Trump Soho in talks with Elliman on marketing
[Updated 1:15 p.m., April 15, 2011 from a previous version of the story] Trump Soho hotel-condo recently entered discussions with a number of brokers, including Prudential Douglas Elliman, on a potential deal to replace Prodigy International, according to sources familiar with the discussions.
Developers and lenders have been in discussion about how to revive sales at the luxury tower, located at 246 Spring Street, following a 2010 deal with Los Angeles-based CIM Group to recapitalize more than $295 million in debt.
When asked about this last week, Elliman declined to comment, while a spokesperson for Trump Soho denied the move.
“We as sponsors always believed that Prodigy was doing a good job,” said Julius Schwarz, a principal at Bayrock Group, one of the lead developers at Trump Soho. “Under the circumstances I can’t believe a broker would do better.”
Schwarz told The Real Deal that there may have been talks during the period when CIM was doing its due diligence to “take the temperature of the market.
“Prodigy is staying on the project because they are the best firm for Trump Soho,” he insisted.
“Prodigy Network has been and continues to be the exclusive sales and marketing agent on the project and they are very pleased with their progress,” the spokesperson said.
But, sources said that a number of teams within Elliman have been approached on the deal; it was unclear whether one of the teams was willing to take on the project.
In February, Prodigy, led by president Rodrigo Nino, slashed prices by 21 percent at Trump Soho in the hope that additional buyers would come forward and move some of the 279 units that remained unsold at the building, originally developed by Bayrock Group and the Sapir Organization.
Prodigy originally split brokerage duties with Core, which focused on domestic sales while Core focused on international sales, until December 2008, when Prodigy was named the exclusive broker.
Prodigy and Trump were facing a federal fraud lawsuit filed in August 2010 by 17 buyers who alleged that sales figures were vastly inflated at the property. In August a group of those buyers filed suit seeking more than $1.7 million in deposits back and full rescission of their contracts.
The Real Deal reported in 2010 that only 16 percent of Trump Soho’s units were under contract with bonafide buyers, despite repeated claims by Prodigy and the developers that more than 60 percent of the units were sold.
By November 2010, Trump Soho officials offered a 50 percent refund on deposits to other buyers that agreed not to join the lawsuit.
Lawyers for the developers argue that because the Trump Soho units were hotel units, and not exclusively used by the purchasers, that they do not fall under the Interstate Land Sales Full Disclosure Act, which allows buyers to sue for alleged fraudulent statements. The case is still winding through federal court.
According to an amendment filed earlier this year to the Trump Soho offering plan, Donald Trump Jr., Alex Sapir and Schwarz have all been appointed to the Trump Soho board of managers as president, vice president and secretary, respectively.
The amendment also states that Bayrock Chairman Tefvik Arif, is no longer involved in the “planning or further consummation” of the project.
Prodigy did not return repeated calls for comment.