Real Estate | The Trump brand in a Saudi “gigaproject”?

The Trump Organization is holding talks that could result in a Trump-branded property in one of Saudi Arabia’s largest public real estate complexes, according to the CEO of the Saudi company responsible for the project.

These negotiations are the latest example of how President Donald Trump mixes governance and family affairs, particularly in the Gulf countries. Since returning to office, the president’s family and businesses have announced billions of dollars in new overseas projects, made hundreds of millions from cryptocurrencies and sold tickets to a private dinner hosted by Mr. Trump.

The president is set to welcome Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, to Washington this week.

The crown prince is overseeing a $63 billion project to transform the historic Saudi city of Dariya into a luxury destination with hotels, shops and offices. The Trump Organization has previously lent its name to mixed-use projects touting their “iconic luxury.”

“Nothing has been announced yet, but it won’t be long,” said Jerry Inzerillo, CEO of the Dariya development project and long-time friend of Donald Trump, during an interview. He added that it was “only a matter of time” before the Trump Organization struck a deal.

Saudi officials toured the Dariya real estate project with Mr. Trump during the president’s official visit in May, aiming to pique his interest in the project, Mr. Inzerillo said.

“It turned out to be a happy coincidence, and it was probably pretty smart of us to say, ‘OK, let’s use him as a real estate developer.’ He loved it,” says Mr. Inzerillo.

The crown prince visits

This week, Crown Prince Mohammed bin Salman is expected to make his first visit to the United States in seven years. He hopes to sign a mutual defense agreement with Washington and eventually advance a deal to transfer U.S. nuclear technology to Saudi Arabia.

This creates a scenario in which the head of the White House discusses national security issues with a foreign leader who is also a key figure in a potential trade deal with the president’s family.

Business deals and diplomacy are increasingly intertwined for Mr. Trump and members of his family. Some engaged in trade negotiations across the world, combining lucrative projects and political connections.

Dariya is one of several ongoing Saudi projects that are so large that officials refer to them as “gigaprojects.”

The Trump Organization did not respond to questions about the potential deal, nor did Eric Trump, one of the US president’s two sons who oversee the family business. It can be difficult to separate hype from reality in international real estate discussions. Speculation does not always lead to negotiations, and negotiations do not always result in the signing of contracts.

But Jerry Inzerillo’s comments echo similar remarks from Dar Global, the Trump Organization’s largest foreign business partner and a key intermediary with Arab governments and Persian Gulf businesses.

Dar Global CEO Ziad El Chaar said last month that new Trump projects were in the works in Saudi Arabia.

“You will see us announcing other collaborations with megaprojects,” he told the Al-Monitor news site, which specializes in Middle East issues.

Dar Global did not clarify whether these remarks referred to Dariya or another deal that has not yet been announced. All “gigaprojects” belong to the Saudi sovereign wealth fund.

Dar Global did not respond to our requests for comment.

Projects are multiplying

Coupled with comments from Dariya Development Project CEO Jerry Inzerillo, Ziad El Chaar’s remarks highlight the flurry of deals in the Persian Gulf involving the Trump family since last year.

In Saudi Arabia, a Trump Tower is planned in Jeddah and two projects have been announced in Riyadh. A Trump hotel and tower have sprung up in Dubai, the largest city in the United Arab Emirates. And a deal for a golf course in Qatar allowed the Trump family to partner with a state-owned real estate company in that country.

Ziad El Chaar and Dar Global oversaw all these transactions. “We started through a partnership with the prestigious Trump Organization, which immediately gave an international dimension to the project,” Mr. El Chaar said last year in Oman, speaking of a golf course and Trump hotel being built as part of a project backed by the Omani government.

Each company generates licensing fees for use of the Trump name. Dar Global paid US$21.9 million (about C$30.7 million) to the Trump Organization in licensing fees last year, according to its financial disclosures. Part of this money goes to the president.

Licensing deals can be lucrative, especially if a project does well. Often, a company is compensated for the use of its name without being required to invest money in the project itself. The Trump Organization’s licensing agreements are not public, so it is impossible to know the terms.

“Majestic skyscrapers”

Dar Global, a subsidiary of major Saudi development company Dar Al Arkan, has close ties to the Saudi government. The company’s sales offices in London and Riyadh display architectural models of Trump-branded skyscrapers that have yet to be built. The promotional material contains photos of Trump family members.

The Trump Organization had given up on new foreign deals after Donald Trump’s election in 2016, but that commitment ended with his first term. The recent mix of business and politics marks a sharp break from American norms, but it is common in Gulf countries, where hereditary ruling families hold near-absolute power and the term “conflict of interest” carries little weight.

In Saudi Arabia, development officials saw Donald Trump’s official visit in May as an opportunity to spark interest in Dariya, Mr. Inzerillo said. On his first night in Riyadh, before the official dinner, the US President and Crown Prince Mohammed bin Salman toured the renovated historic center of Dariya. The models of this gigantic project were even presented during this official dinner.

The next day, at an investment forum in Riyadh, Mr. Trump heralded what he called “an exciting time” for the Arabian Peninsula.

“Over the past eight years, Saudi Arabia has proven the critics completely wrong,” he said. He praised the “majestic skyscrapers” he had seen and “some of the exhibits” Crown Prince Mohammed had shown him, calling them a sign of “extraordinary genius.”

This article was published in the New York Times.

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