Trump Tower Financing Hits that Gray Phase

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By Michael Hinman

Staff Writer

TAMPA - Three months have passed since ground was broken for Trump Tower Tampa on Ashley Drive. And as the foundation nears completion and developers look to go vertical, two crucial questions remain: Who is going to build the 52-story structure and where is the money coming from?

Those questions have been asked in abundance by observers, even fueling speculation once again that the $225 million project is in jeopardy. Ask anyone at SimDag LLC, the company partnering with The Trump Organization on the tower, however they'll say there's nothing to worry about.

"You've got to remember that the sales response for this project, even after (a unit price) increase, has been phenomenal," said David Hooks, spokesman for the Trump Tower Tampa project. "The foundation work is continuing, and because of that, there's an opportunity to improve the terms of the financing being negotiated. The developers are taking that opportunity to finalize the best terms possible."

Still waiting for the announcement

When the ceremonial groundbreaking took place March 2, SimDag CEO Frank Dagostino admitted higher costs for construction material pushed the overall price tag of the tower by $75 million. While SimDag was able to eat some of those increases, more than $40 million had to be passed on to condominium buyers looking to buy units for between $700,000 and $6 million.

At the same time, however, Dagostino said two different financing companies were being approached to foot $200 million, with SimDag investing the other $20 million. He declined to reveal the names of those companies but said they would be named before the month ended.

Keeping the financial backers under wraps has nothing to do with the overall viability of the project, Hooks said. It's all about getting the best deal, something Kimberly Graham, a senior VP at Bank of America, said is very possible.

"It's different with all of our developers," said Graham, who works in the bank's commercial real estate division. "Some of our developers will start construction before we close a loan because they want to get started. Usually, though, they won't start until after closing."

Condominium construction, especially in Florida, remains big business, and there is a lot of money available in the financial market for projects like this, Graham said.

"Presales take care of that," she said. "If you get a reasonable deposit, that normally satisfies any concerns."

Should be no surprise

Even with a price increase at Trump Tower Tampa, nearly all the buyers were retained, Hooks said. Knowing foundation work won't be completed until August, SimDag officials decided there was time to try and work the best deal while continuing presales of a select number of the 192 units.

The same has been said for finding a contractor, which SimDag has been looking for since ending Turner Construction's involvement in April.

SimDag officials, however, shouldn't be too surprised that these issues are fueling speculation of an early demise to the project, said Byron Moger, senior director of the Capital Markets Group of Cushman & Wakefield.

"There's definitely enough turmoil in the retail condominium market that it's not surprising that people are questioning transactions," Moger said. "But if they continue to have the presales that have been announced, then there shouldn't be any problem in getting financing."

Trump Tower Tampa is one of a half dozen Trump-themed projects under construction or recently completed in Florida. They include the Trump Grande Ocean Resort & Residences in the Miami area; two projects in Fort Lauderdale: Trump International Hotel & Tower and Trump Las Olas Ocean Resort & Residences; Trump Hollywood in South Florida; and a trio of 45-story towers in Sunny Isles Beach.

Everywhere you turn ...

When Trump Tower Tampa is completed in late 2008, it will be just six stories shorter than the famous Trump Tower in New York City that was completed 25 years earlier. However, the two cities will hardly be unique in having "Trump Towers."

More than a dozen other Trump Towers are being built or already finished in various cities across the country and overseas. The largest one by far is Trump Tower Chicago, which will be the second largest tower in the city at 92 stories when it's finished, around the same time as Tampa's, at an estimated cost of $750 million. That's 20 stories larger than Trump World Tower in New York City, which had its 72 stories completed in 2001 for $300 million.

Other projects are under way in Philadelphia, Las Vegas, New Orleans, Toronto and even Panama City, Panama. Probably one of the most unique-looking designs is coming out of the Middle East where a 48-story tower that looks like it just stepped out of a science-fiction film is expected to be completed in Dubai for $600 million by the end of 2009. That design recently replaced the original plans drawn up in 2004 that would have constructed a Trump Tower that resembled a blooming tulip.