Trump fraud ruling reveals New York's 'assault' on real estate, 'Mr Wonderful' says: Move your business out
O'Leary Ventures chief and "Shark Tank's" "Mr. Wonderful" Kevin O'Leary warned real estate investors 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.
O'Leary told "Fox & Friends Weekend" to take the "Trump factor" out of the equation and look at the case as if it were any real estate developer with a marked presence in New York State.
"Forget about the Trump factor," he said. "It's not about that. What does this say to everybody that wants to do work in New York and wants to risk capital? … this judge arbitrarily decide[d] that this is the right amount. I don't understand it. No developer does."
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He added, "It's an atrocity. It's an embarrassment, but it's an assault on real estate."
O'Leary echoed his comments Monday on "Cavuto: Coast to Coast" on FOX Business.
'New York was already a loser state, like California is a loser state. There are many loser states because of policy, high taxes on competitive regulation,' he said. 'I would never invest in New York now. And I'm not the only person saying that.'
O'Leary said very few business sectors create the amount of cash flow that real estate does. What Trump was found liable for doing, he argued, is not too different from the typical "haggling" that goes on between a prospective debtor and a bank.
"You go to a bank and you say, 'Look, I want to borrow $200 million to build a building’. And they say, ‘What assets do you have that we can secure this loan against?’ And you point to a building you built before, and you haggle, and you argue about the value of that building."
With New York appearing to categorize some instances of that process as potentially fraudulent, O'Leary said New York has supplanted California as the top name on his list of "loser states" for business.
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O'Leary suggested developers and investors ignore the trend of incorporating on the coasts, except for Florida, and instead consider moves to incorporate in North Dakota, West Virginia, Texas or Oklahoma.
"These are ‘winner states'," he said. "Why go to a ’loser state' like New York?"
"Each of us as investors, we vote with our capital," he said.
California, formerly at the top of his list, has been "putting itself out of business slowly-but-surely" with its adverse business climate, O'Leary said, adding Massachusetts and infamously high-tax New Jersey are close behind.
FOX Business host Charles Payne agreed with O'Leary on Monday, telling Fox News that his suggestion "no one should touch New York" incorporation wise is "absolutely right."
Payne said $1 trillion in business has already left New York largely for Florida and Texas, and that with Manhattan skyscrapers around 50% capacity, it appears unlikely they will return to full use.
Payne added New York's crime crisis and ever-increasing regulations are keeping businesses out of the states.