The agreement will be filed with the U.S. Bankruptcy Court in New York next week, and the transaction probably will be completed in the first quarter of next year, Winthrop Chief Executive Officer Michael Ashner said in a telephone interview.
“They pushed hard to get the deal done,” he said of the Trump Organization.
Winthrop and Paulson foreclosed on five resorts including Doral in January, and put them into Chapter 11 in February. The filing forestalled maturity of $1 billion in mortgages and $525 million in mezzanine debt. The resorts last month reached an agreement with a mezzanine lender affiliated with MetLife Inc. (MET) that permits the reorganization to continue to September 2012.
There still will be an auction for the Doral resort to seek better offers. So far, there aren’t any other bidders, according to Ashner.
Trump plans to spend “well in excess” of $150 million on renovating the 650-acre (260-hectare) resort, according to a person with knowledge of the deal who asked not to be identified because the information isn’t public.
Rhona Graff, a spokeswoman for New York-based Trump, declined to comment on renovation costs. The agreement was reported earlier today by the Wall Street Journal.
“This wasn’t a discount price,” Trump said in a telephone interview. “We’re paying a very full price, especially in light of the fact of how much money we’ll have to spend to bring it back to its original grandeur.”
Trump will pay all cash for the transaction and expects renovations to take two years.
The developer and reality TV star has acquired at least nine golf properties in the U.S. after mostly steering clear of using his own money to buy real estate since 2005. Trump is seeking more golf deals, particularly in Florida, he said.
“We’re looking at other opportunities,” Trump said. “We’ve been buying a lot of properties. We have a lot of cash.”
After the Doral sale, the remaining resorts in the bankruptcy case will be the Grand Wailea resort in Hawaii, the Arizona Biltmore in Phoenix, the Claremont Hotel & Spa in Berkeley, California, and the La Quinta Resort & Club and Club at PGA West golf course in La Quinta, California. Morgan Stanley (MS)’s CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure.
The owners believe that the Doral offer implies a value for all the resorts “significantly” exceeding the $1.5 billion in debt, according to court filings.
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