Trump Venture Folds, Leaving Buyers Strapped

Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump.

A steel frame with a crane on the roof of the oceanfront high-rise Elegancia project is seen at the...

A steel frame with a crane on the roof of the oceanfront high-rise Elegancia project is seen at the coastal corridor in Rosarito, Mexico, Monday, Feb. 23, 2009. Developers completed big projects nearby in recent years and the area remains home to thousands of Americans who live there full- or part-time, but the cliff-lined coast is pocked with partially-built towers. The failure of Trump Baja is a big blow to a real estate market just south of the border from San Diego that was booming just two years ago with U.S. buyers looking for second homes and easy profits.(AP Photo/Guillermo Arias)

(AP)

The Southern California couple paid $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.

But admiration for the celebrity developer and star of "The Apprentice" has now turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million.

"I can't even stand to see Trump's face on TV," says Linda Drake, a psychologist, whose husband is a commercial airline pilot and financial adviser.

Investors were told last month their money was spent and they won't get a penny back. A single mother in suburban Los Angeles lost $200,000 and won't be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units, including two penthouses.

The project's collapse comes at a delicate time for Trump, whose casino company, Trump Entertainment Resorts Inc., filed for bankruptcy protection last month. He also is embroiled in a lawsuit to avoid paying debt on the struggling Trump International Hotel & Tower in Chicago.

Trump and his children heavily promoted the northern tip of Mexico's Baja California coast. He sold 188 units for $122 million the first day they went on a sale at a lavish event in a downtown San Diego hotel in December 2006.

"I went out and saw this site, and I was blown away by it," Ivanka Trump told The Associated Press in June 2007. "From the minute I saw it, it was a deal I had to do."

The location was a contrast to more expensive Mexican coastal markets such as Puerto Vallarta, Los Cabos and Cancun, she said.

The Trumps remained buoyant even as the U.S. housing market began to crumble. Ivanka assured buyers in an October 2007 newsletter that all Trump projects were immune to a slowdown.