Sleepy Property in Westchester County, NY, could play a serious function in Trump tax circumstances

NEW YORK (AP) – It’s sleepy by Donald Trump’s standards, but the former president’s centuries-old mansion in New York’s Westchester County could become one of his bigger legal nightmares.

Seven Springs, a 213-acre natural area that surrounds a Georgian-style mansion, is the subject of two state investigations: a criminal investigation by Manhattan District Attorney Cyrus Vance Jr. and a civil investigation by New York Attorney General Letitia James.


In 2009, Trump caused a sensation when he allowed Moammar Gaddafi to pitch a tent on the Seven Springs property north of New York City when he had no accommodation for a UN visit, even though the Libyan dictator ultimately did not stay there.
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Both investigations focus on whether Trump tampered with the property’s value to get bigger tax breaks from an environmental protection deal he struck in late 2015 when he ran for president.

See: New York prosecutors are investigating loans on Trump’s Manhattan property, including the flagship Trump Tower

Seven Springs was bought and re-examined by Trump in 1995 for $ 7.5 million as he prepared to step down and was on the verge of losing the legal protections he had as president. Vance issued new subpoenas in mid-December, and a judge ordered that evidence be returned to James’ office nine days after Trump left Washington.

Other Trump legal issues, such as investigations into his attempts to sway election officials and payments he made on his behalf to women bringing matters forward, have dominated the headlines. But former Manhattan Attorney Duncan Levin said employees go anywhere the paper trail leads.

“While a tax issue related to a maintenance agreement may not be as sexy as a hush money payment, prosecutors are likely to focus on violations of the law that they discover,” Levin said. “Remember, the authorities caught Al Capone for tax evasion.”

See: The Supreme Court is not going to block sales of tax documents to New York City Attorney Cyrus Vance as Trump had hoped

Seven Springs is an outlier in a Trump real estate portfolio filled with gleaming skyscrapers and gilded amenities. It’s listed as a family resort on its website, even though Trump hasn’t been there in more than four years.

At the heart of the property is the mansion built in 1919 as a summer getaway by Eugene Meyer, who later became chairman of the Federal Reserve and owner of the Washington Post. When Trump unveiled a plan to build luxury homes on the property near Mount Kisco in 2006, he hit upon the idea that he and his family would move into the mansion, but that never happened.

The brand new 28,322 square meter apartment has more than a dozen bedrooms, an indoor pool, bowling alley, and tennis court. Meyer’s daughter, the late Washington Post publisher Katharine Graham, was married in 1940 in Seven Springs.

In her memoir “Personal Story”, Graham described ambivalent feelings about going there and wrote: “The older I got, the less I liked the loneliness of the farm, but in my childhood it was as I wrote to my father, when I wrote it was 10, “a big old place.” “

At one point, Meyer owned about 700 acres. A philanthropic foundation he established with his wife Agnes donated 247 acres to the reserve and the remaining land and buildings that made up Seven Springs in 1973 after the death of Agnes Meyer.

The property changed hands again when the Foundation took it back from Yale and operated a conference center there before giving the real estate holdings to Rockefeller University, which eventually sold it to Trump.

Trump paid about $ 2.25 million below list price for Seven Springs and acquired the land to boost his fortune after a string of failures in the early 1990s, including casino bankruptcies and the sale of his moneyless Trump Shuttle airline .

Trump intended to turn it into his first championship-caliber golf course, with an exclusive clientele and high membership fees.

He hired an architectural firm to design fairways and greens, but abandoned the effort when residents raised concerns that lawn chemicals would contaminate neighboring Lake Byram, a local source of drinking water.

Trump then tried to build houses. He proposed the construction of 46 single-family houses, and according to this plan he met resistance from the community, 15 apartment-size apartments, which he described in 2004 as “super-high-end homes” such as have never been seen on the east coast. β€œThe project was held up by years of litigation and houses were never built.

In 2009, Trump caused a sensation by allowing Libyan dictator Moammar Gaddafi to pitch his Bedouin-style tent on the Seven Springs property north of New York City because he had no other place to visit the UN.

Trump initially suggested he did not know Gaddafi was involved, but later admitted that he “made a lot of money” by renting the land to the Libyan leader. Local officials stopped working on the tent and Gaddafi never stayed there.

His development plans went awry, Trump opted for a strategy that allowed him to keep the property but cut his taxes. He granted relief to a nature reserve to preserve 158 acres of meadows and mature forest.

Trump received an income tax deduction of $ 21 million, the equivalent of the value of the preserved land, according to property and court records. The amount is based on a professional valuation in which the entire Seven Springs property was valued at $ 56.5 million as of December 1, 2015.

That was a much higher amount than the valuation by local appraisers who said the entire property was worth $ 20 million.

Michael Colangelo, attorney with the New York Attorney General, outlined the central issue surrounding Seven Springs relief at a hearing last year regarding an evidence dispute.

“If the value of relief has not been properly inflated, then who has benefited from this inadequate inflation, and how much?” Said Colangelo. “It goes without saying that the attorney general needs to see the records that reflect the value of this deduction as it has been disclosed to intermediate companies and ultimately to Mr. Trump personally.”

A message asking for comment was left on Trump’s spokesman. In the past, the Republican ex-president has rejected the investigation as part of a “witch hunt”.

Seven Springs caught investigators’ attention after Trump’s longtime personal attorney and fixer Michael Cohen told a Congressional committee in 2019 that Trump had a habit of manipulating property values ​​- inflating them in some cases and minimizing them in others to get favorable loan terms and tax breaks.

Cohen testified that Trump had annual accounts that said Seven Springs was valued at $ 291 million as of 2012. While giving his testimony, he gave copies of three of Trump’s financial statements to the House Committee on Oversight and Reform.

Cohen said the 2011, 2012 and 2013 statements were the ones Trump gave his main lender, Deutsche Bank, to inquire about a loan to buy the NFL’s Buffalo Bills, and to Forbes magazine to inquire about his Entitlement to be on the list of the richest people in the world.

Trump said on his annual financial disclosure forms as president that the property was valued at between $ 25 million and $ 50 million.

New York’s attorney general was the first to act. James issued subpoenas to commercial real estate services company Cushman & Wakefield for a record of its valuation work on behalf of Trump; law firms who worked on the Seven Springs Project; and to Trump’s company, the Trump Organization, for financial statements and maintenance records.

James also subpoenaed zone and planning records from the three towns of Seven Springs, Bedford, North Castle and New Castle in 2019. Vance followed suit in December with his own subpoenas. A city clerk said the investigators had received “boxes and boxes of documents” in response. This included tax returns, survey maps, environmental studies and minutes of the planning authority’s meetings.

James’ investigators interviewed Trump’s son Eric Trump, executive vice president of the Trump Organization and president of the limited liability company through which she owns Seven Springs. Trump’s CFO Allen Weisselberg; and attorneys Trump hired for the Seven Springs Project who specialize in federal land use and tax disputes.

Investigators have yet to determine if a law has been violated.
Vance, who is a Democrat like James, hasn’t revealed much about his criminal investigation, including the grand jury’s secrecy rules. The prosecution has stated in court files that it is focusing on public reports of “extensive and protracted criminal behavior in the Trump organization.”

Documents filed in connection with the criminal investigation – based on a US Supreme Court ruling last month granting Vance access to Trump’s tax records – listed Seven Springs as a potential target.

Along with the mansion, Seven Springs has a Tudor-style house that once belonged to ketchup magnate HJ Heinz and smaller carriage houses that Trump’s adult sons Donald Jr. and Eric said served as a “home base” when they did ATVs visited the property for hiking and driving.

During his presidency, Trump himself opted for high profile real estate like his golf course in Bedminster, New Jersey and his Mar-a-Lago club in Florida, where he has lived since leaving the White House.

The New York Times reported last year that Trump’s tax records showed he classified the property as investment property rather than personal residence, which has written off more than $ 2 million in property taxes since 2014.

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