What's in a name?

If it’s Donald Trump’s, he says it’s a brand worth billions. And the value it creates for his golf courses — priceless.
By Spencer Campbell

https://asoft10294.accrisoft.com/businessnc/clientuploads/Archive_Images/2013/04/Trump.jpgThere’s a winter storm warning in effect till 6 tonight, the temperature is in the 30s, and specks of snow keep floating across the sky. The mid-February sun is stuck behind the clouds, the grass is washed-out brown, and every now and then, it starts to sprinkle. A handful of golfers still brave the elements, teeing off along the shore of Lake Norman, but one of them is not Donald Trump, which is too bad because he’s a terrific player. Last time he was here, a member, reputed to be scratch, challenged him. Trump came home in 2-under 70 using a set of rented TaylorMade clubs. “I’m a golfer, I’ve won many club championships,” he says. “I know a lot about golf. What’s your course? Quail Hollow? This is a better course than Quail Hollow. I know Quail Hollow. This is a superior course.” Quail Hollow Club in Charlotte, by the way, will host the 2017 PGA Championship, one of golf’s four major tournaments.

Trump had flown into Charlotte Douglas International Airport from Palm Beach, Fla., in his private Boeing 757 to speak at a convention at Time Warner Cable Arena. The event was held by ACN Inc., a Concord company that has been accused of being a pyramid scheme. Trump has endorsed it for years, twice featuring it on The Apprentice, the reality television show he hosts on NBC, and his appearance at the arena attracted a local TV station and The Charlotte Observer. But after espousing entrepreneurship to the nearly sold-out crowd, he turned his attention to the Mooresville country club he bought a year ago, telling the newspaper, “It’s got to be one of the hottest places around. I think we have the best golf club in North Carolina. I don’t think there’s anything as good.”

A year ago, members sold The Point Lake and Golf Club to New York-based The Trump Organization Inc., which promised to pour millions into renovations and improvements. The overhaul is still under way, so after the conference, he jumped into a black limousine and headed north to tour its progress. The Trump that arrives is not the controversy-courting scrapper who called comedienne Rosie O’Donnell “trash,” labeled NBC news anchor Brian Williams a “dummy” on Twitter and placed a $5 million bounty on Barack Obama’s “real” origins. He looks like the same guy, with bright skin, dark suit and iconic ginger coiffure, but this Trump poses for pictures with kids (“Take care of your mommy, sweetheart”), raves about the handsomeness of just about everyone he meets and, after a moment’s hesitation, flashes a sorority hand sign at the behest of a brunette East Tennessee State University coed. “My sisters don’t believe you’re here,” she says, brandishing a smartphone camera as Trump fashions his fingers into a triangle.

Still, he’s constantly taking stock of the place. “What do people think of the locker room?” One of his seven-person entourage says they love it. “Who did the stonework here?” Someone tells him he has an interview to do, but Trump wants to see the clock — black, at least 20 feet tall, with gilded lion heads at its four corners — recently installed behind the 18th green. “This was an empty little courtyard, and now it has a clock. I won’t even tell you how much it cost me. Over a couple hundred thousand dollars. It comes from Massachusetts. It’s the oldest clockmaker in the country. Just fantastic people.” His company is investing more than $10 million in the club, but the most important addition is Donald Trump. “If someone else came in and did all of the improvements I’m doing, it would be positive, but nobody would know about it.”

The Point was designed to resemble a Nantucket village, so its center is not a traditional clubhouse but a collection of wood-sided buildings around a cobblestone square. “You know, I am buying a town. They have a bakery, a delicatessen.” That delicatessen now sells Trump chardonnay, sauvignon blanc and “simply red” for about $15 a bottle; Trump dark and milk chocolates; Trump Ice bottled water; Trump coffee mugs and tumblers; and How to Get Rich, written by Donald J. Trump. The club itself has been rechristened Trump National Golf Club, Charlotte.

If such eponymy seems self-serving, that’s because it is. But the Trump brand is worth millions — he claims billions — and it should serve the members of Trump National as well as its owner. “Trump has an image that is both serious and an image that is silly,” says Sheri Bridges, a marketing professor at Wake Forest University in Winston-Salem. “The Donald and the hair and the mouth, some of the utterances he makes. He’s a birther, he’s going to save the United States by running for president. I think those are the silly side of the Donald Trump brand. But people, either grudgingly or not, admit he stands for the good life. His steaks, his vodka, his clothing line, his ownership of the Miss Universe — and therefore the Miss USA — contest. He has achieved what many people in the U.S. would consider uber-success. He can do just about anything in the world he wants to. The serious side is: If he’s going to build a golf course, it’s going to be a golf course for discriminating golfers.”

https://asoft10294.accrisoft.com/businessnc/clientuploads/Archive_Images/2013/04/Trump2.jpgTrump did not build The Point; that was Crescent Resources Inc. The development arm of Charlotte-based Duke Energy Corp. had created The Peninsula Club, a 900-lot golf community on Lake Norman in Cornelius, in the early 1990s and wanted to reproduce its success on lakefront property it owned in Mooresville. But the city refused to extend water and sewer lines to the roughly 1,200 acres. Crescent moved ahead with the project anyway, only with larger lots to accommodate septic systems, reducing the planned 2,200-lot community to about 900, and began hawking them in September 1998. It promised much — including a 50-seat movie theater, aerobics room, fitness center, tennis courts and a course designed by professional golfer Greg Norman — and marketed the development as the last chance to build a golf-course home on Lake Norman. Crescent sold 71 lots in four hours. The Peninsula had never sold more than 66 in a year. A full golf membership cost $25,000, but the price escalated every 25 members. Eighty-eight people camped out in cars the night before they went on sale.

Ed Sentivany and his wife moved to The Point in 2007. A partner in a real-estate financing firm, he had lived near Boston the previous 15 or so years but had little desire to ride out another downturn in the market. His son, who lived near Winston-Salem at the time, suggested they retire to The Point so they could be closer to their grandchildren. The Nantucket architecture struck a chord with the New Englanders, and they bought a house in one of its “villages” named Aberdeen, the same neighborhood PGA Tour player Martin Laird calls home. After a bout with boredom, Sentivany took up golf, joined the local volunteer fire department and was elected to the community’s property-owners association.

About the time Sentivany made his move, the housing crisis began crushing Crescent. It declared Chapter 11 bankruptcy in 2009. Scheduled to transfer ownership of The Point to its members on Dec. 31, 2011 — a standard practice that allows developers to exit a community after selling off the lots — the sale price would be determined by a formula that included the club’s financials. Sentivany believes Crescent pressured the company that was managing the course to increase profitability. “They thought one way to bring more money to the bottom line almost immediately was to eliminate all benefits for all employees.” Morale among staff and, consequently, members, cratered. The quality of the food served at the tavern deteriorated. “I wouldn’t have brought a client to the club before,” member David Willner says. “No way, no how. I’d rather take them to Chili’s. It was garbage.” Many of the buildings needed routine upkeep, but Crescent — which did not respond to interview requests for this article — wasn’t willing to loosen its purse strings for anything that wasn’t essential. “We were all hoping we could just get to the point where the members would take over the club,” Sentivany says. Before that point arrived, members and Crescent were approached by third parties interested in buying the club. None were very appealing. Someone requested permission to ask Trump if he had interest. “And he did, and they did,” Sentivany says.

Though known for building casinos and skyscrapers, The Trump Organization has accumulated a portfolio of 13 golf clubs and resorts over the past two decades. It has been on a particularly dizzying shopping spree in recent years. Despite the recession — or because the recession landed many in financial distress — the company has acquired or built nine clubs or resorts since 2008, including buying Doral Resort & Spa in Miami out of bankruptcy last year for $150 million. “We have a very nice balance sheet,” says Eric Trump, Donald’s 29-year-old son. “We’ve done very well as a company. We’re very, very underleveraged, and it’s nice to be able to see an asset you love and go in there and close on it very quickly.” It was Eric, executive vice president of development and acquisitions of The Trump Organization, who would spearhead the Mooresville deal. “The only thing we care about is having the best courses. When I saw The Point, it’s a spectacular piece of land. It’s rare that you get that much water on any course, and one that we knew, with the right capital investment, could be beyond exceptional.” The enthusiasm among members was not mutual, at least not completely.

The Trump Organization began talking with the club and Crescent around March 2010. By September 2011, the Advisory Board of Governors, some of whom had visited Trump’s golf courses, recommended selling the club to the developer rather than remaining member-owned. However, The Trump Organization walked away three months later. “There’s a lot of confusion at the club, a lack of direction,” Eric told The Observer that December. “It’s a great asset, and with a lot of capital could have been terrific. But we don’t want to get bogged down with a deal that has a lot of different parties all moving in different directions at the same time.” The membership had several concerns about hopping into bed with the Trumps. “What might Trump do down the road fast-forward five years from now? Ten years from now?” Sentivany remembers. “Would Trump sell the facility? Would it be simply packaged with other courses and be sold to some third party, and now we have no control over what goes on around us?” Some criticized the board and developer as being tight-lipped about Trump’s plans for the club. Others just didn’t like the Trumps. The discord fractured the community. One post on a pro-Trump website created in February of last year read: “We have had neighbors fighting neighbors, friendships ruined, outright lies being spread daily, even people discussing our private business with the newspaper!” The site pleaded with opponents to acquiesce to Trump. “The sheer amount of deception and vitriol has been deeply disappointing.”

The Trumps were back at the negotiating table by March. Proponents and the opposition passed out pamphlets before a meeting at the clubhouse where the elder Trump was scheduled to outline his plans for The Point to members. Some distributed “Yes to Trump” hats. “I was watching people decorate golf carts that had ‘Here’s to Trump’ signs on them, that had balloons. They had air horns, and they were going around their neighborhood chanting ‘Trump’ because they wanted the deal so badly,” Eric says. “For me, you know, I’m a humble guy, it was beyond a great honor to see that.” Sheriff’s deputies stood guard.

The elder Trump promised that every square inch of the club would be upgraded. For example, the course would be lengthened. Buildings on the club’s square would be painted “Augusta white,” though some members raised their eyebrows at that, preferring Nantucket gray. Nevertheless, members approved his acquisition of the club later that month. Eric says 95% of the members were for the deal, though Sentivany puts it closer to 70%. Both agree it passed because Trump could do better for The Point than the members could. The company paid $3 million — $2 million less than members had paid Crescent. Sentivany points to the investments Trump has made in his other courses, from the $1 billion resort he built in Aberdeen, Scotland, to the $200 million he plans to sink into Doral. “Everyone is looking to the Trumps to further its brand by buying additional courses and being careful about their acquisitions, because they are sensitive to maintaining that brand and don’t want to do anything that would not be keeping with that objective.”

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After inspecting the clock, Trump turns his attention to the photographs. They are standard golf-course art: black-and-white pictures of legendary players such as Patty Berg and Ben Hogan. They had been delivered at some point over the last year but sat in the general manager’s office until they were leaned against the wall of a hallway in anticipation of Trump’s visit — he wouldn’t permit anyone else to pick where they will hang. He ends up putting Bobby Jones circa 1935 next to the men’s room, Nancy Lopez next to the women’s and a breakdown of Jack Nicklaus’ swing across the hall. Before sitting down for lunch in the dining room, he escorts a local TV reporter into the tavern, which has been open about a month after its renovation. “What do you think?” he asks. Its refurbishment included refinishing the floors and new chairs — “the finest club chairs you can buy,” he says — and tables dressed with placemats of black leather that bear the Trump National logo in gold. A fire crackles, and piano notes trickle out of unseen speakers. A bay window overlooks the 18th green and the new clock. Chandeliers, installed less than 24 hours earlier, sparkle above them. She says it’s beautiful, and he agrees. “Turned out well, huh?” His only qualm is the new TV. “We could’ve gone bigger, but that’s OK.”

Much of the renovation has been skin-deep, such as the photos and the Augusta-white paint job, but the Trumps have also been invasive. The course is getting a $3 million update that will include new greens, tee boxes and bunkers. They doubled the size of the practice area and are redoing the golf-cart paths. Trees have been cleared away to create better views of Lake Norman. His company will spend at least $10 million more on infrastructure, including renovation of the dining room, which is in the same building as the tavern. “We’ve been sold out Thursday through Sunday. Wait list to get in,” director of golf Jay Mull says. “Before, you could’ve shot a gun off in here and not hit anybody.” Mull wanted to install a golf-fitness center. He wrote a business plan for it, and Trump cut a $50,000 check. If the members owned the club, an employee says, they would still be debating it. “He is absolutely living up to his commitment to make this a first-rate facility,” Sentivany says. That’s because it’s in his best interest to do so.

Trump’s power comes from his brand; it’s what has allowed him to seamlessly branch into alcohol, fashion, TV and modeling. Forbes magazine, which puts his net worth at $3.2 billion, valued that brand at about $200 million in 2011. Trump’s response to the writer of the story? “You’re ridiculous. That number’s ridiculous; you’re way off.” He has placed it between $3 billion and $6 billion. A practical example of its worth came in 2010, when investor Carl Icahn fought a group that included Trump for control of bankrupt Trump Entertainment Resorts Inc., the owner of three Atlantic City casinos. The judge sided with Trump, in part, because his name added millions of dollars of value to the company. If Trump National in Mooresville suffers under his stewardship, so will the premium Trump’s name commands. “He’s working very hard to become a lifestyle brand — as long as each one of those products reflects the other in terms of quality and consumer experience,” Bridges of Wake Forest says. “The first time you pop the cork on a bottle of Trump wine and you think, ‘Geez, this tastes like Ripple,’ you’re going to say, ‘Wow, Trump’s blown it on this one. He’s coming down.’”

Being a part of that brand isn’t cheap. It now costs more than $75,000 to join Trump National in Mooresville. “We’ll go well beyond that in coming years,” Eric says. “I think that’s very nice for the members. It creates a great sense of exclusivity.” However, maybe more important is the bump in monthly revenue The Trump Organization has created. According to the membership agreement with Crescent, four people had to join before a member could resign. Members who had moved to other states were still tethered to The Point. Trump allowed those who wanted out to leave. He also permitted any existing member to upgrade their membership (golf is the most expensive and gives a family the run of the club) for no charge except for the more costly monthly dues. “I think the Trumps, being the smart businesspeople that they are, were very creative on how to create more cash flow,” Sentivany says. “That’s what they get out of the club as their return on investment.” The club has accepted only 12 new ones, but about a quarter of the roughly 1,100 members upgraded to golf, which is about $575 a month.

The threatening winter storm, however, has driven most of the membership back to their villages by the time Trump exits the locker room, still wearing the suit but having donned white golf shoes in anticipation of touring the course renovations, which are expected to be completed later this year. The Point was never rated particularly high on the North Carolina Golf Panel’s annual ranking of the top 100 courses in the state, and Trump National makes its debut at No. 92 this year — up from 97 the year before. Trump backs off from his earlier claim that it will be the best Tar Heel track. Still, he thinks his investment and brand are enough to make it “the greatest course in Charlotte by far.”

“I think it went from a great course in a great location that nobody knew about to an even greater course because of what we’re doing.” Unfortunately, he won’t get to see what his company has done. Not today, anyway. At about the same moment he leaves the pro shop to show the TV reporter the new driving range, a curtain of snow begins to fall. Nearly 3 inches of frosting soon will envelop the grounds, and the two golf carts are forced to retreat. There, next to more Trump-authored books, he shows off the red hats with the Trump National crest on them — the same kind he wears when he plays. “Give this to your boyfriend.” He plants a goodbye kiss on her cheek. “There, that’s the money shot. You heard Trump is crazy. There’s the proof.”