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Miami Herald

Trump Card

By: Douglas Hanks III
Published: 2/2/2002Source: Miami Herald
When Michael Dezer opens his new hotel on Sunny Isles Beach next year, it will carry Donald Trump's name. Notably absent, though, will be any of Trump's money. In fact, Dezer is paying Trump millions of dollars for the privilege of letting the celebrity developer scramble Dezer's plans for his erstwhile 11-acre Ocean Grande project and rechristen it the Trump Grande Ocean Resort. Two more Dezer buildings will follow the 32-story Trump International hotel scheduled to open in December 2003. A 55-story condo tower - once the modestly named Residences at Ocean Grande - will break ground as the Trump Palace. Its sister condo complex, the Trump Royale, will sit next door. At 550 feet, the pair of fin-roofed towers would stand taller than any oceanfront building on the East Coast, local developers said. All of this is slated to happen without Trump investing a dollar. In December, Trump signed a licensing agreement with Dezer that allows the longtime proprietor of Miami Beach's cut-rate Dezerland hotel to appropriate the Trump glitz for his $400-a-night Sunny Isles project. ``They're putting in the capital, and they're putting in the site. Which is OK with me,'' Trump said during a break from this week's celebrity golf tournament in Pebble Beach, Calif. ``There's no risk other than it's very important for me to have success.'' The Dezer deal reflects Trump's recent move from star developer to franchise. Though the billionaire earned fame and fortune buying land and assembling development deals for Manhattan high rises and Atlantic City casinos, the Sunny Isles Beach project is the first in the country to carry his imprimatur alone. ``I saw that Trump was a better name than Dezer. The Trump name is magic,'' said the 60-year-old Dezer, who is best known for the convertibles and hot rods doubling as booths and tables in his 1950s-themed hotel on Miami Beach.

Trump said he signed his first licensing agreement with a group of South Korean investors three years ago for a pair of towers in Seoul, and has reached a similar deal with Ritz-Carlton for a hotel in Toronto. In exchange for lending his name to the Dezer project, Trump receives a licensing fee that a source close to the project said is ``in the ballpark'' of $4 million. Trump also will collect an undisclosed share of the profits. In addition, Trump is reshaping the Dezer plan to fit his flashy vision of luxurious living. Trump's staff has already scrapped old drawings for the Palace's lobby, jazzing it up with a pair of billboard-sized aquariums. Trump ordered all ceiling heights up 12 inches to 10 feet, a Trump signature. While the Dezers figured the televisions would be fine sitting out, the Trump people insisted cherry-stained armoires dominate the rooms. ``His people come down here every two weeks,'' said Gil Dezer, Michael's 26-year-old son and developer of the project. ``Every decision I make has to go before [them] for approval.'' The decor upgrades, royalties and licensing deal have increased costs on the $495 million project, but the Dezers are convinced the Trump cachet will ultimately lift profits, too. They raised sale prices on their condos once Trump signed on (the hotel is being financed as a condominium, with individual investors owning the units) and say they have fielded calls from star athletes and entertainers suddenly interested in Sunny Isles Beach.

Trump definitely increases the value of a real estate project, though his name isn't gold in all markets, said Barbara Corcoran, a leading broker in New York. In 1996, a group of Manhattan investors considering a Trump deal asked her to evaluate the pros and cons of using the Trump name. Corcoran estimated the market value for the hotel and condominium tower would increase 18 percent with Trump's name on it. Trump, who rebounded from near-bankruptcy in the early 1990s and flirted with a presidential run in the last election, has particular appeal with international buyers looking for status in the United States, she said. ``Overseas, the Trump name means glamour and New York,'' Corcoran said. But the man known for his stunning girlfriends and abundant self-esteem also can be a turn-off. ``There is a touch of gaudiness that is attached to the name,'' Corcoran said. ``You can't pretend to be old money in a Trump building.''

Trump said it was the Dezer holdings in Sunny Isles Beach that sold him on the project. The Trump complex will front a 1,000 foot stretch of beach, about a fourth of Dezer's land there. Though not contiguous, the parcels comprise 27 acres and amount to one of the largest beach portfolios in the area, developers said. Michael Dezer, the immigrant son of an Israeli bus driver, made a fortune renovating small New York office and apartment buildings. Six years ago he started snatching up $110 million worth of oceanfront motels in Sunny Isles Beachbefore other developers saw much potential there. Now there are more than a half-dozen rival towers, including the planned $300 million Acqualina resort. Though he owns the opulent Mar-a-Lago golf club in Palm Beach, Trump has long sought a South Florida high-rise to call his own. He once offered a similar licensing deal to the Continuum condominium on South Beach, but the developers turned him down, three sources who worked on the Continuum project said. The Dezer project will be his first here. The deal seemed irresistible to Michael Dezer, but his son wasn't so sure. Gil argued that draping their project in Trump's name would diminish the family's accomplishment. He worried about people whispering, ``Oh, Trump made them.'' But his father convinced him the Trump name would let the project shine far brighter than if it only bore the Dezer name. Now, Gil figures the partnership itself seems impressive enough. ``We brought Donald Trump to Miami,'' Gil said, his eyes growing wide. ``Do you understand how big that is?''