The owners of a massive luxury hotel in Panama are trying to strip Donald Trump’s name from the property and fire its management.
The Trump International Hotel & Tower Panama once paid at least $32 million to use the brand, but majority owners Ithaca Capital Partners now appear to feel that’s more of a hindrance than a help.
But their move to erase Trump’s name from the property will be fought by The Trump Organization, which it says is a contract violation.
Donald Trump’s name may be stripped from the Trump International Hotel (third building from left, in 2011) after new owners said they felt his name was putting off business
A Florida investment group bought up 202 unsold condo units at the hotel, which was built in 2011. It now wants to drop Trump, but the Trump Organization said that’s a contract violation
Located on Panama City’s waterfront, the Trump hotel is within a 70-story tower in the shape of a wind-filled sail – a design similar to that of Dubai’s Burj Al Arab, which precedes it by around 20 years.
Despite lavish amenities – visitors can sip drinks next to a 65th-floor, edgeless pool that appears to float above the ocean – it has struggled with poor occupancy.
‘I bought there because I thought Trump’s name made it a safe investment,’ said Al Monstavicius, a retired Nevada doctor who owns a penthouse hotel unit in the 369-room condo hotel.
‘But Latinos are a real problem for him in Panama.’
That thought appears to be echoed by Ithaca, a Miami, Florida-based investment firm that bought up the property’s restaurants, conference center and 202 long-unsold condo units.
That gave them the majority of the hotel owners’ votes; the owners of the 167 other sold condos had previously lacked the voting power to challenge the management.
At the time of the purchase, Ithaca’s managing director, Orestes Fintiklis, said his firm looked forward to working with both the other unit owners and Trump’s management team.
But at an owners meeting in October Ithaca’s representatives proposed removing the Trump Organization’s directors from the hotel board.
They also proposed sending a notice of default to Trump, the first step in terminating the president’s relationship with the property.
That plan faces opposition from the Trump Organization, which has acknowledged the effort, but said the move was a contract violation.
The property (pictured) paid $32m so use Trump’s name but now Ithica Capital Partners wants to end that. It also wants to remove Trump Organization reps from the directors’ board
‘Not only do we have a valid, binding and enforceable long-term management agreement, but any suggestion that the hotel is not performing up to expectations is belied by the actual facts,’ it said in a statement.
Ithaca did not respond to emails last week and Monday, and there is no public listing for the company or its managing director.
No one voted against Ithaca’s proposal, according to three people who were present or voted by proxy.
‘They were given 30 days to cure,’ said Jeffrey Rabiea, a New York businessman who owns three units in the building.
It was unclear whether owners sent Trump a formal default notice.
Rabiea said Ithaca and the owners were already searching for a new hotel operator to run the property under a different brand.
Monstavicius, who said occupancy in his penthouse hotel suite has been running at only 30 percent in recent months, praised the move to oust Trump.
‘It can’t get any worse,’ said Monstavicius.
The uprising follows news that Trump was effectively being paid to end a similar management contract for the Trump Soho hotel in New York.
These revelations point to continued struggles for the Trump brand outside strongholds like Mar-a-Lago in Florida and the Trump Hotel in Washington, DC.
Both Rabiea and Monstavicius, along with another owner who spoke to AP on condition of anonymity over litigation concerns, said that their units were not profitable.
The occupancy rates were too low even to cover the cost of their units’ maintenance, the men said.
The Trump Organization says that ‘any suggestion that the hotel is not performing up to expectations is belied by the actual facts,’ but some condo owners disagree
Owners of apartments and hotel units at the Panama property have previously complained about problems with Trump’s management.
The Associated Press reported in October 2015 – when Trump was a candidate for president – that owners of apartments in the building had revolted over alleged mismanagement.
That saw them firing Trump’s manager from the building’s overall board of directors.
Trump responded with an arbitration demand for millions of dollars in damages, but the claim was ultimately settled and Trump remained manager of the hotel component of the tower.
His company at the time threatened to sue the AP over its coverage, saying the reporting had damaged Trump’s business interests.
No lawsuit was ever filed, and Trump never identified or alleged factual errors in AP’s coverage.
The termination would mark a new setback for the Trump family’s hotel business, which already lacked the scale of major international chains catering to business travelers.
The family announced two new hotel brands after the presidential election: Scion and American Idea.
It said it has already signed dozens of letters of intent with prospective licensees, but tangible progress in the form of permits and construction has been scarce.
Trump SoHo this week decided to pay at least $6 million to the Trump Organization in order to ditch his branding from the hotel