Trump towers: Kluge vineyards go to The Donald
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Team Trump: From left, attorneys Steve Blaine, Les Goldman, and Jason Greenblatt watch the bidding for Kluge's estate.PHOTOS BY LISA PROVENCE -
Loudoun developer Sal Cangiano wanted a winery, but ended up with some primo real estate at bargain prices.PHOTO BY LISA PROVENCE -
The same day as the April 7 Kluge auction, Donald Trump appeared on Today and discussed whether he'd run for president and Barack Obama's birth certificate.PHOTO BY LISA PROVENCE
At times bidding in increments of $10,000, Donald Trump won the parcels containing Kluge Estate Winery and Vineyard for $6.21 million, with the remainder of the Kluge holdings going to a developer from Loudoun County in a marathon, 2 1/2-hour auction.
More than 20 people registered to bid at the April 7 absolute auction of Patricia Kluge's foreclosed-upon 901-acre spread, but ultimately it came down to two bidders: Trump through his representatives, and Sal Cangiano.
And the big loser in the bidding war seemed to be Farm Credit, which had loaned Kluge nearly $35 million, bought the vineyards for $19 million in December, and watched it go for $7.3 million today.
"What can you say?" says Farm Credit's attorney Bill Shmidheiser. "The market has spoken."
In the first round of bidding on the five tracts plus a lot that included the Kluge Estate trademarks, Cangiano was the high bidder at $4.225 million
But the bidding wars were only beginning, and anyone could offer a higher price for any or all of the parcels.
And that's when buyers started offering bids on combos of the tracts. For more than an hour, Cangiano and Trump representative Jason Greenblatt jockeyed for position in $10K increments to score the Kluge property, frequently huddling with associates and stepping outside to make phone calls.
When the bidding closed at 3:24pm, Trump bid $6.21 million for two parcels: the 129-acre tract with vineyards and the winery, and the largest 647-acre tract with vineyards, the auction pavilion, office and the carriage musuem.
Cangiano ended up with the six-acre parcel containing the Farm Shop for $420,000, a 92-acre parcel for $250,000, and a 21-acre tract for $450,000.
"We plan on using it as a vineyard," says Greenblatt about Trump's future plans for the property. "Everything he makes is super-luxury, and this wine is."
Some of the wines will keep the Kluge label, he says, but he didn't rule out the possibility that some bottles in the future will wear the Trump brand.
In paring down the parcels, ultimately Trump didn't see the Farm Shop as an essential, and another can be built– or the carriage museum can be put into tasting use, suggests Greenblatt.
Bill Moses, former Kluge Estate CEO and spouse of Patricia Kluge, attended the auction and seemed in a cheery mood, considering that the enterprise to which he's devoted the last decade was slipping from his grasp after an unsuccessful bid to derail the auction in court the day before.
"We're very pleased because we know Donald is interested in bringing back the quality and making it a world-class winery," says Moses. "We're very gratified and we hope to work with him."
Kluge and Trump are friends who go back 25 or 30 years, Moses estimates, but they haven't talked to Trump about making wine with him, says Moses.
And the lowball price for the property, appraised by the bank at $17.9 million, did little to reduce the amount Kluge and Moses still owe Farm Credit.
Cangiano has no experience in the wine biz. "I thought it would be fun," he says, and he had imagined putting his name, Salvatore Cangiano, on a wine label.
He's interested in the nearly 24,000-square-foot Albemarle House, which was foreclosed upon by Bank of America, but after the bidding, he says, "I don't know, I didn't get the vineyards."
Trump, too, is interested in Albemarle House, and he's purchased its 216-acre front yard from a trust for Kluge's son, John Kluge III. "We've been negotiating with Bank of America, but the price is still too much," says Greenblatt.
Perhaps for the author of The Art of the Deal, it's just a matter of time. There was a lot of strategy in the day's bidding, says Greenblatt.
And those $10,000 bids in a multi-million-dollar deal? Says Greenblatt, "Why overpay for something?"
27 comments
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The Donald and Charlottesville, A match made for the presses!!
What Biff said. Going from Kluge to Trump? Talk about out of the frying pan and into the fire. Welcome to Charlottesville, you short-fingered vulgarian (thanks to Spy magazine for that one) You've only owned the place for hours and we're already praying you'll go away.
As far as the guy who bought the Farm Shop is concerned, get a load of this guy. Oh man, the neighbors better run! That corner of Albemarle County just went right down the terlit... http://www.publicintegrity.org/investigations/luap/articles/entry/1444/
Re Bill's claims that he and PK will be helping their buddy Donald-- that's just wishful thinking. I'm pretty sure Trump wouldn't even hire that pair as bootblack and scullery maid.
You guys and girls (commentors) need to mind your own business.
I would rather see Trump & Associates here than all these implants who have "retired" to Albemarle County and whine about everything ruining "their" quiet little community.
Oh come on now...I said nothing inappropriate. Are you hoping to be on the payroll?
GSOE you do realize the extreme irony of telling anyone to mind their own business don't you? Not have much of anything to do doesn't free you of that injunction if you apply it to others.
"You guys and girls (commentors) need to mind your own business."
From the Department of Do As I Say and Not As I Do?
While he did get the property at a bargain price, certainly he's not serious about actually producing wine there? Why would a man as wealthy as Donald Trump choose central Virginia as the location for a winery? There is exactly one winery in the area, Barboursville, that makes passable wine.
Methinks the stated intention of maintaining a winery is a ruse for the local rubes. Mr. Trump got a real estate bargain and, when the time is right, will make a pretty penny selling to the greater fool.
Va does make good vine and if he sell it, well that's what he does. It doesn't
Change my life one bit. It is something different who know when he become pres.
There might be even more B.S to talk about
Blech.
Wine's a vanity business around here and I doubt it's a positive cash flow business once you factor out all the honeypot tax subsidies for "farm" activities. If you've already got lots of money and you want to launder it by running it through a "farm" which "loses money" then it makes sense, but if you started out with a piece of land and no money in the bank, you'd go broke running a winery.
Of course Trump has picked up a good development parcel, but only if the market for meadow mansions returns. Otherwise he could end up just trying to catch a falling knife. This transaction does sort of lay bare the reality of the real estate market around here and should serve as a warning to all these folks with county meadow mansions who have been trying to sell without success for the last several years.
If Trump purchased the land with development as his main goal he would have bought the other tracts as well for the bargain that they went for. 6 million is inconsequential to him, so he bought out a good friends play business for them. The biggest give away is that he is allowing Moses/Kluge to continue running the winery even have they have proven their ineptness at running.
I hope they do well, wine is such a subjective thing that I think they might be able to sell it with Trumps backing.
Should be interesting to see Ms. Kluge on Celebrity Apprentice.
My initial and enduring reaction to this is: There goes the neighborhood. Having been in this area for well over 40 years we're seeing yet another rich person setting down for a landing, and their gravity will bend space out on Rt 53, believe me.
Not wanting to steal anyone's thunder or moniker, but Mr Trump is a complete gasbag, blowhard, and self-aggrandizer whose calculus is rising with his frivolous television show (would you really hire any of those people?!), his "presidential" parrying, his birther riff. And once his arc has peaked, and it will, he will certainly NOT settle in Virginia with his coif and posse. The man will sell that property for a profit the first chance he gets, which is his right, and never look back. Hell, he already owns the "Southern White House". Just ask him.
There goes the neighborhood, indeed.
The Hook should investigate and reveal to its readers how with the help of taxpayers dollars that Farm Credit will come out of this without a loss on the books. Unfortunately for landowners and particularly the other wineries in the region this is yet another blow to the value of local agricultural real estate. I am sure however that the tax assessor will consider this an invalid sale in order to not use this as a comparable sale for assessment purposes in order to keep the tax dollars flowing into the coffers for future wasteful spending.
The Hook should investigate and reveal to its readers how with the help of taxpayers dollars that Farm Credit will come out of this without a loss on the books.
The investigation would be interesting - even if it doesn't lead to the conclusion you've already reached. Regardless of the fact that Farm Credit of the Virginias is part of the Farm Credit System GSE, that GSE has not received bailout funds (like FNME, FRE) and it's not being supported by taxpayer dollars.
Even if it were, the loss on this loan still gets charged on their books. I'd love to hear how this turns out into a bailout? That's a genuine question.
I am sure however that the tax assessor will consider this an invalid sale in order to not use this as a comparable sale for assessment purposes in order to keep the tax dollars flowing into the coffers for future wasteful spending.
This assessor discretion is, to me, pretty infuriating. The city assessor appears to be more abusive than the county assessor in this regard.
Biff Diggerance, there is a big difference here. :)
When I whine about something, it usually involves the Constitutional Rights of citizens being trampled upon by those in authority who feel they can do as they please. Those in authority who feel as if they can lie and deny and get by with it. Those in authority who will lie and deny while conspiring with their counterparts. Those whi lie and deny and actually believe "sovereign immunity" protects their crooked behinds.
Who cares?
Seriously, who cares if he chooses to keep the winery going, who cares if he turns around and resells it to somebody else who either keeps the winery going or sells it yet again, who cares whether he bought it just to help his pals. None of it changes anything for you people here in your personal lives. So who cares?
to boooo!: It will make little to no difference to the vast majority of citizens of Chv/Alb. Some lawyers will profit, some financial transactions will take place. Some people will be employed, which is good. I'm assuming that there are no current employees remaining of the Kluge/Moses properties. But it always offends my sense of fairness when audacious blowhards and bullies prevail. And this transaction, the price paid notwithstanding, is just more evidence that it's the way things work.
And everyone should be on the lookout for the financial ramifications that ensue; if there's a big enough loss on the part of some financial institution, lender, et cetera, put your wallet in your front pocket. There will be shared sacrifice.
Change “We will sell no wine before its time” to “We will run for president and whine all the time.”
"I simply wish to refuse alligence to the state to withdraw and stand aloof from it effectually. In fact, I quietly declare war within the state"
'
Henry David Thoreau
AREN'T THERE MORE IMPORTANT THINGS TO RANT ABOUT ? LIKE THE MORGAN HARRINGTON KILLER WHO IS STILL ON THE LOOSE? NOT TO MENTION A LIST OF MANY THINGS LIKE 3 WARS BANKRUPT STATES ? WHO CARES ABOUT THE DONALD OR KLUGE ???
so Trump gets nearly 800 acres for 6.21 million ...
I wonder how the appraisal of Bisquit Run compares...
lets see 6.212 million divided by 776 acres is 8000 an acre
with Bisquit Run it was appraised at 72million? for 1200 acres. That would be 60,000 an acre...seems to me someobody has some expalining to do... after all, they were both in default and distressed..... (and Bisquit Run did not retain the development rights unless they coughed up MILLIONS in proffers)
Lets ask Tim Kaine...
@Frank P-- I like your style. You should post here more often.
@Logan-- once again, Trump will not be letting PK or Bill run the winery for him! Seriously!
I feel sorry for the surrounding neighbors, some of whom I know. The level of spoogey ostentation is about to hit the stratosphere 'round those parts. Have you ever seen the inside of Trump's apartment? Ye gods and little fishes, what a clusterfork of eye-searing awful. Wonder if his first "improvement" will be to hot glue Swarovski crystals to the front gate pillars?
Donald buys winery
Bill buys equip
Patricia running it back into the ground
Donald buys winery
Bill buys equip
Patricia running it back into the ground
I just read the article I posted here this morning. Very thorough.
Albemarle House now shows up on MLS list 487335 at 16 million, I don't think it was listed last week. When Sunnyfields went up for sale (near Monticello) they first wanted close to 10 m. (and the house is now on 12 or so acres) now it is 6.5 million (473425 MLS). If Trump got Felicia Rogan to run the winery that would be news, not Pat Kluge trying to run it again. I can't imagine F. Rogan wanting to get into it.