LYNDHURST, NJ-It turns out that Donald Trump's deal to rescue the troubled EnCap golf/residential project here carries virtually no financial risk for his organization. In fact, Trump will be paid upwards of $15 million over the next three years to lend its name and expertise to the project.
According to details released late yesterday by both Michael Cohen, Trump's EVP, and the New Jersey Meadowlands Commission, the state agency that has final approval over anything that happens on the nearly 800-acre former landfill site, the troubled project will be renamed Trump National. That brand has been utilized at other Trump properties, including a golf club in Bedminster.
The three-year deal calls for virtually no direct investment by the Trump Organization, but the group will effectively take charge of the project. With Trump and EnCap Golf Holdings working as partners under the Meadowlands Development Venture LLC umbrella, the existing plan will effectively be junked in favor of a new plan that Trump will develop.
Current plans by EnCap, an entity of Cherokee Investment Partners, call for approximately 1,800 residences, a hotel and two golf courses. According to Cohen, Trump's revised plan will focus on upwards of 4,000 homes and a hotel, but just one golf course.
The deal also calls for Trump and EnCap to seek upwards of $350 million set aside by the state and local municipalities for the project's development, but put off limits to EnCap as its problems with the project worsened. The two organizations will also seek an extension of a 60-day deadline, set to expire next week, that had been placed on EnCap to get its financial and environmental issues in order. Through a statement issued late yesterday, the NJMC reiterated its position that EnCap "fix the environmental problems" and pay $16 million towards that purpose by next Tuesday, "or be removed from the project."
Also on the financial side of the deal, EnCap has agreed to pick up a $40-million loan from iStar Financial. The funding would provide working capital for the two organizations to set the re-planning and pre-development process going.
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