Real Estate Investors Warned Against Developing in New York Following President Trump’s $355M Penalty Case
Real estate investors are being cautioned against developing in New York following a state judge’s ruling that former President Trump must pay $355 million in punitive damages in his civil fraud case. Kevin O’Leary, the chief of O’Leary Ventures and known as “Mr. Wonderful” on the TV show “Shark Tank,” issued the warning during an interview on “Fox & Friends Weekend.” He urged investors to remove the “Trump factor” from their analysis and view the case as they would with any real estate developer operating in New York State.
O’Leary emphasized that the judge’s decision sends a strong message to anyone looking to invest their capital in New York. He questioned the judge’s arbitrary determination of the penalty amount and expressed his confusion over the ruling. O’Leary stated, “No developer does [understand it].”
During another interview on “Cavuto: Coast to Coast” on FOX Business, O’Leary reiterated his concerns about doing business in New York. He compared the state to California, labeling both as “loser states” due to their policies, high taxes, and burdensome regulations. He declared that he would never invest in New York and highlighted that he is not alone in this sentiment.
O’Leary underscored the significance of the real estate sector in generating substantial cash flow. He argued that what Trump was found liable for is not much different from the typical negotiations that occur between a borrower and a bank. O’Leary used the example of a developer seeking a loan from a bank to construct a building. The borrower would present their previous building as collateral, and a back-and-forth discussion regarding its value would take place.
According to O’Leary, New York’s classification of certain aspects of this process as potentially fraudulent has led him to conclude that the state is unfavorable for businesses. He advised developers and investors to reconsider incorporating on the coasts, except for Florida, and instead consider states like North Dakota, West Virginia, Texas, or Oklahoma, which he referred to as “winner states.”
O’Leary emphasized that investors vote with their capital and urged them to carefully choose the jurisdictions in which they invest. He highlighted California’s adverse business climate and mentioned Massachusetts and high-tax New Jersey as other states that are pushing businesses away.
FOX Business host Charles Payne supported O’Leary’s viewpoint, stating that his suggestion of avoiding New York for incorporation purposes is “absolutely right.” Payne revealed that approximately $1 trillion in business has already left New York, mainly relocating to Florida and Texas. He also noted that Manhattan skyscrapers are operating at only around 50% capacity, suggesting that a full recovery is unlikely.
Payne attributed the exodus of businesses from New York to the state’s crime crisis and increasingly burdensome regulations. The combination of these factors is deterring businesses from establishing themselves in the state.
In conclusion, real estate investors are being warned against developing in New York following the recent ruling against former President Trump. The case’s outcome has raised concerns about the unpredictable nature of the legal system and its potential impact on business in the state. As a result, investors like Kevin O’Leary are advising caution and considering alternative jurisdictions that provide a more favorable business climate.
