Trump Set for Lower Tax Bill on Wall Street Tower as Value Slips
(Bloomberg) -- Donald Trump is poised to get a property-tax cut for his Wall Street office tower as part of reductions New York is giving building owners in the wake of the pandemic.
The estimated market value for property tax purposes of 40 Wall St. -- one of the former president’s largest holdings in Manhattan -- was lowered by 29% to about $130 million for the coming fiscal year, the city’s tentative assessment shows. That means the Trump Organization could pay about $1.7 million less in tax on the skyscraper, according to data from the New York City Department of Finance.
“It’s a pretty big reduction,” said Martha Stark, a professor at New York University’s Robert F. Wagner Graduate School of Public Service and a former finance commissioner for the city. “The former president is likely to pay less taxes as a result of the pandemic and the Finance Department’s estimate of the value -- and that’s true for lots of buildings across the city.”
Trump’s building isn’t the only one that saw a decline. The market value of office towers across Manhattan dropped by an average of 25%, according to a report last month from New York City’s Independent Budget Office.
The 72-story Art Deco tower near the New York Stock Exchange has invited scrutiny in recent years because of disparities between what Trump told tax authorities and lenders about the building’s performance. The changes to its value in the property tax roll, though, reflects the city’s efforts to reassess property during a public-health crisis that has upended real estate markets.
For Trump, a lowered assessment could offer a break on a building that has been hurt by falling revenue and turmoil surrounding his controversial presidency -- issues that stretch across his property empire. Cushman & Wakefield Plc, the broker at the Wall Street property, distanced itself from the billionaire following the deadly Capitol riot incited by his supporters, while some tenants have said they’re leaving or considering it.
A representatives for the Trump Organization didn’t immediately respond to a request comment. The Department of Finance didn’t have an immediate comment.
New York officials in January released their tentative assessments for the coming tax year, the first to weigh the impact of the pandemic. Final assessments will become public later this month, and could reflect additional reductions sought by owners.
Manhattan office landlords have been hit especially hard as the pandemic emptied skyscrapers and pushed cost-conscious companies to reconsider how much space they need after months of remote work. Vacancies and sublease space have been piling up in the financial district, in particular, as tenants look to move to newer buildings elsewhere.
The 91-year-old skyscraper at 40 Wall St. has specific challenges. The tower, emblazoned with “The Trump Building” in gold lettering, is busier than it was a few months ago, according to the person behind the marbled front desk on Thursday, who asked not to be named because they were trained not to talk to the press.
The person, wearing a black mask discreetly marked with TRUMP on the chin, said the building is operating at about 10% of its normal 3,000-person capacity.
Revenue at the building fell to $27.7 million in the nine months through Sept. 30, loan documents show. That’s equivalent to around $37 million for 2020, a drop of more than 11% from a year earlier.
The Trump Organization holds more than $135 million worth of debt tied to the property, according to the loan documents. That debt is due in 2025 and is a big chunk of the more than $590 million that the company owes in the next four years. More than half of it is personally guaranteed by Trump himself.
The Trump Organization could have more significant money coming its way from a deal last week on an office tower it co-owns with Vornado Realty Trust in San Francisco. Investors snapped up $1.2 billion of bonds in a transaction that gives the owners a $617 million payout.
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