The size of Trump’s tax windfall was set by a 2016 appraisal that valued Seven Springs at $56.5 million — more than double the value assessed by the three Westchester county towns that each contained a piece of the property.
The valuation has now become a focal point of what could be one of the most consequential investigations facing President Trump as he heads into the election.
New York Attorney General Letitia James (D) is investigating whether the Trump Organization improperly inflated the value of Seven Springs as part of the conservation easement on the property, according to filings in the case in August. The investigation also scrutinizes valuations, tax burdens and conservation easements at Trump’s holdings in Los Angeles, Chicago and New York City.
Trump’s son Eric, who now helps run the Trump Organization, sat for a deposition in the case Monday.
The Seven Springs appraisal, obtained by The Washington Post, appears to have relied on unsupported assertions and misleading conclusions that boosted the value of Trump’s charitable gift — and his tax break, according to two independent appraisers who reviewed the document at The Post’s request.
The appraisal was written by Cushman & Wakefield, a commercial real estate firm that has worked with Trump over many years and whose New York City headquarters are in a building co-owned by Trump.
The firm established the value of the 212-acre estate by assuming a future buyer could build and sell 24 mansions on the land, without providing evidence that such a subdivision would meet local regulations. Over two decades, Trump himself tried and failed to build on Seven Springs — first a golf course and later various housing developments — but the projects were stymied amid local opposition and environmental disputes.
The appraisal also claimed the land preserved under the easement had no economic value of its own, which one independent appraiser described as “crazy.” The tax break is calculated by subtracting the value of the conserved property from the value when it could be developed.
“This is not a good appraisal, and it’s misleading, and it’s thin as all get out,” said the first independent appraiser, who spoke on the condition of anonymity to preserve relationships in the industry. “What you get is appraised values for these 24 hypothetical lots that appear to be much higher than they ought to be.”
If the conservation easement transaction was ever litigated, the appraiser said, “they’d tear it apart.”
A spokesman for Cushman & Wakefield said: “We do not comment on ongoing litigation.” One expert who reviewed the appraisal at The Post’s request said he thought the firm did a “competent” job.
The Trump Organization’s chief legal officer, Alan Garten, said that he could not comment on the Seven Springs appraisal or respond to specific allegations made by James’s office because the investigation is ongoing, but that “the allegations are categorically untrue.”
In a statement last month, Garten accused James of “continued harassment of the company as we approach the election.”
“This investigation is all about politics,” he added.
The president’s taxes and financial dealings are also part of a separate inquiry by Manhattan District Attorney Cyrus Vance Jr. (D). Vance has offered less detail in court documents than James, citing grand-jury secrecy. A three-judge panel in a federal appeals court Wednesday ruled that Vance can enforce a subpoena that seeks financial documents from Trump, including his tax returns.
In addition to the conservation easement tax break, Trump in 2014 also classified Seven Springs as an investment property rather than a personal residence, and wrote off $2.2 million in property taxes as a business expense, the New York Times recently reported.
Trump’s family members have described the home as a family retreat in the past, and the Trump Organization’s website still characterizes Seven Springs that way.
“Today, Seven Springs is used as a retreat for the Trump family,” the website says.
If it has been used as a rental property, it hasn’t brought much financial return, at least recently. On the public financial disclosures Trump is required to file annually as president, he said Seven Springs has produced only between $5,000 and $10,000 in total income since 2015.
Neither the James or Vance investigation may make much headway before the election, according to legal experts. But both appear to be issues the president and his family will have to deal with whether he wins in November or not.
Seven Springs, with its 60 rooms and three swimming pools, has become a prime example of how Trump found tax benefits even in projects where he failed to achieve his original vision.
The home was built in 1919 by Eugene Meyer, former owner of The Washington Post. The pink sandstone manor house was designed in the style of a French chateau, and it is perched over Byram Lake, a reservoir for the area. The property was eventually passed on to Yale University and then to Rockefeller University, which used it as a conference center.
Trump bought the property in 1995 for $7.5 million with the intention of transforming it into an exclusive private golf course, with a stately clubhouse and luxury residences nearby, according to Trump’s public statements at the time.
But Trump’s building plans never came to fruition.
His project met with stiff resistance from neighbors and local officials who worried about traffic problems as well as environmental degradation, according to planning documents obtained through a public records request and news coverage at the time. Many feared that chemicals from the golf course would pollute Byram Lake and taint drinking water for the nearby village of Mount Kisco. Trump also faced a complicated tangle of planning rules, as the property is spread over three neighboring towns: Bedford, North Castle and New Castle.
By 2004, the Trump Organization had given up on the golf course and instead proposed building 15 homes on the site, what Trump described to the New York Times at the time as “super-high-end residential, the likes of which has never been seen on the East Coast.”
But his subdivision plans also bogged down amid local opposition and a multiyear legal battle where Trump sued to gain access to a closed portion of a local road that ran through an adjacent Nature Conservancy preserve.
Even Trump’s personal lawyer Marc Kasowitz, who happened to live directly across the street from Seven Springs, at one point sent a letter to the Bedford planning director to voice concerns that headlights from the construction site would shine into the family home “where they frequently entertain.”
“Please note that their mail box has recently been knocked down on two separate occasions by speeding vehicles on Oregon Road,” an attorney at Kasowitz’s firm wrote on his behalf in the 2008 letter, obtained through a public records request.
Kasowitz did not respond to a request for comment.
In one bizarre episode from 2009, Trump rented out Seven Springs to the former Libyan dictator Moammar Gaddafi, who was in New York for the United Nations General Assembly. Gaddafi’s staff pitched a Bedouin-style tent, complete with camel-print drapery, in Trump’s yard.
But even tent-building was doomed at Seven Springs. Bedford officials issued a stop-work order — the tent was deemed a temporary residence, and it had no permits — and Gaddafi didn’t end up moving in.
“We are outraged that this known criminal would attempt to set up camp in our community, and we intend to do everything in our power to deny them temporary residence,” Bedford Town Supervisor Lee Roberts said at the time.
Gaddafi still “paid me a fortune,” Trump told CBS in 2016.
By the time Ralph Mastromonaco was hired by the Trump Organization to develop site plans for Seven Springs in 2010, the difficulties of building on the property were well established. Mastromonaco said he advised the Trump Organization to avoid attempting to build across all three towns but rather to limit the effort to one. The plans he drafted involved nine residential lots, all confined to the Bedford portion of the property.
“If you want to try to build something here, it’s quite a nightmare,” Mastromonaco, a civil engineer who has worked in Westchester since 1977, said in a recent interview.
This was Trump’s last attempt to build houses on the property. By May 2013, the Bedford planning board passed a resolution giving Trump’s company “final plat approval” to develop the residential lots — pending a list of 26 conditions that the Trump Organization would have to meet within 180 days. The Trump Organization did not complete that process, and those conditions were never met, according to Joel Sachs, the town attorney.
In particular, the Trump Organization failed to reimburse the town for the cost of hiring engineers and consultants to evaluate the Seven Springs proposal.
A copy of an invoice dated Nov. 11, 2019, reviewed by The Post shows the Trump Organization owes Bedford $46,976.63.
“They’ve never paid it,” Sachs said. “I don’t expect they’re going to pay it.”
Mastromonaco, who has given a deposition to New York prosecutors, said he did not know why the Trump Organization stopped pursuing the subdivision at Seven Springs.
“It started to look like they were just losing interest in it,” he said. “It just wasn’t a hot item for them to keep going.”
By the end of 2015, Trump had signed an agreement with the North American Land Trust, a nonprofit based in Pennsylvania, promising not to develop 158 acres of Seven Springs, or about three-quarters of the property.
The mature deciduous forest of oak, maple and hemlock on Trump’s land stood adjacent to another nature preserve and clearly held ecological value, according to one person involved in the conservation easement who spoke on the condition of anonymity to address a matter involving the president.
“That’s not even a question,” the person said. “This totally fits into land that gets preserved for conservation easements.”
But the key question was its monetary value — and how much Trump would get to deduct from his taxes by agreeing not to develop it.
In recent years, conservation easements have come under greater scrutiny from the IRS, tax experts and both parties in the Senate — because of abuses by some landowners who artificially inflated the worth of the land they preserved.
Dozens of cases have been litigated in recent years in which the IRS challenged the underlying valuation of conservation easements. Of those, the North American Land Trust has been involved in at least eight high-profile cases, including four involving golf course easements, said Nancy McLaughlin, a University of Utah law professor and expert in conservation easements who tracks these cases.
Shortly after launching his 2016 campaign, Trump sent the group $32,000 from his now-defunct charitable foundation, which was later ruled a misuse of charitable funds.
The North American Land Trust did not respond to a request for comment.
As the Seven Springs deal was being set up, appraisers from Cushman & Wakefield valued the property at $56.5 million, claiming that if it weren’t to be preserved, 24 homes, each worth an average of $2.1 million, could be built on the vacant part of the property, according to the document.
But the two independent appraisers who reviewed the document found significant problems with that report.
For one, they said, the appraisal does not mention Trump’s history of difficulties developing Seven Springs or offer much beyond unsubstantiated assertions that such a subdivision would comply with local planning rules. Several conservation easement experts said the development history is relevant to the value of the property.
“Imagine that we were wealthy developers and we were interested in purchasing that property from him,” said McLaughlin. “We would take into account that history. And we would say, ‘Well, gee, if we buy this property today, how likely is it that we are going to be able to develop it if he had all this problem trying to get the approvals?’ ”
One independent appraiser also flagged concerns about a “sleight of hand” technique that compared nearby sales on a price-per-acre basis, then applied it to much larger lots on Seven Springs. The appraiser also noted the claim that the 158 acres after conservation has “no economic value of its own,” when conserved land is in fact often bought and sold.
“The theme throughout this appraisal is: There is very little actual work done to collect data and analyze specific data,” he said. “It’s a lot of arm-waving and reference to national surveys.”
The second appraiser also flagged the lack of value after conservation — despite the fact that the conservation easement allows Trump many rights on the land, including hunting, driving off-road vehicles, building storage facilities and dividing it up into three parcels to sell off. Only two of the eight comparable sales in the appraisal were similar in size to Seven Springs. But the report values Seven Springs at more than $100,000 per acre higher than those other properties, the second appraiser noted.
“There is absolutely no support for all the adjustments,” the second appraiser said. “They don’t even show how much fairy dust it took to make up those adjustments.”
“This is barely a 50-page report, and ours are usually 150 or more sans fairy dust,” the second appraiser added.
A third person who reviewed the appraisal, Timothy Lindstrom, a Virginia attorney and conservation easement expert, cited some areas where the document might be “vulnerable” but found fewer problems with it.
“While there are no appraisals that are immune from IRS quibbling, my overall reaction to this appraisal was that it was competently done and provided realistic values supported by proper analysis and data,” he said.
During the easement process, Eric Trump also relied on Sheri Dillon, a longtime Washington attorney.
According to correspondence disclosed by James’s office, Dillon repeatedly pressured the appraisers at Cushman & Wakefield to increase their valuations.
According to filings by the New York attorney general, Dillon gave sworn testimony in August but declined to answer numerous questions about her role and withheld some documents. Dillon did not respond to requests for comment.
During the appraisal process, one of the Cushman appraisers wrote in an email that Dillon had reported that “the client blew up at her” and that Dillon began “trying to convince us to restore” a $2.1 million valuation each of the home parcels and “anything else that would push it up,” according to the court filings.
In another message, the Cushman appraisers ask Dillon to back off: “We’ve been over these issues and there is no point in dredging them up again. It’s time to agree to disagree and move on.”