New York fraud trial: Could Trump lose control of West Palm Beach golf club? Mar-a-Lago?

Could Donald Trump's New York civil fraud trial lead to the sale or transfer of Trump's Florida assets, like Mar-a-Lago and his Palm Beach County golf clubs?

A top New York real estate lawyer says it might. "The answer is yes," said Massimo D’Angelo, an attorney at the Blank Rome firm in New York.

Last month, Manhattan Supreme Court Justice Arthur Engoron found the former president, his family and his businesses, including the Trump Organization, liable for fraud.

It's a key claim in New York Attorney General Letitia James' $250 million lawsuit that alleges Trump and co-defendants committed fraud in inflating the value of properties they reported on financial statements to get better terms on commercial real-estate loans and insurance policies.

Trump and his companies could be forced to pay hefty sums in damages for the profits they’ve garnered through their allegedly fraudulent business practices. James even could have Trump assets either sequestered or sold off.

In the trial that began Sept. 26, Engoron is considering how much the Trumps and their businesses will have to pay. These entities include the Trump Organization, DJT Holdings, Trump's trust and several other companies licensed in New York state and named in the complaint. The lawsuit also includes assets owned by Trump himself and his sons Donald Jr. and Eric.

Trump civil trial is in New York, but could that case impact his Florida properties?

Although the Trump case is based New York, many of the Trump family's assets, such as golf courses and buildings, are outside the state.

Three major Trump assets are in Palm Beach County: Mar-a-Lago in Palm Beach, Trump National Golf Club in Jupiter and Trump International Golf Club in suburban West Palm Beach.

"The interesting question is what happens with those properties outside of New York," D’Angelo said. "I think it’s too early to tell. You have to wait until a judgment is entered."

The future of Trump-linked assets outside New York is even more important now that Engoron has canceled legal certificates that allowed the Trumps to do business in the Empire State, D'Angelo said.

The valuation of Mar-a-Lago in particular has been targeted by the state attorney general and the judge but defended by Trump, who has raged against the judge's valuation in numerous social-media screeds.

In his recent order, Engoron said he based his $18 million to $27 million valuation of Mar-a-Lago, the Palm Beach private club that serves as Trump's residence, off the Palm Beach County property appraiser's office. He rejected an alternate valuation of nearly $1 billion by Trump and his hired expert, Palm Beach real estate broker Lawrence Moens, who valued Mar-a-Lago at more than $1.5 billion.

Engoron said the valuations were wrongly based on the property's potential to be used as a private residence or subdivided. In the mid-1990s, Trump gave up that right to gain permission from the town of Palm Beach to operate a private club.

In his order, Engoron even mocked Moens. He wrote that after Moens said in a deposition he could "dream up" buyers ranging from Elon Musk to Bill Gates willing to pay more than $1 billion for Mar-a-Lago, "obviously, this court cannot consider an 'expert affidavit' that is based on unexplained and unsubstantiated 'dreams.' "

James, who has been the particular target of Trump's ire, said the property's value is closer to $75 million.

Congressman asks if property appraiser will accede to Trump's valuation on Mar-a-Lago?

The attention being paid to this ocean-to-Intracoastal Waterway property is so intense that on Thursday, U.S. House Rep. Jared Moskowitz, from South Florida, called for an increase in Mar-a-Lagos' property taxes. In a letter to Palm Beach County's property appraiser, he wrote: "Will you be amending the property value in line with the Trump family’s belief that the property is worth well over a billion dollars?”

Another Palm Beach County property, Trump National Golf Club, which is in Jupiter and is also tied to Trump's New York-based businesses and the fraud case. Trump bought the former Ritz-Carlton club for $5 million in 2012. The next year, in 2013, he valued the club at $62 million, D'Angelo said.

Trump properties: Palm Beach County looking for a way to end lease with Trump's West Palm Beach golf course

Then there's the Trump International Golf Club in suburban West Palm Beach.

Trump does not own the land where he operates the golf course, his favorite golfing destination when he is in Palm Beach. Instead, Trump has a long-term lease with Palm Beach County for more than 200 acres.

After the Jan. 6, 2021, attack on the U.S. Capitol, Palm Beach County officials looked into whether the lease with Trump could be canceled. The county's move followed Trump's role in inciting the siege and his impeachment for a second time.

The county determined the lease couldn't be broken based on Trump's actions as president.

More than two years later, Trump is enmeshed in an ongoing fraud trial involving his businesses. But a Palm Beach County attorney who asked not to be named said Tuesday that the county isn't looking into the Trump lease "at this time."

In the past, a lawyer for Palm Beach County has said there is nothing in the lease that allows the contract to be broken in the event of "moral turpitude."

More: Trump Organization conviction unlikely to impact West Palm Beach golf club lease

So-called "bad boy" clauses can terminate a contract for illegal acts and other behavior, which typically is spelled out in legal documents, including leases. The behavior could include actions such as fraud and other criminal matters, or even not filing paperwork in a timely manner.

However, the lease with Palm Beach County contains no provision for cancellation in the event of fraud.

The only provisions for cancellation are nonpayment of rent, bankruptcy or failure to abide by other lease terms, including the maintenance of an insurance policy, according to the lease.

D'Angelo said the insurance requirement could be an issue if the carrier reconsiders the policy, or its valuation, in light of Endogon's finding of fraud.

Why does Palm Beach County lease land to Trump?

Trump's lease of the central Palm Beach County land dates to the 1990s and a $75 million lawsuit he filed against the county. The lawsuit was prompted by Trump's anger about the noise from planes flying over Mar-a-Lago from nearby Palm Beach International Airport.

The lawsuit was resolved in 1996 with a long lease on 214 acres just south of the airport. In 2002, the county struck a deal to lease Trump more land for a nine-hole course.

The 99-year lease agreements require Trump to make monthly payments that have increased over the years to $54,534 for the main 18-hole golf course and $33,804 for the smaller, nine-hole course.

Trump International Golf Club, which opened in 2000, was designed by Jim Fazio Golf Design and Trump. It features 35-foot-tall rock formations, waterfalls and a clubhouse.

Trump also owns the Trump National Doral resort in Miami-Dade County.

Alexandra Clough is a business writer at The Palm Beach Post. You can reach her at aclough@pbpost.com. X: @acloughpbp. Help support our journalism. Subscribe today.

This article originally appeared on Palm Beach Post: Trumps Palm Beach assets could lead to sale in New York fraud case