Mar-a-Lago's value was front and center in Trump's New York civil fraud case

A New York judge’s Feb. 16 order that former President Donald Trump and his company must pay $355 million in penalties for fraudulently overvaluing real estate assets reminded many observers of Mar-a-Lago's prominent role in the civil fraud case.

On the same day of Justice Arthur Engoron’s ruling, Trump said at his private Mar-a-Lago Club that he would appeal.

Engoron’s order also barred the former president and The Trump Organization from conducting business in New York for three years, in addition to other penalties.

"In order to borrow more and at lower rates, defendants submitted blatantly false financial data to the accountants, resulting in fraudulent financial statements," Engoron wrote in his ruling.

Trump’s sons Donald Trump Jr. and Eric Trump were ordered to pay $4 million each and prohibited from doing business in New York for two years.

Engeron had already ruled that Trump, The Trump Organization and other defendants misled banks and insurance companies through documents that consistently overvalued Trump properties, including his private Mar-a-Lago Club, where he and former first lady Melania Trump live in Palm Beach.

Here are a few issues involving Mar-a-Lago’s value that have been highlighted by the case.

Mar-a-Lago's value was disputed

In early December, powerhouse Palm Beach real estate broker Lawrence Moens of Lawrence A. Moens Associates testified in New York that in 2021, former President Donald Trump's Mar-a-Lago Club and its 17.5 ocean-to-lake acres would have been worth slightly more than $1 billion in uber-wealthy Palm Beach’s real estate market.

Moens’ estimates of Mar-a-Lago’s value between 2011 and 2021 appeared to reflect the steady price escalation that has become a signature feature of Palm Beach real estate.

In a pre-trial deposition, Moens said he would have valued Mar-a-Lago at $655 million in 2011. The property’s value would have soared to $1.04 billion in 2021, according to Moens’ deposition.

That figure contrasted sharply with the value Engoron assigned to Mar-a-Lago based on the Palm Beach County property appraiser’s valuations going back more than a decade, from $18 million in 2011 to $27.6 million in 2021.

Why were Palm Beach County’s valuations so low for Mar-a-Lago?

The county property appraiser’s assessments, which are used to compute annual property taxes, took into account long-standing deed restrictions that prevent Mar-a-Lago from being used for any purpose other than a private club.

The assessments were based on Mar-a-Lago's annual net operating income as a club, not on its resale value as a home or on its reconstruction cost.

How does Palm Beach County’s evaluate the value of Mar-a-Lago?

The county appraiser’s staff uses a standard “income approach” in determining Mar-a-Lago's value, with the value based on the club's net annual operating income. The club provides the appraiser with its income figures, and by law that information is kept confidential.

The same method is used for determining the taxable value of some other social clubs in the county.

What did New York Attorney General Letitia James say about Mar-a-Lago’s value?

The lawsuit brought by James said that between 2011 and 2021, The Trump Organization assigned to Mar-a-Lago a value high that topped out at $739 million. Those values, according to a statement issued by James, were “based on the false premise that (Mar-a-Lago) was unrestricted property and could be developed and sold for residential use, even though Mr. Trump himself signed deeds donating his residential development rights, sharply restricting changes to the property, and limiting the permissible use of the property to a social club.”

What about selling Mar-a-Lago?

During the court proceedings, Miami-based real estate attorney John Shubin testified on behalf of Trump, telling the court that Mar-a-Lago could be sold as a home, notwithstanding decades-old legal documents in which Donald Trump said he intended to forswear its use as anything but a club.

Shubin testified that “there is absolutely no prohibition on the use of Mar-a-Lago as a single-family residence.”

He noted that the property is simultaneously a club and the former president's residence. Shubin also pointed to a 1993 agreement between Donald Trump and the town that said Mar-a-Lago would revert to private residential use if the club were “abandoned.”

The former president bought Mar-a-Lago to use as his personal vacation home in 1985, restored it and opened it as a private club about a decade later. The estate was built in the late 1920s by cereal heiress Marjorie Merriweather Post, who was married at the time to stockbroker E.F. Hutton.

Would Mar-a-Lago ever hit the market?

Not according to a statement released last summer by Eric Trump.

In August 2023, the real estate website Zillow erroneously stated that Mar-a-Lago had been sold for $422 million. A Zillow spokeswoman blamed the error on incorrect information supplied to the website.

As news of the supposed sale circulated, Eric Trump issued this statement: “Mar-a-Lago has not been sold nor will it ever be. This rumor is asinine.”

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Previous reporting by Jennifer Peltz of The Associated Press contributed to this report.

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Darrell Hofheinz is a USA TODAY Network of Florida journalist who writes about Palm Beach real estate in his weekly “Beyond the Hedges” column. He welcomes tips about real estate news on the island. Email dhofheinz@pbdailynews.com, call 561-820-3831 or tweet @PBDN_Hofheinz.

This article originally appeared on Palm Beach Daily News: Trump's civil fraud case put Mar-a-Lago's value front and center