When Donald Trump officially re-opens his Turnberry golf resort this week, he will be unveiling his most prestigious golf project yet. The seaside course has hosted The Open – Europe's only golf major – four times and is regularly listed as one of the world's top courses. It's also one of the biggest golf investments by the Republican party's presumptive presidential nominee.
The Edwardian hotel has been stripped and refitted with Italian marble, parquet floors, 315 chandeliers and gilt-edged furniture. Outside, the famous Ailsa course has been redesigned and extended. Trump says he is spending 200 million pounds ($290 million) on Turnberry, including the 34 million pounds he spent buying the property in 2014.
"I paid all cash. I then spent a tremendous amount of money on renovating the hotel and the golf courses," he told Reuters in a telephone interview. "It's incredible."
Turnberry is one of 12 courses Trump has bought in Britain, the United States, and Ireland over the past 19 years. He says they are successful investments, bought cheaply when other developers fell into trouble or the market was weak.
The former reality TV star says his kind of business acumen is what the United States needs. "Just like I have no debt (on the courses), just like all these things ... we're going to reduce the debt of the country, we're going to increase jobs," he told Reuters. "We're going to make America great again."
How great his golf course investments have been is debatable. A Reuters examination of them shows that Trump has likely lost millions of dollars on his golf projects. The analysis shows high costs and modest current valuations. Using conservative estimates of the amount Trump has spent, he may be breaking even or making modest gains; on higher estimates – based on what Trump has said he is spending – he's losing money.
Trump disputes the analysis. He said Reuters' calculations overestimated what he had spent and underestimated the value of his investments. He declined to provide figures for his expenditure on courses or their current or future market values.
"The golf courses are doing very well. Every one of them makes a lot of money," said the author of the "Art of the Deal." "They are not really golf investments, they're development deals."
He added: "I have the right to build thousands of homes on the various properties I own, and I haven't wanted to build them (yet) because frankly I've been busy doing other things, like running for president."
A keen golfer himself, Trump began investing in the sport around 1997. Property records and corporate filings show that since then he has spent $330 million buying courses and land to develop into courses.
In press releases and interviews, Trump has said he has spent lavish sums on improving every property. Reuters identified eight for which Trump, his companies or children gave specific investment figures: Stated investment on improving these eight properties tops $800 million.
Trump has made some money back by selling homes and plots of land around the courses. An analysis of plots on his golf properties shows Trump has raised almost $100 million this way.
Information on operating income from the courses is harder to find. Only three Trump golf properties publish accounts – Turnberry; Trump International Golf Links Scotland, north of Aberdeen; and Trump International Golf Links Doonbeg in Ireland. All are loss-making, according to their latest filings.
Managers at all three said they were hopeful that the investment Trump has made in the sites will allow them to start to show a profit and that Trump expected them to deliver a return on his investment (ROI).
In Turnberry, golfer Brad Hughes visiting from Orlando, said: "Trump has done an outstanding job. I played here 20 years ago and it's much better now. We paid 175 pounds to play. That's around $250. It's well worth it for that quality. But will he get the ROI?"
Judging by past performance, Trump faces a challenge. Turnberry has only occasionally made a profit over the past 30 years. Revenue peaked at just under 16 million pounds in 2007, accounts for Turnberry's operating companies show.
So in total the analysis indicates Trump has spent about $1.1 billion. In return, he has received up to $200 million from property sales and other income, according to property records and golf analysts' estimates, and he owns a string of new or refurbished golf courses. What are they worth?
Reuters valued Trump's properties using several metrics. Golf consultants say clubs are typically sold within a range of 0.8 to 1.8 times turnover. Reuters used a multiple of 1.5 times turnover figures for the 12 courses, drawn from company accounts or Trump's election disclosures. Using estimates by real estate agents and other investors, the analysis added further amounts to reflect the fact that some of Trump's land is already designated for development. Further amounts were added to reflect that some Trump properties have trophy status, for which buyers might pay a premium.
On these calculations his golf courses are estimated to be worth $500 million to $600 million. This analysis suggests Trump could have lost hundreds of millions of dollars investing in golf.
"The figures indicate that those were bad investments," said John Griffin, professor of finance at the University of Texas at Austin, who has previously studied Donald Trump's wealth. He said that a typical listed property fund would have returned much more over the same period. By comparison Trump "seems to have lost half his investment," he said.
Trump dismissed that suggestion. He told Reuters he had spent "much less" than $1 billion on the golf portfolio, and that the courses and resorts are worth "many times" what he paid for them when their long term potential is considered.
"It's pretty simple," he said. "My golf holdings are really investments in thousands, many thousands of housing units and hotels. At some point the company will do them. Hopefully, I won't because I will be president, but we're in no rush to do them."
Whether Trump can or will build the thousands of houses he envisages depends partly on planning regulators granting him permission and on commercial demand.
At Turnberry, Trump owns 200 acres of land just north of his hotel that are currently occupied by grazing cattle and a crumbling World War One airstrip. Conceivably, this could be developed. "I would have the right to build at least a thousand houses on Turnberry, if I wanted to, again, if I wanted to. Right now I am doing something far more important than building houses," he said.
However, according to the South Ayrshire Council's Local Development Plan, the part of Trump's land not occupied by the hotel and golf course is zoned as agricultural land. Planning Officer James Hall said Trump does not have the right to build houses on the land and that re-zoning would be difficult since there was no perceived shortage of housing in the area. Some local estate agents said they doubted there was a market for the homes.
The previous owner of Turnberry, Starwood Hotels and Resorts, had also considered building houses or timeshare properties. It had eventually concluded the project didn't make commercial sense. "We explored redevelopment and decided it wasn't really going to be attractive," Vasant Prabhu, Starwood Chief Financial Officer, told an investors' conference in 2008. Starwood declined to comment further.
Turnberry is not the only place where planning departments and Trump disagree. In 2009, Trump bought a riverside course in Loudoun County, Virginia, for $13 million, which he renamed Trump National Golf Club Washington D.C. He says he has "hundreds of acres" along the Potomac River that he can develop.
However, the land is in a flood plain and the Loudoun County Zoning Ordinance does not allow construction of residential housing on such land. "The potential for residential development on the property is limited," said Glen Barbour, a spokesman for the county.
Trump is more optimistic. "No, I can do anything," he said. "I can get that zoned easily, but I don't want to. I think it's a tremendous success. We have the senior PGA championship coming there this year, as an example. I don't want to do it, but if I wanted to, I could do whatever I wanted to do. It's my land, I own the land."
"I have never failed if I go for zoning," he said. Trump cites his experience in Scotland as evidence of this. In 2006, he bought a 1,800 acre seafront estate at Balmedie, north of Aberdeen. The estate was farmland except for a stretch facing the North Sea, with 100-foot sand dunes designated a protected nature area.
"I bought the land for the right price because you weren't even allowed practically to walk on the dunes, let alone build major golf courses there," he said.
Trump applied for permission to develop a golf course and buildings at the site. Environmentalists objected, but the Scottish government, mindful that the North Sea oil which fuels Aberdeen's economy was running out, approved Trump's plan for a course. It also gave provisional planning permission for around 500 homes, which Trump said were required to make the project economically viable.
Amid the dunes, Trump has built what his website describes as "The World's Greatest Golf Course," with rye grass walkways, dozens of bunkers and dramatic sea views.
The re-zoning coup hasn't come cheap. Accounts for the company which owns the course show it invested 40 million pounds in buying and improving the site up to the end of 2014. General Manager Susan Malone says that total spending to date on the project, including expenditure on it by other Trump companies, is 100 million pounds.
Before Trump can build his houses, he has to complete another golf course and a hotel, according the outline planning permission for the site. Malone says Trump wants to bring forward the construction of homes to help finance the second course and hotel.
With development land in good supply, thanks to the latest Strategic Development Plan which set aside land for almost 50,000 homes in the area, and with the collapse in oil prices, some property professionals said it was unlikely Trump could sell his development land for more than 20 million pounds.
Trump said the course is a great success and that he was unconcerned about any current market weakness. "It'll come back. It comes, it goes. To me, it really doesn't matter to me. I have no debt," he said.
One of the largest investments he has made with his own money is buying the Doral resort in Florida for $150 million. Trump says he got the real estate cheap out of bankruptcy at a low point in the market. He cites a neighbouring plot that was formerly part of the Doral estate and housed one of its original five courses, known as the White Course.
That plot, less than a quarter the size of Trump's Doral holdings, was sold earlier this year for $96 million, according to property records in Miami. "That's one out of five," Trump said. "I have four courses."
However, Gerard Yetming, a real estate agent who helped sell the White Course, said it wasn't reasonable to value Trump's acreage by comparing it to the White Course site. The White Course, he said, was unusual in that it sat on a largely undeveloped block and had planning permits for over 2,000 housing units.
On Trump's land, previous Doral estate owners had already sold homes around the courses. That will make it harder for anyone to achieve building rights and that depresses the land value, Yetming said.
Trump disagrees and is undeterred. He says he spent $250 million renovating Doral and that it now "makes a lot of money" as well as adding to his business's net worth. His fortune has grown, in part thanks to golf, he says.
"We have a value of over $10 billion, it's a great company I've built," he said.