One family fought the system and stopped Donald Trump's first venture in India

Prasad Panvalkar opposed plans for India's first Trump Tower because the local builder refused to offer his family housing in the new development.

Jan. 16, 2017 3 AM PT

Reporting from MUMBAI, India — When a Mumbai real estate developer acquired a crumbling, 80-year-old apartment building and announced plans to replace it with a luxury skyscraper, two dozen families accepted buyouts and moved. But one tenant refused.

Prasad Panvalkar, an ink salesman, argued that city regulations required the builder to resettle his family in the new development, which the company said it wouldn’t do.

Panvalkar’s case was not unusual in Mumbai, a dense seaside metropolis where construction companies routinely intimidate residents, flout codes and bribe authorities. But it stood out for one reason: The builder’s business partner was Donald Trump, who had sold the rights for branding the high-rise as India’s first Trump Tower.

Panvalkar fought a six-year battle before the developer, Rohan Lifescapes, agreed in June to house his family in the revamped property less than a quarter-mile from the Arabian Sea. By then, regulators had cited the project for multiple legal and building violations, delaying construction and prompting the Trump Organization to walk away from the deal.

Trump has since signed agreements to stamp his name on several other properties in India, expanding his involvement in a lucrative but ill-regulated real estate industry that experts say is notorious for graft and trampling on people’s rights.

“The entire housing industry in India survives and thrives on corruption and bribe money,” said Chandrashekhar Prabhu, a former Mumbai housing official. “No approvals are given, nothing gets built without giving bribes.”

Trump has hailed the “tremendous amount of growth potential” in Indian real estate, but its opaque nature presents complications for the president-elect. His Trump Organization has attached itself to five projects reportedly worth a total of $1.5 billion in India, one of its largest real-estate portfolios in any country outside the United States.

In most cases Trump has not invested his own money but licensed the use of his name in exchange for a fee, a percentage of sales or both.

“I don’t think he gets involved too much in the details,” Prabhu said. “He signs on with existing projects, so it would be difficult for him to know if bribes were paid or illegalities were done.”

Current and past Trump-branded projects in India have run into legal troubles that offer a window into this fast-growing country’s often dirty world of real estate — one his company seems eager to exploit.

The entire housing industry in India survives and thrives on corruption and bribe money.

— Chandrashekhar Prabhu, former housing official

Trump, who has described Indians as “amazing people” and said in October that the U.S. and India would be “best friends” if he were president, visited the country in 2014 for a ritzy party to unveil a 23-story Trump Towers residential complex in the western city of Pune. That project is now under police investigation after a local activist alleged the land was acquired with fraudulent documents.

The developer, Panchshil Realty, has denied wrongdoing. Company director Sagar Chordia, who made headlines when he and his partners traveled to New York to visit Trump days after his election victory, did not respond to requests for comment.

Fittingly for a New York tycoon, Trump chose the financial hub of Mumbai, formerly known as Bombay, for his first foray into India. The city is filled with decrepit colonial-era buildings that sit atop some of the most expensive land in Asia. In 2011, Trump reached a licensing agreement with Rohan Lifescapes, which was planning a 45- to 60-story monolith of 4,500-square-foot apartments with sweeping sea views.

Occupying part of the half-acre site was the four-story building where Panvalkar lived with his wife, son and brother-in-law. Constructed in 1929, it belonged to a charitable trust that provides housing for the Pathare Prabhu community, descendants of Hindu aristocrats from northern India who settled in Mumbai beginning in the 12th century.

The building’s paint was corroding in the salt air, its walls pocked by water damage. By law, the trust could not sell the property to a commercial developer, but such provisions have been systematically ignored in the rush to redevelop Mumbai’s aging urban landscape.

The trust ceded the land to Rohan Lifescapes, which in 2010 sent a representative to tell Panvalkar that he and his family would need to leave the one-bedroom apartment they rented on the second floor.

“They said all you old residents must vacate,” recalled the stout, bespectacled Panvalkar, now 57. “They were creating a high-end building.”

Panvalkar said the company paid each tenant a few thousand dollars to move. But he pointed to a Mumbai regulation that said that developers seeking to tear down pre-1960 buildings must offer residents housing on the same property.

His wife, Smita, urged him to hold out. Her father had been one of the building’s first occupants; she was born there. It was a short walk to the shop where Panvalkar sold printer ink, a business started by his grandfather.

“She was attached to the place,” Panvalkar said. “But it was also a question of our rights. She was determined.”

They, their son and her brother were the last family living in the building in May 2011, when a fire broke out early one morning in the meter room on the ground floor. Panvalkar crawled through a side window and onto the parapet of the adjacent building, climbing down to the ground as fire engines arrived to extinguish the blaze.

The building sustained minimal damage. Mysteriously, however, electricity wasn’t restored for six weeks in what Panvalkar suspected was an effort to force the family out.

But they stayed, sweating through the oppressive summer humidity without fans, a refrigerator or a washing machine, his wife rising early every morning to wash clothes by hand.

“This is how it goes in India,” Panvalkar said. “There are always ways of putting pressure on tenants.”

Panvalkar began investigating the project, using India’s freedom of information laws to obtain documents and sharing them with the state urban development department.

In December 2011, the state froze the project because of multiple irregularities. The state said city authorities had approved building plans even though the site lay in the path of a proposed freeway and the size of the apartments far exceeded what was allowed in Mumbai’s protected coastal zone, where there are square-footage restrictions on new construction.

“We built beyond what was permitted,” Haresh Mehta, chairman of Rohan Lifescapes, acknowledged to the Times of India in a 2012 interview. Mehta did not respond to questions sent through a spokesperson.

The new apartments would be less than half the size promised, denting their luxury appeal. According to multiple reports, Trump’s son, Donald Trump Jr., traveled to Mumbai to ask the state’s top official to allow the project to proceed, but was rebuffed.

Soon after that, Trump ended his involvement. In 2013, Donald Trump Jr. told a Mumbai newspaper that the company “only brands the highest-end luxury developments in each market that we enter.”

That year Trump signed on to create a new Trump Tower in Mumbai, 75 stories high, with a golden facade and three-bedroom apartments starting at $1.3 million. The developer, Lodha Group, was founded by a vice president of the Bharatiya Janata Party, or BJP, which is led by Narendra Modi, India’s prime minister.

“Our collaboration has been raising the bar in every sense of luxury and services and setting a new benchmark for luxury living in India,” the Lodha Group said of the building, due to open in 2018.

Other Trump-branded developments underway in India include offices and a residential complex in the New Delhi satellite city of Gurgaon, and a high-rise in the eastern city of Kolkata, formerly Calcutta.

Trump has rejected concerns that his business deals involving politicians in other countries, including the Philippines and Turkey, present possible conflicts of interest. In India, political leaders are deeply entangled in a construction business that can produce eye-popping profits.

“There is an unholy nexus,” Prabhu said. “Your investment of x becomes 20x in two to three years’ time. There is no business in the world — other than drug cartels and perhaps terrorism — which gives you these kinds of returns.”

In 2014, the BJP took over the state government and eased the restrictions that had held up demolition of Panvalkar’s building. The freeway plans were scrapped and coastal development rules were eased.

Rohan Lifescapes resumed the project with an Indian partner, announcing that instead of one expansive skyscraper, it would build a pair of smaller towers. In June, Panvalkar and the company reached a settlement that guarantees his family an apartment in one of the new buildings, clearing the way for the old structure to be razed.

The victory came at a cost. His wife died of a heart attack in November 2011, six months after the fire. In a small office behind his store, he keeps a framed picture of her, surrounded by a collection of idols depicting Ganesh, the Hindu elephant god, revered as the remover of obstacles.

“We had nothing against Trump. Let him make his money however he wants,” Panvalkar said. “My wife was only saying it should be fair.”

Special correspondent Parth M.N. contributed to this report.

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