Biz Herman for The Washington Post
NEW YORK — Inside Trump Tower, swank suit-maker Marcraft Clothes once rented the entire 18th floor, outfitting its offices with fireplaces, mahogany-lined closets and two bars for schmoozing customers.
But then Marcraft fell $664,000 behind on rent and went out of business last year — its assets having dwindled to $40.75 in a checking account and “1,200 damaged coats,” according to court filings.
One floor up, a business school once led by Kardashian family matriarch Kris Jenner was consumed by lawsuits, falling $198,000 behind on payments to Trump Tower by October 2020, according to court papers. And on the 21st and 22nd floors, the company that made Ivanka Trump shoes racked up $1.5 million in unpaid rent, according to a lawsuit that the Trump Organization filed this year.
But through all that — as Trump Tower has dealt with imploding tenants, political backlash and a broader, pandemic-related slump in Manhattan office leasing since last year — it has been able to count on one reliable, high-paying tenant: former president Donald Trump’s own political operation.
Starting in March, one of his committees, Make America Great Again PAC, paid $37,541.67 per month to rent office space on the 15th floor of Trump Tower — a space previously rented by his campaign — according to campaign-finance filings and a person familiar with the political action committee.
This may not be the most efficient use of donors’ money: The person familiar with Trump’s PAC said that its staffers do not regularly use the office space. Also, for several months, Trump’s PAC paid the Trump Organization $3,000 per month to rent a retail kiosk in the tower’s lobby — even though the lobby was closed.
Campaign-finance experts said the payments do not appear to be illegal. This kind of PAC has very few restrictions and no expiration date, so Trump is free to spend its money at his own properties as long as he wants.
But they said Trump is continuing a practice that was a hallmark of his presidency by exploiting loose regulations — and his own supporters’ trust — to convert political donations into private revenue for himself.
“He’s running a con,” said Paul S. Ryan, a campaign-finance expert at the watchdog group Common Cause. “Talking about political expenses — but, in reality, raising money for self-enrichment.”
The Trump Organization did not respond to questions. A spokeswoman for Trump’s political operation, Liz Harrington, defended the spending.
“We are paying market rate for leased office space used to help President Trump build a financial juggernaut to help elect America First conservatives and flip both the House and Senate to the Republicans in the midterm elections,” Harrington said.
Harrington said that the PAC had also paid for the lobby kiosk for several months, even though the lobby was closed, because it had inherited the kiosk from Trump’s 2020 campaign and “all of the campaign merchandise was still in the space.” Harrington said officials expected the lobby to reopen, but — when it remained closed — the PAC stopped paying. The last payment was made in early May.
Trump Tower, a 58-story glass tower on Fifth Avenue, served for years as Trump’s primary home, the headquarters of his business and a kind of physical avatar of his success. Its was the set for TV’s “The Apprentice,” and the backdrop for Trump’s announcement of his 2016 presidential campaign.
But, in its midsection, Trump Tower is something more prosaic: a Manhattan office building, with 12 floors available for lease. The Trump Organization’s headquarters occupies two other office floors.
The leased floors serve as part of the collateral for one of Trump’s biggest outstanding debts, a $100 million loan with the full amount due next year, according to data kept by the real estate analysis firm Trepp. Trump still owns his businesses, including this one, but says that his sons Eric and Donald Trump Jr. manage them day-to-day.
To assess the financial health of Trump Tower — and the importance of the revenue it receives from Trump’s own PAC — The Washington Post examined filings with New York taxing authorities, as well as loan documents, campaign-finance records and lawsuits involving Trump Tower tenants.
In the years before he became president, Trump reported to New York City that the tower’s office spaces produced income of between $8 million and $11 million per year in rent. Those filings were obtained by The Post after a public-records request.
The most recent filing that the city provided to The Post covered 2017. The Post could not find detailed figures on rental income from the office spaces after that.
But it is clear that some of Trump’s customers have recently fallen into turmoil, and at times ended up behind on their rent.
One was Marcraft, a clothing-maker that offered $1,400 Trump-branded suits in the heyday of “The Apprentice.” Its 18th-floor suite included a golden Buddha in the elevator lobby and a bar decorated with “a colorful light display for after-hour cocktail parties,” according to an archived news release from its architects. It was luxe enough that the New York Times wrote about it in 2006.
Potential customers “look at it with the feeling, ‘You are cool, this is interesting,’ ” a Marcraft executive told the Times.
But Marcraft fell on hard times. Last year, it entered insolvency proceedings in a New Jersey — a kind of state-court version of bankruptcy — saying in court filings that it had more than $30 million in debts, including $664,000 in unpaid rent at Trump Tower.
“It was, for lack of a better word, a carcass,” said Morris Bauer, a New Jersey attorney whom the company assigned to take over its meager assets and deal with its creditors. Bauer said he wasn’t sure what happened to the Trump Tower suite, but he knew Marcraft had vacated it.
The company, Bauer said, “exists in name, but it’s not operating.”
One floor up from Marcraft, on Trump Tower’s 19th floor, are the offices of the Legacy Business School, which once boasted Kris Jenner as its chairwoman. (She reportedly resigned a few months after the school opened in 2016.) The school is expensive — its $70,000 annual tuition is $19,000 higher than Harvard University’s.
But Harvard doesn’t hold classes in Trump Tower.
“It is not just an educational campus,” the school’s website says, making the tower one of its main selling points. “It is studying at the most powerful building in the world.”
But that school also appears to have fallen into turmoil.
In February, investors who claimed to be the Legacy’s majority owners sued the school’s founder, Alessandro Nomellini, demanding Nomellini give up control of the school and its offices. The investors included documents showing that, as of last year, the school owed $198,000 in unpaid rent, taxes and fees to Trump Tower. They asked a judge to cancel the lease entirely. Nomellini has challenged these claims in court.
Nomellini’s attorneys declined to comment to The Post — and then, on Wednesday, asked to withdraw from the case, saying that Nomellini had not paid their bills. Nomellini himself did not respond to questions from The Post.
Another major Trump Tower tenant — occupying all of the 21st floor and part of the 22nd — had been Marc Fisher Footwear, the manufacturer of shoes for Ivanka Trump’s now-shuttered brand and others. But earlier this year, the Trump Organization sued Marc Fisher Footwear for unpaid rent. The suit said the shoemaker had stopped paying rent in November 2020, and owed more than $1.4 million.
That lawsuit was settled on undisclosed terms in April. A person familiar with the suit said that Marc Fisher Footwear had vacated its spaces at Trump Tower. The firm did not respond to requests for comment from The Post.
Trump Tower does have office tenants still in place: Gucci still rents the massive retail space facing Fifth Avenue. The foundation of Trump friend Stewart Rahr still occupies space on the 24th floor, according to its website. The hops seller Hopsteiner moved in. The Industrial and Commercial Bank of China still rents office space, though it reportedly downsized in 2019. The bank did not respond to questions from The Post.
In the first quarter of this year — the latest for which data was available — Trump Tower’s commercial spaces were 75 percent occupied, according to Trepp data. That is lower than the occupancy rates for the tower from any year going back to 2013, Trepp reported. Citywide, this is not a good time to be trying to lease out office space. The effects of the coronavirus pandemic, combined with the construction of new buildings, have created an unusual glut of available space: A recent report by the firm Savills found that 18.4 percent of Manhattan office space was for rent, the highest level in decades.
One office has remained rented and producing income throughout this tumultuous time: Suite 1501. This 5,490-square-foot space was leased for years by Trump’s 2020 campaign, even though the campaign’s main headquarters was in Virginia. After Trump left office, his PAC moved in, according to the person familiar with the PAC. The person spoke on the condition of anonymity because they were not authorized to discuss the committee’s finances.
The rate Trump’s PAC is paying Trump’s company for space in Trump’s tower appears to be about $85 per square foot annually. That’s close to the average for midtown Manhattan, according to Savills, though it’s less than the $122 per square foot that Trump got from Marc Fisher Footwear.
At Trump Tower, the former president’s PAC appears to be a quiet tenant. Under typical office conditions, with about one worker per 175 square feet, that much space might hold 30 people. But the PAC’s latest campaign-finance filing only listed three employees at that address as of June. And even those three don’t always work there, according to the person familiar with the PAC: They work from home, or follow Trump to his clubs in Palm Beach, Fla., and Bedminster, N.J.
Even when Trump does visit Trump Tower, the person said, he doesn’t use the PAC’s rented space. He works out of his old office up in the Trump Organization’s headquarters on the 25th and 26th floors.
One recent weekday, a Post reporter sought to visit the PAC’s office — but was turned away by a security guard, who said there was no point. Nobody would be there.
Even if Trump’s PAC was a loud tenant, it seems unlikely that the neighbors would notice. Trump’s own marketing materials indicate the other office space on the 15th floor is vacant.
Fahrenthold, O’Connell and Dawsey reported from Washington. Isaac Stanley-Becker and Alice Crites contributed to this report.
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Trump Tower's key tenants have fallen behind on rent and moved out. But Trump has one reliable customer: His own PAC. - The Washington Post
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