Trump

by Donald J. Trump

  The study also pointed out several benefits that would come from the project. For example, the study predicted that the West Side would gain business worth at least $500 million a year from new residents, as well as tens of thousands of jobs, both during construction and permanently on the site. Providing jobs, in my view, is a far more constructive solution to unemployment than creating welfare programs. Finally, the study found that any added vehicular congestion in the area—a major concern among some critics—could be eased by improvements in local subways and the addition of a jitney service, which I’d already proposed.

  Even after moving the location of the world’s tallest building, I began to believe that I might also have to make a change in architects. I liked the fact that Helmut Jahn was an outsider, but I think it hurt us with the people at city planning. No one at the commission ever seemed quite comfortable with Helmut. It was never anything more specific than that, but in the end I felt that was enough. If the project was going to move forward, there had to be some spirit of cooperation. Reluctantly, I decided to make a change.

  A lot of people were surprised that I chose Alex Cooper. Even more than Richard Meier, Cooper was Jahn’s antithesis. Legendarily civic-minded, he’d built his reputation as an urban planner, served five years on the City Planning Commission, and helped write the rules of the planning process I was now going through. Along with his partner at the time, Stanton Eckstut, Cooper had just finished work on the master plan for a development at the southern tip of Manhattan called Battery Park. The critics loved it, calling it a classic example of enlightened urban architecture.

  I wasn’t a total fan of the Battery Park project myself. For example, while the project was situated on the waterfront, many of its apartments faced other buildings and therefore had no water views at all. In addition, I felt that a number of the buildings were totally undistinguished architecturally. However, Cooper’s contributions to the master plan—the placement of streets, parks, and other amenities—I did like, and I felt he could bring some of those ideas to our site.

  I had first interviewed Cooper in October 198S, shortly before going public with the Helmut Jahn plan for the site. There were already indications that the city might have problems with the way we’d designed our open space, and I was interested in hiring Cooper to work with Jahn just on that. Working together didn’t appeal to either of them, however, so I put the idea on the back burner.

  I called Cooper again in May 1986 and offered him the chance to take over sole responsibility for the Television City job. In my opinion, he was the guy best positioned to get my project moving forward. As for him, although we might have been on different sides of the fence in the past, what smart, ambitious architect could pass up such an opportunity? Television City was probably the best and most challenging design job available anywhere. It was about time, I challenged Alex, that he got associated with something big and bold, instead of small and precious. To his credit, Alex jumped at the opportunity. “My God,” he told a reporter later, “it’s three quarters of a mile of Hudson frontage, so you don’t lightly just walk away.”

  We had our differences, but I quickly discovered that Alex had far grander instincts than many people realized, and we got along better professionally than most people assumed we would. Alex added more streets and pedestrian walkways providing direct access through the project to the waterfront. He designed parks that were easily reached by anyone coming from outside. We agreed to increase the number of buildings and to make each one a little smaller. In front of the taller buildings, Alex added townhouses as a way of varying the scale.

  What Alex didn’t do was substantially reduce the amount of overall square footage below what I believed was necessary to ensure the project’s economic viability. Still, his changes plainly had an impact. Suddenly we started getting more positive feedback from city planning. When we unveiled the plan publicly on October 23, 1986, even our toughest critics were more enthusiastic than they’d been about the original plan. The head of the local community board, John Kowal, still objected to the superskyscraper, but he described Alex’s new approach as a “brilliant answer to Trump’s desires” and “a far better plan.”

  Cooper himself, who’d been skeptical of the size of the project at first, grew more enthusiastic as he got more involved in the design. In April 1987, he told the New York Times, “I hope that the project can be dealt with on its merits. The problem is that the antidevelopment spirit in this city is very, very strong right now. What we are trying to do at Television City is different. There is room by the river, and we are providing a level of public amenity that makes this immense size justifiable—parks, waterfront promenades and so forth. The world’s tallest building demands an extraordinary situation. But if there is any place that such a skyscraper makes sense, it is here.”

  I couldn’t have said it better myself.

  As for attracting NBC to the site, I felt our cause got a boost when General Electric purchased RCA—owner of NBC—in mid-1986. I knew Jack Welch, Jr., the chairman of GE, and he struck me as a brilliant big thinker who would immediately see the advantage of locating NBC on a site like Television City. Welch went on to name Bob Wright, one of his top GE executives, to head NBC, and I got the same feeling about Wright. They are exceptional men—even if they don’t choose my site.

  At the time GE took over, NBC had been actively considering no less than four New York City sites, in addition to the one in New Jersey. In January 1987, NBC announced that aside from the possibility of remaining at Rockefeller Center, they’d narrowed their choice to just two sites: ours and the marshland owned by Hartz Mountain Industries in Secaucus, New Jersey. Eliminated from the competition were three other New York City sites.

  The result was to make the issue very simple: either NBC came to my site, or they moved to New Jersey. The city had already announced a willingness to offer NBC tax concessions, mostly in the form of property tax abatements, as an inducement for the network to remain in New York. The question now was whether they’d offer a package competitive with New Jersey’s proposal.

  Incredibly, the city seemed content to sit back and do nothing. I say incredible because in early 1987, Mobil Oil, one of the largest corporations in the world, announced that it was abandoning New York and moving to Virginia. A short time later, J. C. Penney, another huge employer, revealed that it too was leaving, and taking along many thousands of jobs. You’d think the city, faced with yet a third big company threatening to leave, would spring to action. Not under Ed Koch, however.

  In late February 1987, the Daily News ran an editorial that I thought captured the dilemma perfectly. After suggesting that the loss of NBC would be “a major blow to the city—an enormous loss of jobs, revenues and prestige,” the editorial addressed the significance of my site. “Television City is far from a certainty,” it said. “The project must work its way through the city approval process, where anything from bureaucratic inertia to political cowardice can kill it. That’s not a case for City Hall’s blindly accepting Trump’s plan in toto. But it is an argument for swiftness and efficiency in making crucial yes-or-no decisions. The goal of city policy must be to keep NBC home. The worst possible result would be to lose it to cowardice.”

  In my view, that’s precisely what was happening. Early in May 1987, I went to the city with a proposal for a tax-abatement program that would make it possible for me to offer NBC a deal competitive with New Jersey’s. Alair Townsend, the city’s head of economic development, had said herself that without abatement, NBC stood to save up to $2 billion over a twenty-year period by moving to New Jersey.

  I suggested a deal under which I’d build NBC’s headquarters myself, at a cost of between $300 million and $400 million. I’d also subsidize NBC’s rent for thirty years by charging only $15 a square foot, which is less than half the break-even rent. Finally, I’d agree to give to the city 25 percent of any profits Television City earned for a period of forty years. In return, I’d get a twenty-year ta
x abatement on my entire site. Even then, my savings would begin only when I got the project up, which was years away, at best. In the meantime, I’d be subsidizing NBC out of my own pocket, to the tune of at least $30 million a year.

  Ironically, there was almost total opposition to my offer within my own organization. Robert, Harvey Freeman, and Norman Levine felt that for me to agree to give NBC $30 million a year in subsidies before we knew what revenues we’d be earning was too great a risk. My feeling was that the risk was worth taking. A tax abatement for our residential apartments would make them more marketable. In addition, NBC would be a prestigious addition to the site, and a lure. For the city, it was no-lose: they put up no money at all to keep NBC, and in lieu of taxes they’d share a substantial percentage of any profits we ultimately earned.

  My proposal sparked the first serious negotiations we’d had with the city. Ed Koch didn’t participate, but the city officials under him seemed receptive to the general structure of the plan. On May 25, however, after more than three weeks of intense negotiations, Ed Koch turned the deal down cold. I’m convinced that he made the determination not on the merits, but rather because he didn’t want to make any deal with me—no matter how good it was for the city.

  The next day I wrote Koch a letter that I’d held off writing for more than a year. “Dear Ed,” it said, “Your attitude on keeping NBC in New York City is unbelievable and, I predict, will lead to NBC leaving the city, as so many other major companies have, for New Jersey.” I again ran down the benefits of keeping the network, and ended by saying, “I am tired of sitting back quietly and watching New Jersey and other states drain the lifeblood out of New York.”

  Koch replied exactly the way I expected him to. He refused to respond to my specific points, and he tried to turn the issue into a personal contest of wills—Koch, the great protector, against Trump, the greedy developer. For months, he’d been looking for a way to get back at me for embarrassing him by building Wollman Rink so quickly and efficiently. The West Side yards, he apparently decided, was the perfect vehicle. When I came back with yet another suggestion for saving NBC—selling nine acres of my site at below my cost directly to the city—Koch rejected it without so much as a discussion.

  I can’t say I was surprised when the New York Times came out against my plan. The writer of the editorial was longtime Koch ally Herb Sturz. Until joining the Times editorial board only a few weeks earlier, Sturz had been head of the City Planning Commission, with specific responsibility for Television City. In my view, letting Herb Sturz write editorials about New York City is analogous to permitting Caspar Weinberger to write editorials about Reagan’s military policy.

  I did get strong editorial support, however, from the Daily News. “The mayor is correct in saying there are limits to how much the city can give NBC,” the News wrote. “But that’s no excuse for inaction. Koch should personally bring together the decision-makers from NBC, Rockefeller Center and Trump’s outfit. He should lay out a strong plan—and knock heads if that’s what it takes.”

  Instead, Koch offered NBC a half-assed, watered-down tax-abatement proposal, which he said they could apply at any Manhattan site they chose. He even offered a little free advice about some new sites they might consider. Free advice, of course, tends to be worth what you pay for it. No sooner did Koch make his suggestion than an NBC spokesman said the network wasn’t interested in considering more sites. In the meantime, the executives at Hartz Mountain Industries weren’t sitting idly by. Recognizing an opportunity to force NBC’s hand, they announced on June 1 that the network had thirty days to accept the terms that they were offering and which New York was no longer willing to match.

  There were some who told me that I was hurting my chances for zoning approval by taking on Koch in the media. They may well have been right. But I felt there was a bigger issue at stake. I’ve come to believe Ed Koch is so incompetent and destructive to New York that someone has to stand up and say so, publicly. When the Daily News polled its readers as to whether they agreed with Koch’s position on NBC or with mine, the results were very satisfying. Nearly 10,000 readers sided with me. Only 1,800 went with Koch.

  I’ve waited a long time to build on the West Side, and I can wait longer to get the zoning I feel is necessary. In the end, I will build Television City with or without NBC and with or without the current administration.

  I continue to keep all my other options open too, because, as I’ve said, it’s the only way you truly protect yourself. If the residential real estate market remains strong, I’ll undoubtedly do very well selling large, riverview apartments in that location. If the market generally falls—and that can only be temporary in a city like New York—I may choose to build only the shopping complex. I’ll do very, very well just with that.

  My time—and Television City’s—will come. I’m lucky that I can afford to wait, because that way I’ll be able to do it right. The one thing I know is that I’ll be doing business in New York City long after Ed Koch has moved out of Gracie Mansion.

  14

  THE WEEK THAT WAS

  How the Deals Came Out

  I SAID AT THE START that I do it to do it. But in the end, you’re measured not by how much you undertake but by what you finally accomplish. What follows is an accounting of how the deals that crossed my desk in the week I chose to describe have since turned out.

  Holiday Inns

  Several weeks after selling my Holiday stake for a profit, which was substantial but not the reported $35 million, I began purchasing stock in another casino company, Bally Manufacturing Corporation. In a short time, I accumulated 9.9 percent of the stock. Bally responded by adopting poison pill provisions aimed at thwarting any attempt at a hostile takeover. When they also sued to try to keep me from buying any more stock, I countersued.

  Two days after I initiated my suit, Bally announced an agreement to purchase the Golden Nugget casino at the highest price ever for an Atlantic City casino, almost $500 million, including the cost of the bonds. Once again, the real goal seemed to be to thwart me. No company is legally permitted to own more than three casinos in Atlantic City, and if I took over Bally after they’d purchased the Golden Nugget, I’d own four.

  In effect, however, they put me in a win-win position. By paying such a huge price for the Nugget, Bally could only serve to increase the value of all casinos in town, including the two I already owned.

  In the end, Bally offered me a settlement I couldn’t refuse. I agreed not to stand in the way of their purchase of the Nugget. In return, they agreed to buy back my 9.9 percent stake in their company at an average price much higher than I paid, giving me a profit on my brief investment of more than $20 million.

  In March 1987 I made my third attempt to purchase a casino company, Resorts International, but this time on a friendly basis. In the wake of the death of Resorts founder James Crosby, several other parties had launched bids for the company, but none had been successful. In the meantime, I’d developed a close relationship with several members of Resorts who controlled the company. In April 1987 I came to an agreement with the family to buy or tender for 93 percent of the voting stock in the company at $135 per share.

  Several other bidders subsequently offered a higher price, but the family stuck by our agreement. Among other things, they believed I was the bidder with the best credentials to complete construction on Jim Crosby’s pet project, the Taj Mahal on the Boardwalk. Designed as the largest and most lavish hotel-casino in the world, the Taj Mahal had already gone many millions of dollars over budget and was still nowhere near completion at the time Crosby died.

  I hope to have the Taj open by October 1988. In order to create a more efficient operation, I may close the casino in the existing Resorts facility adjacent to the Taj Mahal and use it to service the Taj. Of course, I could always sell it to another casino operator for the right price. Who knows? Maybe Bally or Holiday Inns might be interested.

  Annabel Hill

  We ended up
raising more than $100,000 for the Annabel Hill fund, which we used to pay off her mortgage and save her farm. To celebrate, we flew Mrs. Hill and her daughter to New York, where we held Trump Tower atrium’s first—and, I suspect, its last—mortgage-burning ceremony.

  United States Football League

  The owners voted unanimously to appeal the ruling under which the USFL was awarded just one dollar in damages, despite the jury’s antitrust finding against the National Football League. I think the grounds for an appeal are as strong as our original case.

  Wollman Rink

  The rink came in at $750,000 under budget and opened a full month ahead of schedule in November 1986. More than a half million skaters enjoyed the rink during the first year. Before the opening the city predicted a major operating loss. For the first full season of operation, we earned almost $500,000 in profits—all of which went to charity.

  Palm Beach Towers

  Lee Iacocca became my partner in the purchase of two condominium towers in the Palm Beach area, which we bought for approximately $40 million. When we took over the project, only a few units had been sold. In a short period of time, operating in a glutted market for condominiums in southern Florida, we sold or sale/leased nearly fifty units and managed to turn a bankrupt operation into a big success story. During the next year we intend to open a major restaurant on the ground level of one of the towers. Among those who’ve bid for the space are the owners of the 21 Club in New York, and Harry Cipriani, owner of Harry’s Bar. Sir Charles Goldstein was dismissed as counsel to Lee before the deal was concluded.