Donald Trump objects to settlement reached over Tijuana project

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Investors who lost millions of dollars when a Donald Trump condominium project in Baja California failed during the economic meltdown are going to get some of their money back — over Trump’s objections.

A developer of the Tijuana resort agreed to pay $7.25 million to settle a lawsuit brought by 190 buyers — many of them from Southern California — who lost $22 million in deposits after the project failed in 2008.

Trump, who remains a defendant in the investors’ lawsuit, wanted developer Jason Grosfeld to cover 100% of the buyers’ losses. He even tried to stop the settlement. Trump said he had licensed his name to the 525-unit oceanfront project but was not involved in its development.


Los Angeles County Superior Court Judge Anthony J. Mohr approved the settlement after a hearing Tuesday in Los Angeles. Afterward, Trump said he intended to appeal.

“If they’re going to settle, they should settle for everybody,” Trump said Wednesday in an interview with The Times. “We weren’t building it. We weren’t developing it. We weren’t selling it.”

Plaintiffs’ attorneys Bart Ring and Daniel King argue that Trump portrayed himself as the builder in marketing materials, enticing many of their clients to buy.

In one promotional video, Trump said: “When I build, I have investors that follow me all over.... They invest in what I build. And that’s why I’m so proud of Trump Ocean Resort.”

The Trump Ocean Resort Baja Mexico was planned as a luxury high-rise resort with panoramic views of the Pacific Ocean, swimming pools, tennis courts and fine dining spread over 17 acres of coastal property.

Grosfeld and his partner, Adam Fisher, paid Trump $500,000 to license his name to the project, according to court records. It was not an unusual arrangement for Trump. He made his name in real estate and casino development but now is best known for his reality TV hit, “The Apprentice,” and frequently licenses his name to real estate projects that are managed by other developers.


Plaintiffs’ attorneys Ring and King said they intend pursue additional damages from Trump; his son, Donald Jr.; daughter, Ivanka; co-developer Fisher; and others involved in the project. The lawyers said they were disappointed that Trump had tried to block the settlement.

“The decision by the Trumps to stand in the way of the buyers getting some of their deposits is shameful but not unexpected given how the Trumps marketed the project and how they’ve litigated the case,” Ring said. “If he truly cared about the buyers, as he said he did, then there would be no good reason for the Trumps to stand in the way of the settlement.”

Many of the buyers had attended a December 2006 sales event at a posh hotel in San Diego, lining up to buy about 80% of the available units in the first phase of construction.

In 2008, the construction lender backed out of the project and the property lender foreclosed. Buyers filed suit after they learned their deposits were not being returned.

“The group is very pleased with the results of getting back one-third of their deposits, but they’re not stopping there,” Ring said. “We remain very confident in ultimately the buyers getting back every dollar they lost in this project from all the responsible parties, including the Trumps.”

Trump said that in addition to appealing the settlement’s approval, he intended to sue the developers in Los Angeles. He had sued the developers in federal court in New York in 2009, but dropped the case in 2012.