Toronto hotel’s new owner to pay millions to erase Trump name

Donald Trump may have won the presidency of the United States, but his brand equity seems to be falling in inverse proportion to his political fortunes. Now the name Trump will be removed from a high-rise hotel and condo development in downtown Toronto after the project's new owner, JCF Capital ULC reached a deal with Trump Hotels to buy out its management contracts for an undisclosed amount, which according to Bloomberg is in the millions of dollars.

Donald Trump's business will be the amount to release the owner of the Toronto complex from using his name.

President Trump never owned the project, but his company had signed a long-term branding and management deal with the building's developer, Talon International Development Inc, which defaulted on its construction loan last year.

JCF Capital ULC, a closely held US firm, earlier this year bought units in the 65-story Trump International Hotel & Tower that were not owned by individuals in a court-run sale. It reached a buyout deal to exit the contracts with the Trump Organization's hotel unit, the companies said Tuesday in a statement.

While no breakup fee was disclosed, the amount was at least $6 million, said Bloomberg citing a person with knowledge of the matter.

Signage may be removed from the 65-story tower as soon as 1 August, said the person, who asked not to be identified as he was discussing confidential details.

The hotel will likely be operated under Marriott International Inc's St. Regis brand, reports earlier this month said.

The agreement to remove the US president's brand marks the first step toward revamping the property, which has faced a history of construction delays and lawsuits. Most recently, it's been a site for protests against Trump's comments disparaging women, Mexicans and Muslims, even though his company has no ownership stake in the property.

JCF Capital acquired the tower with the Trump brand and agreements in place last year from former owner Talon International, the developer run by Russian-Canadian billionaire Alex Shnaider. Since then, JCF has been in talks with hotel chains and the Trump Organisation to complete an operating plan.

The tower was a tough sell under its Trump name: Talon struggled to sell the building after defaulting on its 2007 loan, and when JCF Capital acquired the loan on the property from lender Raiffeisen Bank International AG and launched a sale process for the building, it garnered no bids aside from its own.

The Trump brand, traditionally associated with luxurious properties in major cities and resort towns, is also undergoing change. A line of hotels called Scion aimed at younger customers was announced last year, and another, American Idea, was launched this month for smaller markets, with the first three planned for Mississippi.

While Trump has resigned from any roles in his companies, he has not divested his ownership stakes. His interests were placed in a trust overseen by an independent ethics officer and managed by Trump's sons Eric and Don Jr, along with Trump Organization chief financial officer Allen Weisselberg. The president is the beneficiary of that trust.