The house that Trump built. Russian billionaire nearly lost millions in a deal with future US President
Billionaire Dmitry Rybolovlev managed to get back the money paid to Donald Trump. In 2008, the oligarch purchased an estate from the future US President for $95 million and recouped the invested funds only ten years later. To do so, he had to demolish the most expensive private mansion in the USA and sell the land in pieces. The successful sale of Maison de L'Amitie is currently presented as a proof that there was no ‘Russian trace' in the American presidential elections, and the deal with Rybolovlev was not a disguised bribe to the presidential candidate. However, new owners of the three parcels of the Trump's former estate remain unknown.
Since the victory of Donald Trump on the presidential elections, American politicians and journalists have been keeping a close eye on the property sold by the future President to Russian billionaire Dmitry Rybolovlev. The history of the estate and all deals involving it are considered either evidence of the ‘Russian trace’ in the presidential elections or refutation of the ‘conspiracy theory’.
The mansion in Palm Beach, Florida, overlooking the Atlantic Ocean was built by Abraham Gosman, a Massachusetts nursing home and health care magnate. In 1998, he bought a large waterfront lot with a private beach and erected a deluxe home entitled Maison de L'Amitie. Its living space was 66 thousand square feet, while the total area of all structures – 80 thousand square feet. But after his business faltered and his debts piled up from lavish spending, Mr. Gosman filed for Chapter 7 bankruptcy liquidation in 2003. In 2004, as part of the bankruptcy, the property went up for auction.
The future President of the USA won the action by offering $41.35 million for the estate and told Palm Beach Daily News about his plans to make it the second largest home in America after his home in Mar-a-Lago.
Two years after the purchase, Trump said that he had "gutted the house" and made $25 million in extensive renovations. However, later, during the examination of the demolition application, the Palm Beach architectural commission found out that no major improvements were made. Trump had the main house's interior "remodeled, updating with a new kitchen and dividing a large room to create additional bedrooms and bathrooms," along with "some minor interior alterations of doors, frames, and windows."
In 2006, Trump offered the renovated estate for sale at an astonishing price of $125 million. The advertisement had emphasized the luxury interiors of the mansion, including bathrooms decorated with 25-karat gold; mahogany doors; oak, marble, granite, and onyx floors; a winter garden over 4000 square feet in size; and bulletproof windows able to withstand any hurricane. However, no one was interested in the luxury property for a long time – and Trump had to reduce the price – initially, to $120 million and then to $100 million.
But experts still believed that the estate was overpriced. To attract buyers, Trump invited Jose Lambiet, the publisher and columnist of local news source Gossip Extra and gave him a tour around the property. After visiting it, Lambiet said that he had visited many homes of wealthy owners with more money than taste, but he considered the Maison de l'Amitie in a class by itself. "It was just terrible looking, really gaudy, – he said. – Nothing fit together – it was sort of haphazard inside". The reporter did not appreciate the renovations performed by Trump. "I'd been in the house before, at one of Gosman's charity parties, and Trump had hardly changed anything, just put on a couple of coats of paint," – Lambiet said. "Even that – well, he told us the fixtures in one of the bathrooms were gold, but as he walked away, I scratched a faucet with my fingernails, and it was just gold-covered paint". And when Trump pointed out hurricane windows, which he also claimed were bulletproof, Lambiet found them suspiciously thin. Overall, the columnist agreed with many other real estate experts that Trump won't be able to sell Maison de l'Amitie at a price close to the asking one. Even $100 million were considered too much for it.
But in 2008, shortly before the real estate crisis in America, oligarch Dmitry Rybolovlev purchased Maison de l'Amitie for a record-breaking amount of $95 million. The Russian billionaire acquired a home in the French style of the Regency epoch featuring 18 bedrooms, 22 bathrooms, a spacious banquet hall, a ballroom for 100 guests, an art gallery, a concert hall, a 100-feet swimming pool, a tennis court, and underground parking able to accommodate dozens of cars.
Dmitry Rybolovlev was born in 1966 in Perm. In 1990, graduated from the department of general medicine of the Perm Medical Institute. During the university days, has founded, jointly with his father teaching in the same institute, Magnetix company specializing in the treatment of cardiovascular diseases with magnetotherapy. In 1992, received a stock broker's license and founded Finansovy Dom (Financial House) Investment Company. In two years, acquired a large portfolio of shares in Uralkali at voucher auctions. In 1994, took charge of Credit FB Bank. By 2000, acquired 63% of shares in Uralkali; was the Chairman of its Board of Directors up until 2011. In 2010–2011, sold his portfolio in Uralkali to Suleyman Kerimov, Filaret Gal'chev, and Aleksander Nesis for more than $5 billion. Left Russia in the mid-1990s and lived in Switzerland for a long time. In 2011, relocated to Monaco, purchased AS Monaco FC by investing $200 million, and became its President. In 2019, Forbes estimated the wealth of Rybolovlev at $6.8 billion and ranked him the 17th most prosperous Russian businessman. Owns a number of properties all over the world, including a mansion in Hawaii earlier belonging to actor Will Smith and worth £18 million and Scorpios island in the Ionian Sea where former First Lady of the United States Jacqueline Kennedy had married magnate Aristotle Onassis. Divorced, has two daughters: Ekaterina and Anna.
After the closure of the deal, Rybolovlev said he has bought the property as an investment. “This acquisition is simply an investment, – he said in a statement. – It does not represent a decision by me to live in the US”. But according to a person close to Rybolovlev and aware of his family affairs, the new owner was cunning: the estate was supposed to become his family residence. But shortly after the purchase of Maison de l'Amitie, Elena Rybolovleva, his wife since 1987, has filed for divorce – and the new asset was frozen as per her request. Elena demanded half the value of Maison de L’Amitie, which she accused Dmitry of buying with a trust to keep it from her. The estate in Palm Beach stayed empty for the entire duration of their divorce.
The court ruled that Elena Rybolovleva is entitled to get almost $4.8 billion from her ex-husband – more than any other divorced wife in the world. However, Rybolovlev appealed that verdict, and the Swiss court reduced the settlement to $604 million. As a compensation, Elena got two deluxe villas in Geneva suburbs and custody over their younger daughter.
Elena and Dmitry Rybolovlev
The high-profile divorce with the former Uralkali owner after 24 years of marriage enabled Elena Rybolovleva to enter the Forbes rating of wealthiest people on the planet. Daily Mail wrote that the billionaire has called the devastating divorce a "hammer blow" to his fortune.
The court left the estate in Florida to Rybolovlev. After the divorce, the billionaire decided to get rid of the ‘family nest’ where he hadn’t spent a single day. Real estate advisors were doubtful whether anyone would be willing to buy Maison de L’Amitie. Therefore, in 2013, the oligarch decided to tear down the home purchased from Donald Trump. According to Daily Mail, the main reason behind this decision was black mold.
It took three years to obtain a demolition permit from the Palm Beach architectural commission. The application was approved only in 2016. Four commission members supported the demolition, while three others had opposed it because several buildings of the estate had historical value.
In 2016, Rybolovlev has torn down the most expensive private home in America and divided the lot into three parcels. The first two parcels were sold relatively quickly for $34.4 and $37 million. Interestingly, both purchasers were dummy legal entities, and their owners were unknown. Legal documents associated with the sales listed only the names of holding companies. Even Palm Beach real estate agents were unable to identify the buyers.
The third lot was put up for sale in 2016, after the election of Donald Trump the President of the USA. It was more difficult to sell it because the deal between the Russian oligarch and future President was under investigation in that period. Political opponents of Trump asked how could he buy an estate for $41.35 and then sell it for a sum twice as high right before the crisis? For more than ten years, the amount paid by Rybolovlev to Trump was record-breaking for Palm Beach. Real estate experts concluded that the buyer had – for some unknown reason – significantly overpaid for Maison de L’Amitie and won’t be able to get back the money invested into it. Five years after the sale, Palm Beach County appraised the property for just $59.8 million.
Due to the supposed ties between Trump and Russia and possible interference of Russia into the presidential elections in the USA, the suspicious deal was interpreted as a money laundering operation or disguised bribery. Many American media outlets emphasized that the Russian billionaire had paid to Trump a tremendous amount of money for a home where he initially was unwilling to live and then decided to demolish. Senator Ron Wyden requested the US Department of the Treasury to investigate the deal between Trump and Rybolovlev. The Senator noted that, when Trump sold Maison de L'Amitie, he was having trouble finding a bank that would lend him money. The sale was also made months before Trump Entertainment Resorts, which owned and operated Atlantic City hotels and casinos, declared bankruptcy.
Trump had to provide explanations. The US President said that renovations done with the home had increased its value and enabled him to turn a handsome profit. Both Trump and Rybolovlev claim that they had neither met in person nor have any ties, while the deal was made via intermediaries. However, these explanations were considered unconvincing, and a probe was launched.
In April 2019, the report of Robert Mueller, Special Counsel for the US Department of Justice, who had investigated for two years possible ties between Trump and Russia, was published. The probe involved 40 FBI agents and 19 lawyers. The investigation team concluded that there was no conspiracy or coordination between Donald Trump's presidential campaign and Russia; the sale of Maison de L’Amitie was an ordinary commercial deal; while the high price of the property was explained by a caprice of the Russian oligarch.
Only after that, Rybolovlev has found a buyer for the third parcel. In early June, it was sold for $37.3 million – $4.7 million below the asking prices. Still, the Russian businessman made some profit on the deal with Trump: he sold the estate $13.6 million higher than its original purchase price back in 2008.
Angela Koch, a Palm Beach real estate broker, suggested that one person would buy all three parcels of land and keep it as one estate with a private beach not far from the city center. Senator Wyden said that he wants to know the identities of the buyers. However, Dmitry Chechkin, a representative of Rybolovlev, declined to provide any comments and only confirmed that the deal has closed. In the meantime, Forbes magazine published a comment provided by a person close to the Rybolovlev family: the sale of the third parcel is yet another proof that the deal with Maison de L’Amitie had never involved politics, while the successful sale of the entire estate tears the ‘conspiracy theory’ into pieces.