Former President Donald Trump's civil business fraud trial took a significant turn on Tuesday as the focus shifted to the valuation of his Mar-a-Lago club in Palm Beach, Florida. Testifying for Trump's defense, a Florida real estate attorney argued that the club could be sold as a residential property, contradicting decades-old legal documents in which Trump vowed to use it exclusively as a club. The dispute over the property's value is crucial to the New York state lawyers' claim that Trump fraudulently inflated its worth.

During the trial, a Palm Beach luxury real estate broker presented a captivating video showcasing the historic estate and testified that he believed it to be worth over $1 billion as of 2021. Spanning 17 acres with waterfront on two sides, Mar-a-Lago holds great significance for Trump as his personal residence and a venue for high-profile meetings during his presidency. It is also the place where federal special counsel Jack Smith claims Trump improperly stored classified documents, an allegation the former president denies.

The valuation of Mar-a-Lago is a key element in the ongoing New York civil case, which accuses Trump and his company of deceiving lenders and others by inflating the values of prime assets, including the club. In a pretrial ruling, Judge Arthur Engoron found that Trump had exaggerated the value of Mar-a-Lago by as much as 2,300%, compared to the valuations provided by the Palm Beach County tax appraiser. These valuations ranged from $18 million to $28 million.

Trump adamantly denies any wrongdoing, asserting that his financial statements actually undervalued his assets and were accompanied by disclaimers that absolved him of liability for errors. He has repeatedly expressed frustration with the case, particularly regarding the allegations surrounding Mar-a-Lago. Just a few days ago, Trump vented on his Truth Social platform, accusing the judge of fraudulently reducing the value of the club.

The judge's reference to the Palm Beach County tax assessment is based on the club's annual net operating income, not its resale value as a residence or reconstruction costs. The operating-income method is the standard approach for valuing social clubs in the county and offers tax advantages for Trump, resulting in a property tax bill of $602,000 this year instead of approximately $18 million if Mar-a-Lago was assessed at $1 billion.

However, a 2002 agreement between Mar-a-Lago and the National Trust for Historic Preservation states that the property must be used exclusively as a club, prohibiting any other development. State Attorney General Letitia James argues that Trump should have valued Mar-a-Lago based on its club income, similar to the county's assessment. James contends that Trump's former corporate controller, Jeffrey McConney, ignored the agreement with the National Trust when valuing Mar-a-Lago at up to $612 million in his financial statements for 2021.

Trump, in his testimony last month, maintained that he retains the right to designate the property as a residential home. Miami-based real estate attorney John Shubin supported this claim, stating that there is no prohibition on using Mar-a-Lago as a single-family residence. He further highlighted a 1993 agreement between Trump and the town of Palm Beach, which stated that if the club were "abandoned," Mar-a-Lago could revert to private residential use.

Trump's defense team argues that, considering these factors, there should be no issue with valuing the property as if it could be sold as an individual residence. Defense attorney Christopher Kise declared that anyone purchasing Mar-a-Lago would simply step into the shoes of President Trump.

Luxury real estate agents in Palm Beach have suggested that the property could sell for anywhere between $300 million and $600 million. If a bidding war were to ensue among ultra-wealthy contenders, the price could potentially exceed $1 billion. The outcome of the trial and the determination of Mar-a-Lago's true value will have significant implications for Trump's legal battles and his future financial standing.