drill down and you discover there’s the 17-acre Palm Beach estate constructed when Trump entered the picture. And five plenty to learn about Trump from this in the 1920s by cereal heiress Marjorie years later, the real-estate mogul was there particular transaction. For one, he’d rather Merriweather Post. Trump snapped it up D 82 WASHINGTONIAN ★ NOVEMBER 2015 The Kluges liked to party at the home The Donald helped pick out the in the ’80s; Trump made it a B&B. drapes: “He decides in two seconds.”
in 1985 for $10 million and later turned it was its proximity to Washington, where the tabloid excess of the go-go ’80s. into a members-only club and spa. And Eric lived as a student before graduating John Kluge and his wife Patricia, a former he’s talking about Seven Springs, originally from Georgetown in 2006. While there, model 34 years his junior, arrived in Char- built in 1919 by financier Eugene Meyer, he had a job at a private investment firm in lottesville in 1985 to raise their son in their eventual owner of the Washington Post, Tysons. “If you look at Tysons Corner when just-built neo-Georgian mansion. From the whose daughter Katharine Graham grew I worked there versus today, that place is beginning, the Kluges didn’t exactly fit with up there. In 1995, Trump bought the 213- not even comparable,” he says. old-money Virginia horse-country types. acre Westchester County spread for $7.5 As a Republican candidate, the elder They hosted movie stars and European million and converted it into a private Trump publicly disdains “totally broken” royals at Gatsby-grade parties and bedecked summer compound. Washington. But as a real-estate mogul, their home in the most opulent decor new Albemarle House, though much newer, he’s banking on the resilience of the place money can buy—from hand-engraved brass is similarly pedigreed. It was built 30 years whose economy is buoyed by the federal doorknobs to heavy gold custom drapery. ago by billionaire John Kluge. A media government. The Kluges gave millions to local causes, and entertainment mogul—he owned the Thus in 2009, a year before he grabbed but within a few years they also found Harlem Globetrotters and Ice Capades for Albemarle House, Trump bought the themselves at the center of a macabre as well as an empire of TV and radio sta- former Lowes Island golf club in Sterling. spectacle: Wildlife agents raided the “game tions—Kluge was a king of 1980s New York He spent $25 million upgrading it to a preserve” on their grounds where Patricia right alongside The Donald. According Trump National Golf Club, which will host liked to hunt, uncovering mass graves of to Eric Trump, his dad was a big Kluge the Senior PGA Championship in 2017. hawks, owls—and neighborhood dogs. fan: “John was the wealthiest man in the In 2012, he beat out a pack of bidders for Three gamekeepers were found guilty of world.” (Not quite, but in 1989 Forbes did Pennsylvania Avenue’s storied Old Post killing the animals, which had been men- name him richest in America.) Office, which will be reborn in 2016 as a acing birds kept on the Kluge property Buying the mansion of America’s Trump International Hotel, just blocks for shooting. At trial, according to a 1989 wealthiest resident might have been incen- from the White House. account in Spy magazine—the great chroni- tive enough for Trump, but the property “We couldn’t be more bullish on Wash- cler of Trump’s own ’80s misadventures—a had more to offer than just his old pal’s ington,” says his son. And in their efforts neighbor testified that he had once found imprimatur. It was also home to an award- to wrest control of Albemarle House, they his dog hanging by the neck on the Kluge winning vineyard, an obvious addition showed it. land. (The article hypothesized that the to the Trump family’s portfolio of luxury estate might be cursed.) brands. “Wine is incredibly sexy,” says Eric, Well before Trump ever laid The marriage survived the tabloid who oversees the Charlottesville property. eyes on it, Albemarle House had a history mess—throughout it all, the couple main-
PHOTOGRAPH OF ALBEMARLE INTERIOR COURTESY OF JIM BONNER OF ALBEMARLE INTERIOR COURTESY PHOTOGRAPH Finally, and not insignificantly, there that fit nicely with the candidate’s roots in tained they knew nothing—but not by
NOVEMBER 2015 ★ WASHINGTONIAN 83 much. In 1990, John and Patricia divorced. lawn, Trump made himself the immedi- She got to keep Albemarle. ate neighbor of the house. And who would Nine years later, Patricia established want a bank-owned mansion with The Kluge Estate Winery on 960 acres of the Donald camped out front? estate, with hopes of making top-tier wines. A couple of months later, the Kluge Early on, she and her new husband, Bill vineyard hit the auction block again. Moses, a former IBM executive, had much Trump swooped in and bought it for $6.2 success, beating California and French million, outbidding Virginia developer Sal vintages for industry accolades. The couple Cangiano. He now owned the vast majority then ramped up production and began of the land around Albemarle House. work on a related real-estate venture: a Of course, he didn’t have the mansion gated community of McMansions, each itself—yet. with its own mini-vineyard. To finance the But when Bank of America put it back projects, they took out tens of millions in on the market for $16 million, would- loans, including a $22.8-million Bank of be buyers made themselves scarce. “In America mortgage on Albemarle House. order to not waste people’s time, it was Then the economy crashed. important to try to explain what was In 2009, Patricia put Albemarle on the going on,” when possible buyers called, market for $100 million. Michael Rankin, says Jim Bonner, a Charlottesville realtor managing partner of Washington’s TTR who had the listing. According to Bonner,
Sotheby’s, had the listing. Though he once Trump’s involvement became clear, PHOTOGRAPH OF TRUMP HELICOPTER BY DPA PICTURE ALLIANCE/ALAMY; PATRICIA AND JOHN KLUGE BY RON GALELLA/GETTY IMAGES; ALBEMARLE INTERIOR BY RON SACHS/AP IMAGES admits “it was really bad timing,” he says only a few prospects bothered to show a few potential buyers expressed inter- up in person. est in turning the place into “a big family Those who did so found a surreal, Cold compound.” But even though he hacked the When Patricia Kluge ran into War spectacle. The bank had hired security money trouble after her divorce price first to $48 million, then $24 million, from her husband John, Trump guards who, according to Trump winery none panned out. swooped in and strong-armed employees, stood zealous guard by the While the house was in limbo, Patricia’s the bank to get Albemarle house and routinely pulled them over. On House—but not without a fight. floundering vineyard hit the auction block. his side of the property, in full view of the But it couldn’t attract a buyer, either, and mansion’s front door, Trump planted grim was repossessed. It wasn’t long before Kluge, black-and-white signs that read: no tres- desperate to avoid financial ruin, teamed up passing. this land is owned by trump with an old friend: Donald Trump. virginia acquisitions llc. just paid. All he needed was the front yard. It thus would have been virtually impos- Trump’s initial run at Albemarle It was not, of course, your standard lawn. sible for a future resident of Albemarle was a fairly simple one. Eric says his father The land outside the mansion’s front door House to do anything—go to the grocery offered Kluge’s creditors $28 million to buy and bordering its long driveway is a 217- store, get the mail—without looking at or several pieces of the estate and keep it out acre stretch of rolling greenery that had a setting foot on land owned by America’s of bankruptcy. But he was turned down. former life as an Arnold Palmer–designed best bloviator. “They told us they wanted north of $100 golf course for John Kluge’s private use. “It was a 1,500-acre sea of Trump,” says million,” Eric says. Because of a quirk in the Kluges’ divorce Eric. “We surrounded them. Even the road A year later, in February 2011, Trump settlement, John Kluge had kept this front that went to the house was on our property.” made another play just for the mansion—by patch even as his ex-wife took the mansion Trump’s neighbor-from-hell routine then in foreclosure—when it went up for and the land underneath. That meant the had been carefully cultivated over time: auction one morning in front of the 1800s- yard was insulated from Patricia Kluge’s In the ’80s, while he was trying to get era Charlottesville courthouse. His lawyers financial woes. It was still the family’s to rent-controlled tenants to vacate one of started the bidding at $2 million but bowed give. (John Kluge died in 2010, leaving his New York City apartment buildings, out at $3.6 million. Bank of America placed the 217 acres in a trust for his son; Patricia he proposed housing the homeless in the the winning offer, buying the house from Kluge is a trustee.) complex. When he bought Mar-a-Lago in itself for $15.26 million. (It was betting it Trump knew this was his way in. In early Palm Beach, he deployed the same tactics would make the sum back when it relisted 2011, he got the Kluge trust to sell him the as at Albemarle—only instead of using a the property.) yard for the bargain-basement price of front lawn as leverage, he used a beach. Trump wasn’t worried. He had a plan he $150,000. “That,” says Eric, “is the art of The way Trump tells it, he didn’t want to believed would eventually get him Albe- the deal right there.” pay Mar-a-Lago’s $38-million asking price marle House for far less than the bank had Here was the logic: By buying the front but knew that an old friend had bought the
84 WASHINGTONIAN ★ NOVEMBER 2015 beach in front of it. Trump got his friend to “IT WAS withdraw from the case. Why? Trump sell him the beach for $2 million—and then, apparently didn’t want to pay full price for according to remarks he made in Washing- his lawyer, either. ton in 2014, threatened to build “the ugliest Hopper alleged that nearly $95,000 building ever” on it to obstruct the views in bills went unpaid—a significant sum of the mansion. A couple of years later, , A 1500- for his small firm. When he pressed Mar-a-Lago still hadn’t fetched a buyer, the Trumps about the money, Hopper and Trump got it for $8 million. said Eric asked him to cut his fees by 70 Ever since, he and Palm Beach residents percent. At that point, Hopper said he have waged a series of feuds, including wanted off the case. one over a 375-square-foot American flag ACRE Those claims were laid out in a lawsuit Trump put up on an 80-foot pole—twice Hopper filed against Trump’s company. the allowed height. In a lawsuit against the The suit was settled, and Hopper declined town, according to the Associated Press, an interview to discuss the terms. But in a Trump claimed that anything smaller than written statement, he said his “claim for his flag—the size of a studio apartment— SEA OF legal fees” had been “satisfied.” would fail to “express the magnitude of [his] patriotism.” Trump may have been losing in Could a couple of central-Virginia real- court, but he was successful where it estate agents beat back that kind of assault? TRUMP.” counted, for even as they battled each other Of course not. in front of a judge, Bank of America and Showing Albemarle House, Bonner —ERIC TRUMP the Trumps were conducting backroom says diplomatically, “was not particularly negotiations over the sale of Albemarle rewarding.” The most action it got in nine House. For the final rounds, in Septem- months on the market was when a scout- ber 2012, Eric and his dad were both on ing crew, interested in using it as a set for the phone, in direct discussions with the a Steve Carell movie—Foxcatcher, Bonner bankers. “There’s nothing we do in this thinks—came to visit. Even that didn’t company that we’re not all involved with,” work out. The movie was filmed at Lees- Eric says. “We’re the largest mom-and-pop burg’s Morven Park estate. in the world.” With nary another buyer in sight, the Not everything, however, was Trumps got the bank down to their fire-sale going Trump’s way. As part of the deal closing price of $6.5 million. Albemarle to buy the front lawn, the Kluge trust provision was a fairy tale. was theirs. purported to grant Trump right of first It was true, the bank said, that such a But a week after the deal, Trump had a refusal on the mansion that was supposedly right had existed at one time. But it was at- new issue to sort out. According to the sale attached to the yard. Obtaining the right tached to a much larger parcel of the estate contract for the yard, if Trump ultimately meant Trump would have the chance to that—in the course of the Albemarle saga— succeeded in buying Albemarle House, he’d match the offer of any other buyer Bank had been chopped up into several pieces. be required to make an additional payment of America lured in. In other words, it was The two sides sparred for almost a year. of as much as $350,000 to the trust of Pa- yet another way for him to upend a sale to Finally, the judge entered his ruling: for the tricia Kluge’s son. After the mansion sold, anyone but himself. bank. (This doesn’t stop Eric Trump from the trust’s lawyers came to collect. After Albemarle House went on the mar- saying today that the suit was settled to Trump refused to pay. ket for $16 million, Eric and Trump Orga- “our satisfaction” and bragging, “We were In a letter written by Eric, the Trumps nization general counsel Jason Greenblatt able to acquire the land and the right of first instead demanded that the Kluge trust sent letters to Bank of America notifying it refusal, literally for pennies.” In reality, of write them a check. The trust, Eric wrote, of Trump’s first-refusal right and warning course, the Trumps bought something that owed the Trumps for the “tremendous that ignoring it would lead to litigation. didn’t exist.) legal fees and expenses” incurred while liti- “They were pushing the boundaries,” On top of that, The Donald had found gating over the bogus right of first refusal. says Raighne Delaney, a partner at the himself another adversary. So much for the old family friendship. The Arlington law firm Bean, Kinney & Kor- His company had hired Richmond- trust proceeded to sue, accusing Donald man, who represented the bank during area lawyer David Hopper to represent it and Eric Trump of fraudulently inducing the ordeal. But Delaney and the bank against Bank of America in the land-rights it to sell them the front yard without ever were having none of it. They filed a fed- skirmish. But a few months into the mat- intending to pay for it fully. eral lawsuit essentially claiming that the ter, Hopper asked the judge to let him CONTINUED ON PAGE 99
NOVEMBER 2015 ★ WASHINGTONIAN 85 DONALD TRUMP inside Albemarle House, she typically and nonsense than him. It’s not getting works for them seven days a week.) deterred by the 4 million pages of due We climb into her black company SUV— diligence, because that’s what kills a deal.” she opens my door, as “Mr. Trump” always Looking back at the battle over Albe- does for her when he visits. We stop at an marle House, though, it’s also worth noting old cattle barn and a building once used to that sometimes a little due diligence can house John Kluge’s antique carriage collec- save you hefty legal fees. tion, both converted into wedding venues, Still, there was undoubtedly some art and pass a chapel where Patricia’s parents to the Albemarle deal. But just how much are interred, before the mansion finally is debatable. Trump’s ability to get what looms into view. Given its soap opera of was once a $100-million house, then a CONTINUED FROM PAGE 85 a past, Woolard explains that only paying $48-million house, and then a $16-million guests are typically allowed inside. Oth- house for “peanuts,” in Eric’s words, was “Trump’s modus operandi is he doesn’t erwise, town looky-loos would constantly as much a result of the broader economy, pay unless he gets sued,” says the trust’s come to snoop. not to mention the questionable choices lawyer, Edward McMahon Jr. “If he’d just Though the house was constructed to of Patricia Kluge and her lenders. To use honored his contract, none of this would’ve resemble one that would have stood in terms Candidate Trump employs, it was been necessary.” Thomas Jefferson’s day, the 1980s influ- less like out-negotiating China and more This fight—lawsuit number three against ences are unmistakable. The foyer, for like beating Greece. the Trumps relating to Albemarle—was instance, appears at first to be marble-clad, settled quietly within a couple of months, but like much of the mansion, it’s been Or perhaps Albemarle House preventing a tabloid field day. “My guess is painted to resemble stone. Across the hall, really is cursed, as Spy once speculated. they decided they’d gotten a little too far up a flat-screen TV near the check-in shows a Because it looks likely that the Trumps, over their skis and decided to rein it back as video on a loop: A soaring orchestra plays even after securing control of the place, are soon as possible,” says McMahon. as the black Trump-copter touches down, in for another fight over it soon. Eric Trump says he maintains “incred- then Eric steps out, then there’s a series of Two years ago, Eric Trump unveiled the ible respect” for Patricia Kluge and her before-and-afters depicting the estate’s family’s next vision for Albemarle’s front family. Bill Moses, Patricia’s husband, $20-million renovation. lawn: a PGA-class golf course. The plans declined on his and his wife’s behalf to When Trump bought the place, it was immediately drew fierce opposition from talk about the drama around their former a wreck. Ornate plaster moldings were the Trumps’ rural neighbors. estate. But he did say this when asked if the marred with water damage, custom wallpa- Because Patricia Kluge years ago put the settlement was favorable to his stepson’s per peeled everywhere, and the whole man- land under a conservation easement, the trust: “Oh, yeah.” sion had been stripped of curtains, light Trumps can’t simply start construction. And then he laughed. fixtures, and furniture, which Patricia had They’d have to get a state organization in auctioned to stave off creditors. The living charge of preserving open green space to The scenery surrounding Albe- room’s gold drapes are the only originals agree that building a golf course wouldn’t marle House doesn’t require any Trump- to the house—not because they didn’t sell violate the terms of the easement. The style exaggeration. It actually is tremen- but because Donald Trump bought them Trumps would also have to get county of- dous, phenomenal, and really good. to hang at Mar-a-Lago. When he landed ficials to issue a special-use permit allowing I visit on a cloudless September day, and Albemarle House a couple of years later, them to circumvent zoning restrictions on the first stop on my tour is the winery’s the drapes came back home. commercial recreation. tasting room. The vineyard is Virginia’s Woolard leads me past a curving stair- The family started the application for largest in acreage, and some 20,000 cases way, plastered with floor-to-ceiling wall- the permit in 2013 but has since let it of Trump Chardonnay, rosé, Viognier, and paper designed to look like billowing gold expire. Which doesn’t mean the locals can other varieties ship annually to 26 states fabric—another relic of 1980s nouveau breathe easy. “To say that we’re busy is an and four countries. (Like the property, riche. I ask about it because it’s impossible understatement, and truthfully, we just the wines don’t require any embellish- not to. It’s original to the house, and there haven’t been pushing it,” says Eric. “But at ing. Trump can’t take credit for that part, was debate, Woolard says, about taking it the right time, I think [a golf course] would though—he still employs Kluge’s wine- down. But “Mr. Trump loves it”—and when be a great complement to that property.” maker, Jonathan Wheeler.) it comes to decor, Mr. Trump makes the After all, John Kluge used to have one on Trump-branded polo shirts and crystal final calls. When outfitting the mansion, the very same lawn. wineglasses line the shelves. My guide, Woolard and an interior designer nar- If Donald Trump decides to push the general manager Kerry Woolard, says rowed down window and wall coverings, issue, local NIMBYs are prepared to dig online sales of the merch have doubled furniture, and fixtures to three options for in, and—thanks to Patricia Kluge’s ease- since Trump announced his campaign. Trump to select from. Says Woolard: “He ment—he may very well lose. But that She’s gracious and lovely, and a die-hard decides in two seconds.” doesn’t mean he won’t make life hard in Trump fan. That is Trump’s gift, and maybe also the interim. W “I have never met smarter people,” she his curse. Asked to explain how his dad’s says of her bosses, Donald and Eric. “They dealmaking skills would apply in the White Senior editor Marisa M. Kashino are the best people I’ve ever worked for.” House, Eric offers this: “There’s no one (@marisakashino on Twitter) can be (And because she lives in an apartment who’s better at cutting through red tape reached at [email protected].
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