The Trump Organization is severing ties with the controversial Trump SoHo building in New York City.
The development, which is a hybrid hotel-condominium building where owners of units can only live in their properties for a certain amount of time each year, has the potential to be a thorn in the side of President Trump — linking him to murky financing arrangements, allegations of fraud and a Russian-born developer with a criminal past.
The skyscraper has been one of the Trump Organization's many business interests. When Trump was elected president last year, ethics experts urged him to sell off his private holdings to avoid distractions and conflicts of interest. Instead, Trump moved his businesses into a revocable trust, managed by his two older sons. Trump is the sole beneficiary of the trust.
And the building's history — which NPR explored in a recent episode of the Embedded podcast — has repeatedly drawn controversy, including a lawsuit alleging fraud and shady financing.
On Wednesday, Trump International Hotels Management and the board of the Trump SoHo Condominium New York said in a press release that they would wind down the Trump Organization's involvement by the end of the year. The announcement did not specify what led to this move.
The unexpected end of the business relationship with the SoHo development comes as Trump's financial ties are reportedly being investigated by Department of Justice special counsel Robert Mueller in connection with a larger probe into Russian election interference last year and its possible links to Trump's 2016 presidential campaign.
The Trumps do not own the hotel, but the Trump Organization has managed it and been paid for licensing the Trump name. Donald Trump had personally announced the project on a 2006 episode of his TV show The Apprentice and three of his children — Donald Jr., Ivanka and Eric — led its development. The hotel opened in 2010.
As NPR has reported, the project made news from the very beginning: from the discovery of a burial vault on the construction site to a heated standoff with the neighborhood and a grisly death of a construction worker.
One particularly sensitive matter involved one of the SoHo developers, called Bayrock, which has been accused of being a money-laundering operation used to conceal transfers of illicit funds from overseas, according to a lawsuit by Bayrock's former finance director. Bayrock has denied the allegations.
The project was also sued by some of the early buyers of its condos, who said they were misled about many of the units were sold. Trump later settled the suit, returning nearly all of their down-payments.
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The Trump Organization said today it's cutting ties with one of its New York City hotel properties. The 46-story Trump SoHo has been plagued by questions about its financing from the time it was completed in 2008. And since the election, there have been signs its revenues have fallen. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: The company said it would sever its contract with the California firm that owns most of the hotel by the end of this year. The Trump Organization doesn't own the property itself. But it manages the hotel, and it gets paid a price for the use of the Trump brand name.
The building is a hybrid hotel-condo located near the upscale neighborhood of SoHo. Investors are allowed to live in the units for part of the year, but mostly the units are rented out as hotel rooms. The Trump SoHo was opened in a flurry of publicity. Trump himself announced the project on an episode of "The Apprentice."
(SOUNDBITE OF TV SHOW, "THE APPRENTICE")
PRESIDENT DONALD TRUMP: Located in the center of Manhattan's chic artist enclave, the Trump International Hotel and Tower in SoHo is the site of my latest development.
ZARROLI: But the hotel faced strong opposition from neighborhood groups, and questions were raised about Bayrock, the firm that co-developed it. Among the principals of that firm was Felix Sater, a Russian-born former felon with ties to organized crime. A lawsuit filed by one of the firm's executives alleged that Bayrock was kept alive by money laundering and tax evasion.
Trump himself was also sued by some of the building's buyers who said he had misrepresented the number of units sold. Trump later settled the suits, giving the buyers back nearly all of their money. After the real estate crash, Bayrock defaulted on a loan and was forced to give up the building, but Trump's name stayed on it. In recent years, there have been signs the property has struggled financially. Only a small number of the units have been sold to investors, and the main restaurant closed earlier this year. The restaurant's lawyers say it had struggled since Trump's election.
More recently, Special Counsel Robert Mueller has been investigating the Trump campaign's ties to Russia and money laundering by Trump associates, and that has focused new attention on the property. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.