New owner of a high-rise hotel and condo development reportedly paid millions of dollars to Donald Trump’s company to break off a branding contract

The Trump name is to be scrubbed from the Toronto skyline after the new owner of a high-rise hotel and condo development reportedly paid millions of dollars to Donald Trump’s company to break off a branding contract.

The US firm JCF Capital said on Tuesday that it had reached a deal with Trump Hotels to buy out its management contracts. While the Toronto hotel, which opened in 2012, was not owned by Trump, contracts inked with the building’s developer, Talon International Development, saw the project license the Trump brand and managed by a Trump-owned company.

Facebook Twitter Pinterest Donald Trump at an announcement for a Toronto building in 2001. Photograph: JP Moczulski/EPA

The sum involved in the deal was not disclosed. But a source told Bloomberg News that the amount paid by the US firm was at least US$6m and that the Trump name may be taken off the building as early as August.

In a statement, JCF’s president, Jay Wolf, said the Trump team had been “exceptional partners and we hope to have the pleasure of working with the Trump Organization again in the future”.

Since breaking ground in 2007 in the heart of Toronto’s financial district, the Trump International Hotel and Tower has been beset by woes. The 65-storey tower has suffered construction delays and cost overruns and has struggled financially, with the building’s developer defaulting on its construction loan last year. Court documents suggest that less than half of the residential condos have been sold while hotel occupancy rates have hovered below expectations.

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The project has also been the target of a long-running legal battle launched by unhappy investors. A court ruling last year saw the developer ordered to rescind one sale and pay damages to another investor over “negligent misrepresentation”.

And as Donald Trump launched his presidential campaign, the beleaguered project became the site of several protests, as anger mounted over Trump’s remarks towards women, Mexicans and Muslims.

Earlier this year, JCF Capital, created by Juniper Capital Partners and Cowie Capital Partners, bought the units that were not owned by individuals. The building was a tough sell; a court-run sale received no other bids. On Tuesday, the firm did not say whether another group would be taking over the management and branding of the project.

In the statement put out by JCF, Trump Hotels said it was pleased with the agreement it had reached with the project’s new owners. “This was a record-setting year for the hotel and we are incredibly proud of our performance,” said Eric Danziger, chief executive of Trump Hotels.