It has been 20 years since the Trump Ocean Resort Baja Mexico was first announced, and just over 10 years since the dust settled on the myriad lawsuits that the ultimately failed project produced. In hindsight, it’s easy to trace the souring of Donald Trump on Mexico in the wake of this disappointment. Following the debacle in Baja California, he invested in two other failed projects in the country, famously declaring in 2015: “Don’t do business with Mexico!”
By that time, he was already floating the idea of building a wall between the U.S. and Mexico as he transitioned from real estate and reality television to run for the U.S. presidency.
The Trump Ocean Resort Baja Mexico
Today, the site of what was to be the Trump Ocean Resort Baja Mexico is nothing but mud, literally and figuratively. However, in October 2006, when plans for the 526-unit luxury condo-hotel at Punta Bandera, south of Tijuana, were officially announced, Trump had nothing but good things to say about Mexico and the project, which would include three 25-story towers on 17 oceanfront acres, with luxe amenities such as concierge service for owners, a fine-dining restaurant, multiple swimming pools, and a fitness center and tennis courts. According to Trump, the property would “redefine the standard of premier property ownership and service excellence for all of Northern Mexico.”
In a promotional video made to entice buyers, Trump added, “One of the things I most love about this project is that it’s in Baja, Mexico, and Baja is one of the really hot places. Baja right now is where Cabo was 10 years ago, and you know what happened to Cabo.”
Thanks largely to the Trump name and a lavish event held to promote the project in San Diego, buyers were successfully enticed. Condos at Trump Ocean Resort Baja were listed at prices ranging from US $250,000 to up to $3 million for larger units, and over 32 million dollars in deposits were taken, with depositors given promises that the build-out of the property would take three to four years.
Construction did begin, barely, with a hole dug for a foundation and a billboard erected showing Trump’s face and the slogan, “Owning here is just the beginning.” But the project was abandoned in 2009 after the developers failed to secure a construction loan from German bank WestLB. That, not coincidentally, was the same year the first lawsuits were filed.
Lawsuits and litigation
Prospective buyers had been under the impression that the developers of Trump Ocean Resort Baja Mexico were Trump and the Los Angeles-based real estate agency Irongate. However, once lawsuits were filed, it was revealed that Trump had only licensed his name for the project, pocketing a reported US $500,000 for his branding and promotional efforts.
Buyers, and their lawyers, felt it had gone much farther than that, and that Trump’s role had been fraudulently misrepresented. Nearly 200 were listed on the class-action lawsuit that finally led to a US $7.25 million settlement by Irongate in a Los Angeles court in 2012, with Daniel King, attorney for the plaintiffs, noting that every one of his clients “was led to believe that ‘Trump’ was the developer of the project.”
Trump, whose own culpability in the Trump Ocean Resort Baja Mexico’s collapse would continue to drag on in court for another year, had also turned on Irongate, blaming the company’s Jason Grosfeld and Adam Fisher for the failure in a separate 2009 lawsuit.
The 2008 worldwide financial crisis that decimated housing markets has often been listed as a leading cause for Trump Ocean Resort Baja Mexico’s failure, but claims by a former member of Mexico’s Chamber of Deputies, Jaime Martínez Veloz, that the project lacked proper permits could have doomed it as well. Martínez Veloz filed yet another lawsuit in Mexico in 2016, this one claiming Trump committed tax fraud, later adding failure to obtain proper permits to the complaint.
More financial woe in Mexico for Trump
The Trump Ocean Resort Baja Mexico became a huge embarrassment for its namesake, both personally and financially (Trump finally settled in court for an undisclosed amount in 2013). It was his first, but hardly his last, business fiasco in Mexico.
In 2007, a year after the Baja California project was announced, Trump attempted to develop the Punta Arrecifes Resort, a luxury complex in Cozumel that would have included a hotel, marina, golf course and private airstrip, but the project was scuttled by environmental pushback. There were also rumors that a local politician had asked for a sizable bribe to approve permits.
Also in 2007, Trump, then the co-owner of the Miss Universe organization of pageants with NBCUniversal, which broadcast them, decided to bring the Miss Universe pageant to Mexico City. To do so, he signed deals with Mexican businessmen Pedro Rodríguez and Rodolfo Rosas Moya to cover the costs of the event, with the latter putting up some properties in Playa del Carmen as collateral.
There are conflicting reports about whether the pageant was profitable or not, but Trump claimed it wasn’t and that he was owed US $12 million. So he filed suit to seize the property Rosas Moya had put up as collateral. However, despite years of legal wrangling in the U.S. and Mexico, he recouped nothing, leading to a famous series of tweets by the future president in February and March 2015 in which he claimed, “Because of Rodolfo Rosas Moya, who owes me lots of money, Mexico will never again host the Miss Universe Pageant,” and “Mexico’s court system corrupt. I want nothing to do with Mexico other than to build an impenetrable WALL and stop them from ripping off U.S.”
Trump’s revenge
Viewed in the light of these business dealings, all of Trump’s subsequent provocations against Mexico after he was elected president, from deportations and the border wall to tariffs and taxes on remittances and pressure to capture cartel leaders, can be read as retribution for the stinging setbacks he suffered — first in Baja California, and later in other areas of the country.
Chris Sands is a writer and editor for Mexico News Daily, and the former Cabo San Lucas local expert for the USA Today travel website 10 Best and writer of Fodor’s Los Cabos travel guidebook. He’s a contributor to numerous websites and publications, including The San Diego Union-Tribune, Marriott Bonvoy Traveler, Forbes Travel Guide, Porthole Cruise and Travel, and Cabo Living.
