The Art of the Deal by Donald Trump | Narrated by Himself / Full Audiobook

Greetings everyone I am Donald J Trump and I welcome you to this fantastic audio book version of my book The Art of the deal published in 1987 this book talks about my childhood in Jamaica Estates Queens it also describes my early work in Brooklyn prior to moving to Manhattan and building the Trump organization my actions and thoughts in developing the Grand Hyatt Hotel in Trump Tower in Renovating wolman rink and regarding various other projects as such it represents a throwback and a snapshot of my time in the 70s and 80s I had lots of fun

writing this one and I sincerely hope you will have a great time listening but without further Ado the art of the deal chapter one dealing a weak in the life I don't do it for the money I've got enough much more than I'll ever need I do it to do it deal are my art form Other people paint beautifully on canvas or write wonderful poetry I like making deals preferably big deals that's how I get my kicks most people are surprised by the way I work I play it very loose I don't carry a briefcase

I try not to schedule too many meetings I leave my door open you can't be imaginative or entrepreneurial if you've got too much structure I prefer to come to work each day and just see what develops there is no typical week in my life life I wake Up most mornings very early around 6 and spend the first hour or so of each day reading the morning newspapers I usually arrive at my office by 9: and I get on the phone there's rarely a day with fewer than 50 calls and often it runs to over a

hundred uh and in between I have at least a dozen meetings the majority occur on the spur of the moment and few of them last longer than 15 minutes I rarely stop for lunch I leave my office by 6:30 But I frequently make calls from home until midnight and all weekend long it never stops and I wouldn't have it any other way I try to learn from the past but I plan for the future by focusing exclusively on the present that's where the fun is and if it can't be fun what's the point Monday 900

a.m. my first call is to Allan Ace Greenberg on the trading floor of Bear Sterns a major Wall Street Investment Banking firm Allen is the CEO of Bear Sterns he's been my investment banker for the past five years and he's the best there is two weeks ago we began buying stock in Holiday inss it was selling in the 50s as of this morning Allan tells me I own just over one million shares or slightly more than 4% of the company the stock closed Friday at $65 a share mostly Allan says because word is out on

the street that I've been A big buyer and there's speculation I am planning a run at the company the truth is I'm keeping my options open I may ultimately go for a control of holiday which I think is somewhat undervalued at the current stock price I could get control for less than $2 billion holidays three casino hotels could be worth nearly that much and the company owns another 300,000 hotel rooms besides a second option if the stock price goes high enough is to sell my Stake and take a very nice profit if I did that

today I'd already be up about $7 million the third possibility is that holiday may eventually offer to buy back my shares at a premium simply to get rid of me if the premium is big enough I'll sell in any case I enjoy seeing the lengths to which bad managements go to preserve what they call their independence which really just means their job S 9:30 a.m. Abraham herfeld calls me looking for advice Abe is a successful real estate developer but he wants to be a politician unfortunately for Abe he's a far better developer than politician this

fall Abe tried to run for lieutenant governor against Governor Cuomo's handpick candidate Stan line Cuomo led a court fight to get herfeld off the ballot on technical grounds and sure enough halfway into the campaign the court Court ruled herfeld Out Abe knows I'm friendly with the governor and he wants my advice now on whether he should endorse Cuomo or switch parties and endorse Cuomo's opponent I tell him it's a no contest question stick with a winner and a good guy at that we set a meeting for Thursday 10: amm I called Don Imus to thank

him Imus has one of the most successful radio shows in the United States on wnbc and he's been helping to raise money for the Annabel Hill fund I'm amazed at how this has snowballed into such a media event it began last week when I saw a national news report by Tom broka about this adorable little lady from Georgia Mrs Hill who was trying to save her farm from being foreclosed her 67-year-old husband had committed suicide a few weeks earlier hoping his life insurance would save the farm which had been in the family for Generations but

the insurance proceeds weren't nearly enough it was a very sad Situation and I was moved here were people who'd worked very hard and honestly all their lives only to see it all crumble before them to me it just seemed wrong through NBC I was put in touch with a wonderful guy from Georgia named Frank argenbright who'd become very involved in trying to help Mrs Hill Frank directed me to the bank that held Mrs Hill's mortgage the next morning I called and got some vice president on The line I explained that I was a businessman from

New York and that I was interested in helping Mrs Hill he told me he was sorry but that it was too late they were going to auction off the farm he said and nothing or no one is going to stop it that really got me going I said to the guy you listen to me if you do foreclose I'll personally bring a lawsuit for murder against you and your bank on the grounds that you harassed Mrs Hill's husband to his death all of a Sudden the bank officer sounded very nervous and said he'd get right

back to me sometimes it pays to be a little wild an hour later I got a call back from the banker and he said don't worry we're going to work it out Mr Mrs Hill and Frank arganbright told the media and the next thing I knew it was the lead story on the network news by the end of the week we'd raised $40,000 Imus alone raised almost $20,000 by appealing to his list Listeners as a Christmas present to Mrs Hill and her family we've scheduled a mortgage burning ceremony for Christmas Eve in the atrium of

Trump Tower by then I'm confident we'll have raised all the money I promised Mrs Hill that if we haven't I'll make up any difference I tell Imus he's the greatest and I invite him to be my guest one day next week at the tennis matches at the US Open I have a Courtside box and I used to go myself almost every day now I'm so busy I Mostly just send my friends 11:15 a.m. Harry Usher the commissioner of the United States football league calls last month the jury in the antitrust suit we brought against the

National Football League ruled that the NFL was a monopoly but awarded us only token damages of $1 I've already let the better players on my team the New Jersey generals sign with the NFL but the ruling was is ridiculous we argue about the approach we should take I want to be More aggressive what worries me I say to Harry is that no one is pushing hard enough on an appeal 12:00 noon Jerry shonfeld head of the Schubert organization the biggest Broadway Theater owners calls to recommend a woman for a job as an office administrator he

tells me the woman specifically wants to work for Donald Trump and I say she's crazy but I'll be happy to see her we talk a little about the theater business and I tell Jerry I'm about to take my kids to see Cats one of his shows for a second time he asks if I'm getting my tickets through his office I tell him that I don't like to do that sort of thing don't be silly he says we have a woman here whose job it is to handle tickets for our friends here's her number don't hesitate

to call it's a nice gesture from a very nice guy 1:15 p.m. Anthony gedman stops by to discuss the wman rink project Gedman was housing commissioner under Ed kooch at the time we fought a lot and even though I ended up beating him in court I always thought he was bright I don't hold it against people that they have opposed me I'm just looking to hire the best talent wherever I can find it Tony has been helping to coordinate the rebuilding of the wolman skating rink in Central Park a project the city failed at so

miserably for seven years in June I offered to do the job myself now we're Ahead of schedule and Tony tells me that he set up a press conference for Thursday to celebrate the last important step in construction pouring the concrete it doesn't sound like much of a news event to me and I ask him if anyone is likely to show up he says at least a dozen news organizations have rsvped yes so much for my news judgment 2 pm I get deposed in a lawsuit we've brought against a Contractor on Trump Tower halfway into the

job we had To f the company for total incompetence and we're suing for damages I hate lawsuits and depositions but the fact is that if you're right you got to take a stand or people will walk all over you in any case there's no way I could avoid depositions even if I never brought a lawsuit myself nowadays if your name is Donald Trump everyone in the world seems to want to sue you 3M I ask Norma furer my executive assistant and the person who keeps my Life organized to bring me lunch a can of tomato

juice I rarely go out because mostly it's a waste of time 3:15 p.m. I put in a call to Sir Charles Goldstein he's out and I leave a message he's a successful real estate attorney but not one of my favorites I'm pretty sure Charlie Goldstein is from the Bronx but he's a very pompous guy and has a tendency to act like royalty so I call him Sir Charles over the weekend I heard that Lee aokoka had hired Sir Charles to represent him on a deal in Palm Beach where Lee and I intend to be partners

Lee had no way of knowing about my past experience with Sir Charles a while back I was in the middle of making a deal with a guy who needed an attorney and I recommended Sir Charles the next thing I knew Sir Charles was recommending to his client that he not make the deal with me I couldn't believe it this deal is to buy two condominium Towers in the Palm Beach area uh I own a house in Beach a spectacular place called maral Lago uh and one day last winter when I was down for the weekend

I went out to have lunch with some friends on the way a pair of beautiful gleaming White Towers caught my eye I made a couple of calls it turned out they'd been built for about 120 million dollar and a major New York bank had just foreclosed on the developers the next thing I knew I was making a deal to buy the project for $40 Million a mutual friend William fugazi first mentioned that that Lee and I should do a real estate deal together I think Lee is an extraordinary businessman who has done wonders in turning

Chrysler around and I also like him a great deal personally so one thing led to another and we began talking about the towers it's a substantial investment and I'm not certain Lee is absolutely sure yet that he wants to go forward if that's the case it occurs to Me he's done the perfect thing by hiring an attorney I don't like and that's precisely what I intend to tell Sir Charles when he calls me back 3:30 p.m. I call my sister Maryann Barry to discuss a recent decision in a lawsuit we are contesting in Atlantic City

Maryanne is a federal court judge in New Jersey and her husband John is a talented attorney I have used on many occasions can you believe they ruled against us I asked her Maryanne is very Smart she obviously knows a lot more about the law than I do and she's as surprised as I am I tell her that I've arranged to have all the materials from the case sent to John immediately because I want him to handle the appeal 4 p.m. I go to our conference room to look at slides of potential Christmas decorations for the

atrium in Trump Tower the spectacular six-story marble Atrium has become one of the leading tourist attractions in New York City More than 100,000 people a week come from all over the world to see it and Shop in it and it's now a symbol of the Trump organization that's why I still get involved in details like what Christmas decorations we should use I don't don't like most of what I'm shown finally I see a huge and magnificent gold wreath for the entrance to the building and decide we should use just that sometimes not often but sometimes

less is more 4:30 p.m Nicholas rbus a New Jersey attorney who handled the licensing of both my Atlantic City casinos calls to say he's about to leave for Sydney Australia to pursue a deal I'm considering he tells me it's a 24-hour flight and I tell him I'm very glad he's is going instead of me the deal however may be worth the trip the government of New South Wales is in the midst of choosing a company to build and operate what they Envision as the world's largest casino we're a front Runner for the job and Nick

is going over to meet with the key government people he tells me he'll call from Australia as soon as he has any news 5:15 p.m. I call Henry kingburg the NBC executive in charge of choosing a new site for the Network's headquarters we've been cour NBC for more than a year trying to get them to move to our Westside yard site 78 Acres along the Hudson River that I bought a year ago and on which I've announced Plans to build the world's tallest building I know Henry has just been shown our latest plans for the

site and I'm following up I mentioned that Bloomingdales is dying to become the anchor store in our shopping center which will give it real Prestige I also tell him the city seems very excited about our latest plans then I say we expect to get our preliminary approvals in the next several months cburg seems enthusiastic before I get off I also put In a plug for NBC's locating its offices in the world's tallest building think about it I say it's the ultimate symbol 5:45 p.m. my 9-year-old son Donnie calls to ask when I'll be home I

always take calls from my kids no matter what I'm doing I have two others Ivanka 6 and Eric 3 and as they get older being a father gets easier I adore them all but I've never been great at playing with toy trucks and Dolls now though Donnie is beginning to get interested in buildings and real estate and sports and that's great I tell Donnie I'll be home as soon as I can but he insists on a Time perhaps he's got my jeans the kid won't take no for an answer 6:30 p.m. after several more calls

I leave the office and take the elevator upstairs to my apartment in the residential part of Trump Tower of Course I have a tendency to make a few more calls when I get home Tuesday 9:00 am I call Ivan bosi bosi is an arbitrageur but he and his wife are also the majority owners of the Beverly Hills Hotel and I've just read that he's decided to sell it I have no idea when I call that just two weeks from now bosi will plead guilty to insider trading and that the real reason he's eager to sell

the hotel is that he needs needs to Raise cash fast my idea is to hire Steve rubel and Ian shreer the creators of Studio 54 in the Palladium to run the Beverly Hills Hotel for me Steve's an incredible promoter and he'd make the hotel hot as hell again I get bosi and tell him I'm very interested he tells me Morgan Stanley and Company is handling the deal and I will get a call from their people shortly uh I like Los Angeles I spent a lot of weekends there during the 19 1970s and I always stayed

at the Beverly Hills but I won't let my personal preferences affect my business judgment much as I like the hotel I'm interested in it only if I can get it for a much better price than they're now asking 9:30 a.m. Allan Greenberg calls we' bought another 100,000 shares of holiday and the stock is up another point and a half trading is very active I tell Allan I've heard that the top guys at holiday are in a panic and that they're holding Emergency meetings to disc discuss how to react to me Allan says that he thinks

holiday will enact some kind of poison pill as a way of fending off any attempts I make at a hostile takeover our call lasts less than two minutes that's one thing I love about Allan he never wastes time 10:00 a.m. I meet with the contractors in charge of building my two 700 space parking garage and Transportation Center across the street from uh Trump Plaza on the Boardwalk in Atlantic City it's a $30 million job and they're here to give me a progress report they tell me we're on schedule and under budget the garage will be

ready in time for Memorial Day 1987 the biggest weekend of the Year in Atlantic City and it's going to increase our business enormously right now we are doing well with virtually no parking the new lot is located at the end of the main road leading to the boardwalk and it's connected by a walkway to our Casino anyone who parks in the garage funnels directly into our facility 10:00 a.m. I meet with the contractors in charge of building my two 700 space parking garage and Transportation Center across the street from uh Trump Plaza on the Boardwalk

in Atlantic City it's a $30 million job and they're here to give me a progress report they tell me we're on schedule and under budget the garage will be ready in time for Memorial Day 1987 the biggest weekend of the Year in Atlantic City and it's going to increase our business enormously right now we are doing well with virtually no parking the new lot is located at the end of the main road leading to the boardwalk and it's connected by a walkway to our Casino anyone who parks in the garage funnels directly into our facility

12:15 p.m. Norma comes in and tells me that we have to switch the wman rink press conference from Thursday to Wednesday Henry Stern the New York New York City Parks commissioner has a conflict on Thursday he is also scheduled to dedicate a new Central Park playground on the Upper West Side underwritten by Diana Ross the singer the problem is that there's no way we can move our concrete pouring which was why we called the press conference in the first place but what the hell i'll wing it and things will work out I'm reluctant to give

Henry a hard time last week my security Force refused to let Him into wolman without my permission this was taking good security a step too far as you can imagine Henry wasn't thrilled 12:45 p.m. Jack mitnik my accountant calls to discuss the tax implications of a deal we're doing I ask him how bad he thinks the new federal tax law is going to be for Real Estate since it eliminates a lot of current real estate writeoffs to my surprise mitnik tells me he thinks the law is an overall Plus for me since much of my

Cash flow comes from casinos and Condominiums and the top tax rate on earned income is being dropped from 50 to 32% however I still believe the law will be a disaster for the country since it eliminates the incentives to invest and build particularly in secondary locations where no building will occur unless there are incentives 1:30 p.m. I tell Norma to call John Danforth the Republican Senator from Missouri I don't know Danforth personally but he's one of the few Senators who fought hard against the new tax bill it's probably too late but I just want to

congratulate him on Having the courage of his convictions even though it might cost him politically uh Danforth isn't in but his secretary says he'll call back 1:45 PM Norma sees an opening between calls and she comes in to ask me about several invitations Dave Winfield The New York Yankee Outfield has asked me to be the chairman of a dinner to benefit his foundation which fights drug abuse I'm already chairing two dinners this month one for United Cerebral paly and the other for the Police Athletic League I don't Kid myself about why I'm asked to speak

at or chair so many events it's not because I'm such a great guy the reason is that the people who run Charities know that I've got wealthy friends and can get them to buy tables I Understand the game and while I don't like to play it there is no graceful way out however I've already hit up my friends twice this month and there's only so many times you can ask people to donate $10,000 for a table I tell Norma to turn Windfield down with regrets the other invitation is from The Young president's organization asking me

to speak at a dinner they're having YPO admits businessmen under the age of 40 who are Chief Executives of their companies I turned 42 months ago so in their eyes I guess I now qualify as an elder state Norma also asked me about a half dozen party invitations I say yes to two one is being given by Alice Mason the real estate broker who has managed to turn herself into a major socialite by getting the hottest people to come to her parties the other is a reception for two wonderful people Barbara Walters of ABC and

Merv adelen the head of Lori Mah Tele pictures who were married a few months ago in California frankly I'm not too big on parties because I can't stand Small Talk unfortunately they're part of doing business so I find myself going to more than I'd like and then trying hard to leave early a few fortunately I enjoy but more often I will accept an invitation many months in advance thinking the date is so far off that it will never arrive when it does I get mad at myself for having accepted in the First place by then

it's usually too late to pull out 2: p.m I get an idea and call Allan Greenberg again my idea is based on the fact that if I make a takeover move against holiday I have to get licensed as a casino operator in Nevada where holiday owns two casinos what do you think I ask him about just selling out holiday shares right now taking a profit and then rethinking a takeover bid after I get Licensed Allan argues for holding tight with what we've got I say okay for now I like to keep as many options open

as I can 2:15 p.m John Danforth calls back we have a nice talk and I tell him to keep up the good work 2:30 p.m. I return a call from one of the owners of the Dunes Hotel in Las Vegas they also own perhaps the best undeveloped site on the Vegas Strip for the right price I'd consider buying it I Like the casino business I like the scale which is huge I like the Glamour and most of all I like the cash flow if you know what you are doing and you run your operation reasonably

well you can make a very nice profit if you run it very well you can make a ton of money 245m my brother Robert and Harvey Freeman both Executive Vice Presidents in my company sto by to report on a meeting they've had that day with Khan Edison and Executives from NBC about the Westside Yards Project ConEd has a large Smoke Stack on the southern end of the site and the meeting was to discuss whether the fumes from the stack would dissipate as effectively if a large building goes up adjacent to it Robert who is two

years younger than I am is softspoken and easygoing but he's very talented and effective I think it must be hard to have me for a brother but he's never said anything about it and we're very close he is definitely the Only guy in my life whom I ever call Honey Robert gets along with almost everyone which is great for me since I sometimes have to be the bad guy hary is a different type No Nonsense not too big on laughs but he's got an absolutely brilliant analy antic mind the ConEd people I'm happy to hear

um told the NBC Executives that there is no reason to believe the presence of the NBC building will affect the Smoke Stack unfortunately Con Ed won't be the last Word before we can get our approvals we'll have to get an independent environmental impact statement 3:15 p.m. I call Herbert Stewarts of the City Planning Commission which will be the first city agency to approve or disapprove our l plan for the West Side yards sturs and his people are scheduled to have a preliminary look on Friday he isn't in so I leave a message with his secretary

I just say I'm looking forward to seeing him Friday morning 3:20 p.m. Gerald shreer calls Jerry's a top attorney at drer and TR one of the best real estate firms in the country and he's handled nearly every one of my major deals since I bought the Commodore Hotel back in 1974 Jerry is more than an attorney he's an absolute business machine and he can see through to the essence of a deal as fast as anyone I know we talk about the holiday in situation and several other deals that are in various stages like Alan Greenberg

shrugger isn't big on wasting time we cover a half dozen subjects in less than 10 minutes 3:30 p.m. my wife Ivana stops in to say goodbye she's on her way to Atlantic City by helicopter I like to kid her that she works harder than than I do last year when I bought my second Casino from the Hilton Corporation and renamed it Trump's Castle I decided to put Ivana in charge she's incredibly good at anything She's ever done a natural manager Ivana grew up in Czechoslovakia an only child her father was an electrical engineer and a

very good athlete and he started Ivana skiing very early by the age of six she was winning medals and in 1972 she was an alternate on the Czechoslovakian ski team at the saporo Winter Olympics a year later after graduating from Charles University in Prague she moved to Montreal and very quickly Became one of the top models in Canada we met at the Montreal Summer Olympic Games in August 1976 I dated a lot of different women by then but I'd never gotten seriously involved with any of them Ivana wasn't someone you dated casually 10 months later

in April 1977 we were married almost immediately I gave her responsibility for the interior decorating on the projects I had underway she did a great job Ivana may Be the most organized person I know in addition to raising three children she runs our three homes the apartment in Trump Tower maralago and our home in Greenwich Connecticut and now she also manages Trump's Castle which has approximately 4,000 employees the castle is doing great but I still give aana a hard time about the fact that it's not yet number one I tell her she's got the biggest

facility in town so by All rights it should be the most profitable Ivana is almost as competitive as I am and she insists she's at a disadvantage with the castle she says she needs more sweets she isn't concern that building the Suites will cost $40 million all she knows is that not having them is hurting her business and making it tougher for her to be number one I'll say this much I wouldn't bet again G her 3:45 p.m. the Executive Vice President for marketing at the Cadillac division of General Motors is on the phone he's

calling at the suggestion of his boss John grettenberger the president of the Cadillac Motors division whom I know from Palm Beach Cadillac it turns out is interested in cooperating in the production of a new super stretch limousine that would be named the Trump golden series I like the idea we set a to sit down and talk in two weeks 4M Daniel Lee a casino analyst for Drexel Burnham Lambert stops by with several of His colleagues to discuss being my investment bankers on a deal to purchase a hotel company Michael milin the guy who invented junk

bond financing at Drexel has called me regularly for the last several years to try to get me to bring my business to Drexel I have no idea that Drexel is about to get in meshed in the insider trading Scandal that will soon Rock Wall Street in any case I happen to think Mike's a brilliant guy however alen Greenberg is Exceptional himself and I'm loyal to people who've done good work for me I hear Lee and his guys out on their deal but in truth it doesn't excite me much we leave it that I'll get back

to them 5:00 pm Larry chonka former running back for the Miami Dolphins calls he has an idea for keeping the usfl alive he wants to merge it with the Canadian Football League Larry's both a bright and a nice guy uh and he's very enthusiastic but he doesn't convince Me if the usfl couldn't get off the ground with players like hersel Walker and Jim Kelly how is Canadian football with a lot of players nobody has heard of going to help we've got to win in the courts first to break up the NFL Monopoly 530 p.m. I

call Calvin Klein the designer to congratulate him back when Trump Tower first opened Klein took a full floor of offices for his new perfume line Obsession it did so well that within a year he expanded to a Second floor now he's doing better than ever and so he's taking over a third floor I have a lot of admiration for Calvin and I tell him so he's a very talented designer but he's also a very good salesman and businessman and it's the combination of those qualities that makes him so successful 6 PM I draft a letter

to Paul goldberger architecture critic of the New York Times a week ago in a Sunday column goldberger gave a great review to The design of Battery Park City the new development in lower Manhattan he also called it a stunning contrast to what he claimed were doing with the television city project at the Westside yards in other words he killed us there's just one catch we're in the middle of Designing our project with new Architects and Concepts and nobody including goldberger has seen our new plan he was knocking a design he hadn't even looked at yet

dear Paul I write Your recent article is an obvious setup in preparation for the negative review you intend to do on television City no matter how great it is just think if you are negative enough which I'm sure you will be you might even help convince NBC to move to New Jersey my people keep telling me I shouldn't write letters like this to critics the way I see it critics get to say what they want to about my work so why shouldn't I be able to say what I Want to about theirs Wednesday 9:00 a.m.

I go with aana to look at a private school for my daughter if you had told me five years ago that I'd be spending mornings looking at kindergarten classrooms I would have laughed 11:00 a.m. I have a press conference for the Walman rink when I get there I'm amazed there are at least 20 reporters and photographers Milling around hey Henry Stern the parks Commissioner goes to the microphone first and he is very complimentary to me he says that if the city had tried to undertake the current renovation by itself we would now be awaiting Board

of estimate approval for what Donald Trump has already done when it's my turn I explain that we've laid 22 miles of pipes that they've all been thoroughly tested and there are no leaks that the project is ahead of schedule by at least a month and under budget by about $400,000 I also announced that we've set a grand opening for November 13th and that we have a show planned for that day which will include most of the world's great skaters after I finish the reporters ask a million questions finally Henry and I step down into the

rink if we can't have a real concrete pouring at least we'll have a ceremonial one a couple of workmen pull over a wheelbarrow full of wet concrete and point it down toward us Henry and I Shovel some concrete onto the pipes while the photographers click away as many times as I've done these things I have to say I still find them a little ridiculous think of it a couple of guys in pinstriped suits shoveling wet concrete but I like to be accommodating as long as they want to shoot I'll shovel 12:45 p.m. the minute I

get back to my office I start returning calls I want to get as much done as I can now because I have to Leave leave early for Trenton to attend a retirement dinner for a member of the New Jersey casino Control Commission the first person I call back is Arthur Baron the president of gulf and Western's Entertainment Group which includes Paramount Pictures Martin Davis the chairman of g&w has been my friend for a long time and baron apparently called in response to a letter I wrote to Marty two weeks ago in the letter I explained

to Marty that I'd recently purchased a Fantastic site and was in the midst of Designing a building with eight Motion Picture theaters at its base and I wondered if he might be interested in making a deal for them as you are aware I wrote there is no one I would rather do business with than Marty Davis that happened to be true for Martin Davis is a truly talented man but there are also a dozen other companies who would kill to have eight theaters in a top location in other words if I can't make a deal

I Like with Marty I've got a lot of other options as I anticipated when I get art Baron on the phone he wants to set up a meeting to discuss the theaters we make a date for the following week 1:30 p.m. I return a call from Arthur sonen Blick one of the city's leading Brokers three weeks ago Arthur called to say he had some foreign clients who were interested in buying the Westside yards he wouldn't tell me their names but he said they were serious people and They were prepared to make me a very substantial

offer for the site far more than the $100 million I paid a year ago I didn't get too excited on the contrary I say to Arthur the bid sounds low if you can get them higher I might be interested now Arthur's calling to give me a status report the truth is I really don't want to sell the yards at any price to me those 100 acres overlooking the Hudson River are the best undeveloped real estate site in the World on the other hand I don't want to rule out anything Arthur tells me his clients are

still very interested that they may come up a little but he doubts they'll go much higher keep pushing I tell him 2 p.m the contractor who's building my pool at Mara Lago is on the phone I'm busy but I take the call anyway we're going to Great Lengths to build a pool in keeping with the original design of The house and I want to make sure every detail is Right buying maral laga was a great deal even though I bought it to live in not as a real estate investment maral laga was built in the

early 1920s by Marjorie Merryweather post the ays to the post serial fortune and at the time Mrs Edward F Hutton set on 20 acres that face both the Atlantic Ocean and lak worth the house took four years to build and has 118 rooms three boatloads of Dorian Stone were brought from Italy for The exterior walls and 36,000 Spanish tiles dating back to the 15th century were used on the exterior and the interior when Mrs post died she gave the house to the federal government for use as a presidential Retreat the government eventually gave the house

back to the post foundation and the foundation put it up for sale at an asking price of $25 million I first looked at maralago while vacationing in Palm Beach in 1982 almost immediately I put in a bid Of $15 million and it was promptly rejected over the next few years the foundation signed contracts with several other buyers at higher prices than I'd offered only to have them fall through before closing each time that happened I put in another bid but always at a lower sum than before finally in late 1985 I put in a cash

offer of $5 million plus another $3 million for the Furnishings in the house apparently the foundation was tired of broken Deals they accepted My offer and we closed one month later the day the deal was announced the Palm Beach Daily News ran a huge front page story with the headline Mart Al lago's bargain price Rocks Community soon several far more modest Estates on property a fraction of maralago size sold for prices in excess of $18 million I've been told that the Furnishings in maral Lago alone are worth more than I paid for the house it

just goes to show that it pays to move Quickly and decisively when the time is right upkeep of Mara Lago of course isn't cheap for what it costs each year you could buy a beautiful home almost anywhere else in America all of which is a long way of explaining why I take this call from the pool contractor he has a small question about the matching of the Dorian Stone we're using for the decking and I care about every detail when it comes to maral Lago the call takes two minutes but it will probably save two

Days of work and ensure that the job doesn't have to be ripped out and done over later 2:30 p.m. a prominent businessman who does a lot of business with the Soviet Union calls to keep me posted on a construction project I'm interested in undertaking in Moscow the idea got off the ground after I sat next to the Soviet ambassador Yuri dubinan at a luncheon held by Leonard Lauder a great businessman who is the son of Estee Lauder duan's daughter it turned Out had read about Trump Tower and knew all about it one thing led to

another and now I'm talking about building a large luxury hotel across the street from the Kremlin in partnership with the Soviet government they have asked me to go to Moscow in July 3 P.M Robert stops in and we talk about several issues relating to NBC and the Westside yards 3:30 p.m. a friend from Texas calls to tell me about a deal he's got working he happens to be a very Charming guy Wonderful looking wonderfully dressed with one of those great Texas draws that make you feel very comfortable he calls me Donnie a name that I

hate but which he says in a way that somehow makes it okay two years ago this same friend called me about another deal he was trying to put together a group of wealthy people to take over a small oil company Donnie he said I want you to invest 50 million this is a no lose proposition you'll double or triple your Money in a matter of months he gave me all the details and it sounded very good I was all set to go forward the papers were being drawn up and then one morning I woke up

and it just didn't feel right I called my friend back and I said you know listen there's something about this that bothers me maybe it's that oil is underground and I can't see it or maybe it's that there's nothing creative about it in any case I just don't want to go In and he said okay Donnie it's up to you but you're missing a great opportunity the rest is history of course oil went completely to Hell several months later the company his group bought went bankrupt and his investors lost every dime they put up that

experience taught me a few things one is to listen to your gut no matter how good something sounds on paper the second is that you're generally better off sticking with what you know and the Third is that sometimes your best investments are the ones you don't make because I held back I saved $50 million and the two of us have remained friends as a result I don't want to reject him outright on his new deal instead I tell him to send up the papers in reality I'm not too likely to get involved 4M I call

back Judith CR you've got to give it to her how many authors have written three number one best-selling books in a row she also happens to be a very nice woman Trump Tower is the setting for her latest novel I'll Take Manhattan and I'm a character in the book at Judy's request I agreed to play the role of myself in a scene from the miniseries based on her book and filmed at Trump Tower now Judy is calling to say that the scene with Valerie Bertinelli came off well I'm happy to hear it although I'm not

about to quit my day job still I figure it's not a bad way to promote Trump Tower on National Television in a minseries that runs during sweeps week and is virtually guaranteed to get huge national ratings 4:30 pm my last call is to Paul hallingby a partner at Bear Sterns who handled the $550 million in bond issues we did successfully for our two casinos in Atlantic City during 1985 now we're talking about setting up something called the Trump fund through which we'd buy distressed and foreclosed Real estate particularly in the southwest at Bargain Basement prices

hallingby tells me that he's putting together a prospectus and that he's confident will easily be able to raise $500 million in a public offering now what I like about the deal is that I'd retain a large Equity position in any purchase we made but I wouldn't be at any personal risk in the event that any of the deals went bad what I don't like is the idea of Competing with myself what happens for example if I see a piece of distressed property that I want to buy on my own but that might also be good

for the fund in any case I'll look at the perspective 5:00 p.m. I'm driven to the 60th Street heliport in time to catch a helicopter and be in Trenton for cocktails at 5:30 p.m. Thursday 900 a.m. I sit down with Abe hersfeld basically Abe feels hurt that Governor qumo personally led a fight to push him off the ballot I tell Abe I understand how he feels but that the governor is a good guy and that in any event it would look ridiculous for Abe who is a Democrat to suddenly turn around now and endorse a

republican I also point out that as a practical matter Cuomo is going to win re-election by a landslide and that it's a lot better decide with a winner than a loser Abe is a pretty stubborn guy but Finally he says look why don't you get the governor to call me I tell him I'll do my best Abe has always been considered difficult but I like him and his family a lot 10:15 a.m. Alan Greenberg calls the market is down 25 points less than an hour after opening Allan tells me everyone's a seller that nearly all

stocks are down but that holiday is holding firm I can't decide whether I should be happy or sad part of me wants Holiday to drop off so I can buy more at a better price the other part of me wants it to go up because at this point every time the stock Rises a point I make a lot of easy money 10:30 a.m. Harvey meerson the attorney who handled our usfl antitrust case comes in for a meeting Harvey is an incredible trial lawyer he took a case in which no one gave us a prayer going

in and he managed to win on antitrust grounds even though we were awarded only token damages even So I've wondered since the trial whether perhaps Harvey was just a little too sharp for some of the jurors every day he'd show up in one of his beautiful pinstripe suits with a little handkerchief in his pocket and I'm just not sure how well that went over overall I think he did as good a job as anyone could and I still believe he's our best Hope on the appeal one thing I like about Harvey is his enthusiasm he's

still absolutely convinced he's going to Win the appeal 11:30 a.m. stepen Hyde calls after I bought out you know holiday in's interest in the Trump Plaza Hotel and Casino in Atlantic City and took over the management in June I hired Steve to run the facility Steve had been working as a vice president for Steven a win at the golden nugget wi is one of the best gaming guys around and My Philosophy is always to hire the best from the best After a long running negotiation I offered Hyde a bigger job and more money and he

said yes I think he also liked the idea of working for me and he didn't mind leaving Steve wi wi is very slick and smooth but he's also a very strange guy a couple of weeks ago he called and said Donald I just wanted to let you know that my wife and I are getting divorced so I said oh I'm sorry to hear that Steve he said oh don't be sorry it's great we're still in love it's just That we don't want to be married anymore in fact she's right here with me do you want

to say hello I politely declined Hyde is calling to report on the August figures for the plaza which just came in he tells me that gross operating profit was just over 9,38 th000 compared with $3,438 th000 for the same period a year ago when I was still partner with holiday inss and they were managing the facility not too bad I say to Steve Considering we still don't have any parking still I can't resist razing him a little now all you've got to do is get the hotel in mint condition wi is very slick and smooth

but he's also a very strange guy a couple of weeks ago he called and said Donald I just wanted to let you know that my wife and I are getting divorced so I said oh I'm sorry to hear that Steve he said oh don't be sorry it's great we're still in love it's just that We don't want to be married anymore in fact she's right here with me do you want to say hello I politely declined Hyde is calling to report on the August figures for the plaza which just came in he tells me that

gross operating profit was just over 9,38 th000 compared with $3,438 th000 for the same period a year ago when I was still partners with holiday inss and they were managing the facility Not too bad I say to Steve considering we still don't have any parking still I can't resist razing him a little now all you've got to do is get the hotel in mint condition I'm a stickler for cleanliness and last time I visited the hotel I wasn't totally happy we're working on it Donald Steve says good-naturedly it's already improving 12:00 noon I walk over

to the wman rink to watch the pouring of the concrete this morning all of the papers Had stories about our press conference when I get to the rink it's surrounded by a convoy of cement trucks lined up as if they're in a military operation hrh the construction company in charge of the project has done a fantastic job moving things along but this has to be the most incredible site yet thousands of pounds of wet concrete being poured from truck after truck into this huge rink it's like watching the world's biggest cake get iced even though

the Press conference was yesterday I noticed photographers and Camera Crews all over the place this is the event everyone was waiting for 1:30 p.m. I sit down with a reporter from Fortune who is doing a story about real estate and the new tax laws with me on the cover contrary to what a lot of people think I don't enjoy doing press I've been asked the same questions a million times now and I don't particularly like talking about my personal life nonetheless I understand That getting press can be very helpful in making deals and I don't

mind talking about them I just try to be very selective Norma must turn down 20 requests a week from all over the world also when I do give an interview I always keep it short this reporter is in and out in less than 20 minutes if I didn't limit myself I could spend my life talking to the Press 2:45 p.m. a friend of mine a highly successful and very well-known Painter calls to say hello and to invite me to an opening I get a great kick out of this guy because unlike some artists I've met

he's totally unpretentious a few months back he invited me to come to his Studio we were standing around talking when all of a sudden he said to me do you want to see me earn $25,000 before lunch sure I said having no idea what he meant he picked up a large open bucket of paint and splashed some on a piece of canvas stretched on the floor Then he picked up another bucket containing a different color and splashed some of that on the canvas he did this four times and it took him perhaps two minutes when

he was done he turned to me and saidwell that's it I've just earned $25,000 let's go to lunch he was smiling but he was also absolutely serious his point was that plenty of collectors wouldn't know the difference between his two-minute art and the paintings he Really cares about they were just interested in buying his name I've always felt that a lot of Modern Art is a con and that the most successful painters are often better salesmen and promoters than they are artists I sometimes wonder what would happen if collectors knew what I knew about my

friends work that afternoon the art world is so ridiculous that the Revelation might even make his paintings more Valuable not that my friend is about to risk finding out 4 p.m. a group of us meet in our conference room to go over the latest plan plans for the Westside Yards Project which we're scheduled to show to the city tomorrow morning it turns out that herb STS of the Planning Commission won't be able to attend but his key people will be there there are perhaps 15 people at this meeting including Robert and Harvey Freeman and Alexander

Cooper and his team Alex is the architect city planner I hired two months ago to take over the design of the project after it became clear that my original architect helmet John just wasn't making it with the City I don't know if the reason was his Germanic style or the fact that he is based in Chicago rather than New York or just that he's a little too slick I do know that he wasn't getting anywhere with the City Planning Commission Alex by Contrast was formerly a city planner himself and he's almost a legend in that

office he's also the guy who designed Battery Park City which has gotten great press politically he's a much better choice than Helmut John and I'm a very practical guy we've been meeting like this every week for the past couple of months to hash out a broad plan including where to locate the residential buildings the streets the parks and the shopping mall today Alex Has brought preliminary drawings of the layout we've agreed on at the southern end of the prospective NBC Studios adjacent to the world's tallest building then heading north there are the residential buildings Facing

East over a Boulevard and West over a huge eight block long shopping mall and out at the river every apartment has a great view which I believe is critical I am very happy with the new layout and Alex seems happy too I happen to think the tall buildings are what will make this project special but I'm not naive about zoning eventually I know we're going to have to make some concessions on the other hand if the city won't approve something I think makes sense economically I'll just wait for the next Administration and try again this

site is only going to get more valuable 6: PM I excuse myself because I'm due at an Early dinner and it's not the kind to be late for Ivana and I have been invited by John Cardinal OK Conor to have dinner at St Patrick's Cathedral 7 p.m. no matter whom you've met over the years there is something incredible about sitting down to dinner with the Cardinal and a half dozen of his top Bishops and priests in a private dining room at St Patrick's Cathedral it's hard not to be a little OD we talk about politics

the city real estate and a half dozen other Subjects and it's a fascinating evening as we leave I tell Ivana how impressed I am with the Cardinal he's not only a man of great warmth he's also a businessman with great political instincts Friday 6:30 a.m. I'm leafing through the New York Times when I come to a huge picture of the concrete being poured on to wolman rink it's on the front page of the second section this story just won't quit 9:15 a.m. we meet with the city on The westside Yards Project almost everyone from yesterday's

meeting is there and we are joined by four city planners including Rebecca Robinson and KH how who are directly in charge of evaluating our project Alex does the presentation and he's very good mostly he emphasizes the things we know the city is going to like the public parks the easy access to the Waterfront the ways we've devised to move traffic in and out the only time the density issue Comes up how tall the buildings will be Alex just says we're still working it out when it's over we all agree it went very well 10:30 a.m.

I go back to my office for a meeting to discuss progress on construction at Trump Park the condominium I'm building out of the steel shell of The barbazon Plaza Hotel on Central Park South it's an incredible location and the building we're redoing will be a great success the meeting includes Frank Williams my architect on the project Andrew Weiss the project manager and blanch sprag an executive vice president who is in charge of sales Frank who is very softspoken is a fine architect Blanchette my nickname for her is a classic she's got a mouth that won't

quit which is probably why she's so good at sales I like to tell her that she must be a very tough woman to live with with the truth is I get a great kick out of Her we start by talking about what color to use on the frames of the windows details like these make all the difference in the look and Ambience of a building after almost a half hour we finally agree on a Light Beige that will blend right into the color of the stone I happen to like Earth Tones they are richer and

more elegant than primary colors 11: a.m Frank Williams leaves and we turn to a discussion of the demolition work at Trump Park Andy tells Me it's not finished and that the contractor has just given us a $175,000 bill for extras extras are the costs a contractor adds to his original bid every time you request any change in the plan you initially agreed on you have to be very rough and very tough with most contractors or they'll take the shirt right off your back I pick up the phone and dial the guy in charge of demolition

at Trump Park Steve I say when I get him this is Donald Trump listen you've got to get your ass moving and get finished you're behind I want you to get personally involved in this he starts to give me explanations but I cut him off I don't want to know I just want you to get the job done and get out and listen Steve you're killing me on these extras I don't want you to deal with Andy anymore on the extras I want you to deal with me personally if you try screwing me on this

job you won't be getting a second Chance I'll never hire you again my second concern is the laying of floors I ask Andy for the number of our concrete guy okay I say only half joking I'm GNA take my life in my hands now concrete guys can be extremely rough I get the number two guy on the line look I say to him your boss wanted this contract very badly I was set to give it to someone else but he told me he'd do a great job I walked the site Yesterday and the patches you're

making aren't level with the existing concrete in some places they're as much as a quarter inch off the guy doesn't have any response so I keep talking nobody has the potential to give you more work in the future than Trump I'm going to be building when everyone else has gone bust so do me a favor get this thing done right this time the guy has a response every guy on the job is a pro he says we've given you our best men Mr Trump good I say call me later and let me know how you're

doing 12:00 noon Alan Greenberg calls to tell me that holiday has gone ahead and enacted some poison pill Provisions that will weigh the company down with debt and make it much less attractive as a takeover Target I'm not worried No poison pill is going to keep me from going after holiday in if that's what I decide I want to do the market is still Taking a drubbing it was off 80 points yesterday and it's down another 25 today but holiday is off only a point Allan tells me that we've now bought almost 5% of the

company 125 p.m. blanch stays on after Andy leaves to get me to choose a print advertisement for Trump Park she shows me a half dozen choices and I don't like any of them she is furious blanch wants to use a line drawing that shows the building and its panoramic views of Central Park I like the idea of A line drawing I tell her but I don't like these also I want a drawing that shows more of the building Central Park is great but in the end I'm not selling a park I'm selling a building in

apartments 12:30 p.m. Norma comes in carrying a huge pile of forms I have to sign as part of my application for a Nevada gaming license while I'm signing Norma asks who I want to use as character references I think for a minute and tell her to put down General Pete Dawkins a great Army football hero a terrific guy and a good friend who's now an investment banker at sheers Benjamin Holloway chairman and CEO of Equitable Real Estate Group and Conrad Stevenson of Chase Manhattan Bank also I tell Norma put down John Cardinal o' Conor 12:45

p.m. Avana Rings she's in the office and wants me to go with her to see another school we're considering sending our daughter to next fall come on Donald she says you haven't got Anything else to do sometimes I think she really believes it actually honey I'm a little busy right now I tell her it doesn't work three minutes later she's in my office tugging at my sleeve I finish signing the forms and we go 2:30 p.m. Bill fugazy calls I like to call him Willie the fug but he doesn't seem to appreciate it fugazi's business

is limousines but he really should have been a broker the guy knows everyone he's one of Lee aak coach's best friends And he's the person who Rec recommended to the Cardinal that he meet with me to discuss real estate and get to know each other better fugazi asked me how dinner went last night at St Pat's and I tell him it was great before we hang up we set a golf date for the weekend 2:45 p.m. John delesio the construction manager on my triplex in Trump Tower comes by to discuss the progress he is carrying

drawings except For the third floor where the kids are and the roof where someday I'm going to build a park eight stories up I've gutted the whole apartment in truth I've gone a little overboard first of all I practically doubled the size of what I have by taking over the adjacent apartment what I'm doing is about as close as you're going to get in the 20th century to the quality of versailes everything is made to order for example we had the finest Craftsman in Italy Handcarved 27 solid marble columns for the living room they arrived

yesterday and they beautiful I can afford the finest workmanship and when it comes to my own apartment I figure why spare any expense I want the best whatever it takes I look over the drawings with John and mark up a few changes then I ask him how the job is going not bad he said we're getting there well push John I say push hard 3:30 p.m. a Greek shipping magnate is on the line how's the Shipping business I asked he tells me he has a deal he'd like to discuss he doesn't say what it is

but with certain people you don't ask if it wasn't big I assume he wouldn't waste my time we set a date 4M I get a call from a guy who sells and leases corporate airplanes I've been considering buying a G4 the jet that most corporations use I tell the guy on the phone that I'm still interested in a plane but that he should keep his eye out for a 727 which is what I really want 430 p.m. Nick ribus calls from Australia he tells me things are going very well on our negotiations to be designated

Builder and operator of the world's largest casino Nick fills me in on the details and says that we should know more by the following Monday sounds great I tell him call me before you fly back 4:45 p.m. Norma tells me that David Letterman the talk show host is downstairs in the Atrium of Trump Tower filming a day in the life of two out of town tourists he'd like to know if they could stop up and say hello I I almost never stay up late enough to watch Letterman but I know he's hot I I say

sure five minutes later Letterman walks in along with a cameraman a couple of assistants and a very Nic looking married couple from Louisville we kid around a little and I say what a great town I think Louisville is maybe we should all go in together on A deal there Letterman asked me how much an apartment goes for in Trump Tower I tell him that he might be able to pick up a one-bedroom for 1 million tell me the truth Letterman says after a few minutes of bantering it's Friday afternoon you get a call from us

out of the blue you tell us we can come up now you're standing here talking to us you must not have much to do truthfully David I say you're right absolutely nothing to do Chapter two Trump cods the elements of the deal my style of deal making is quite simple and straightforward I aim very high and then I just keep pushing and pushing and pushing to get what I'm after sometimes I settle for less than I sought but in most cases I still end up with what I want more than anything else I think deal

making is an ability you're born with it's in the genes I don't say that egotistically it's not about being Brilliant it does take a certain intelligence but mostly it's about instincts you can take the smartest kid at Wharton the one who gets straight A's and has an IQ of 170 and if he doesn't have the instincts he'll never be a successful entrepreneur moreover most people who do have the instincts will never recognize that they do because they don't have the courage or the Good Fortune to discover their potential Somewhere Out There are a few Men

with more innate Talent at golf than Jack Nicholas or women with greater ability at tennis than Chris ever or Martina neova but they will never lift a club or swing a racket and therefore will'll never find out how great they could have been instead they'll be content to sit and watch Stars perform on television when I look back at the deals I've made and the ones I've lost or let pass I see certain common elements but unlike the real estate Evangelists you see all over television these days I can't promise you that by following the

precepts I'm about to offer you'll become a millionaire overnight unfortunately life rarely works that way and most people who try to get rich quick end up going broke instead as for those among you who do have the genes who do have the instincts and who could be highly successful well I still hope you won't follow my advice because that Would just make it a much tougher world for me think big I like thinking big I always have to me it's very simple if you're going to be thinking anyway you might as well think big most

people think small because most people are afraid of success afraid of making decisions afraid of winning and that gives people like me a great Advantage my father built lowincome and middle- inome buildings in Brooklyn and Queens but even then I gravitated to the Best location when I was working in Queens I always wanted Forest Hills and As I Grew Older and perhaps wiser I realized that Forest Hills was great but Forest Hills isn't Fifth Avenue and so I began to look toward Manhattan because at a very early age I had a true sense of what

I wanted to do I wasn't satisfied just to earn a good living I was looking to make a statement I was out to build something Monumental something worth a big effort plenty of Other people could buy and sell little Brownstones or build cookie cutter red brick buildings What attracted me was the challenge of building a spectacular development on almost 100 acres by the River on the west side of Manhattan or creating a huge new hotel next to Grand Central Station at Park Avenue in 42nd Street the same sort of challenge is What attracted me to

Atlantic City it's nice to build a successful Hotel it's a lot better to build a hotel attached to A huge casino that can earn 50 times what you'd ever earn renting hotel rooms you're talking a whole different order of magnitude one of the keys to thinking big is Total Focus I think of it almost as a controlled Neurosis which is a quality I've noticed in many highly successful entrepreneurs they're obsessive they're driven they're single-minded and sometimes they're almost maniacal but it's all channeled into their work where other people are Paralyzed by Neurosis the people I'm

talking about are actually helped by it I don't say this trait leads to a happier life or a better life but it's great when it comes to getting what you want this is particularly true in New York real estate where you are dealing with some of the sharpest toughest and most vicious people in the world I happen to love to go up against these guys and I love to beat Them protect the downside and the upside will take care of itself people think I'm a gambler I've never gambled in my life to me a gambler

is someone who plays slot machines I prefer to own slot machines it's a very good business being the house it's been said that I believe in the power of positive thinking in fact I believe in the power of negative thinking I happen to be very conservative in business I always go into the deal anticipating the Worst if you plan for the worst if you can live with the worst the good will always take care of itself the only time in my life I didn't follow that rule was with the usfl I bought a losing team

in a losing league on a long shot it almost worked through our antitrust suit but when it didn't I had no fallback the point is that you can't be too greedy if you go for a home run on every pitch you're also going to strike out a lot I try never to leave myself too exposed Even if it means sometimes settling for a triple a double or even on rare occasions a single one of the best examples I can give is my experience in Atlantic City several years ago I managed to piece together an incredible

site on the boardwalk the individual deals I made for Parcels were contingent on my being able to put together the whole site until I achieved that I didn't have to put up very much money at all once I assembled the site I didn't Rush to start construction that meant I had to pay the carrying charges for a longer period but before I spent hundreds of millions of dollars and several years on construction I wanted to make sure I got my gaming license I lost time but I also kept my exposure much lower when I got

my licensing on the boardwalk site holiday inss came along and offered to be my partner some people said you don't need them why give up 50% Of your profits but holiday inss also offered to pay back the money I already had in the deal to finance all the construction and to guarantee me against losses for five years my choice was whether to keep all the risk myself and Own 100% of the casino or settle for a 50% stake without putting up a dime it was an easy decision Baron Hilton by contrast took a bolder approach

when he built his Casino in Atlantic City in order to get opened as quickly as Possible he filed for a license and began construction on a $400 million facility at the same time but then two months before the Hotel was scheduled to open Hilton was denied a license he ended up selling to me at the last minute under a lot of pressure and without a lot of other options I renamed the facility Trump's Castle and it is now one of the most successful hotel casinos anywhere in the world maximize your Options I also protect myself

by being flexible I never get too attached to one deal or one approach for starters I keep a lot of balls in the air because most deals fall out no matter how promising they seem at first in addition once I made a deal I always come up with at least a half dozen approaches to making it work because anything can happen even into the best laid plans for example if I hadn't gotten the approvals I wanted for Trump Tower I could always have Built an office tower and done just fine if I'd been turned down

for Licensing in Atlantic City I could have sold the site I'd assembled to another casino operator at a good profit perhaps the best example I can give is the first deal I made in Manhattan I got an option to purchase the Penn Central Rail Yards at West 34th Street my original proposal was to build middle- inome housing on the site with government financing unfortunately the city began To have financial problems and money for public housing suddenly dried up I didn't spend a lot of time feeling sorry for myself instead I switched to my second option

and began promoting the site as ideal for a Convention Center it took two years of pushing and promoting But ultimately the city did designate my site for the convention center and that's where it was built of course if they hadn't chosen my site I would have come up with a the thirdd Approach know your Market some people have a sense of the market and some people don't Steven Spielberg has it leak coka of Chrysler has it and so does Judith CR in her way Woody Allen has it for the audience he cares about reaching and

so does Sylvester Stallone at the other end of the spectrum some people criticize Stallone but you got to give him credit I mean here's a man who is just 41 years old and he's already created two of the Alltime great characters Rocky and Rambo to me he's a diamond in the rough type a genius purely by Instinct he knows what the public wants and he delivers it I like to think I have that instinct that's why I don't hire a lot of number crunchers and I don't trust fancy marketing surveys I do my own surveys

and draw my own conclusions I'm a great believer in asking everyone for an opinion before I make a decision it's a natural reflex if I'm thinking of Buying a piece of property I'll ask the people who live nearby about the area what they think of the schools and the crime and the shops when I'm in another city and I take a cab I'll always make it a point to ask the cab driver questions I ask and I ask and I ask until I begin to get a gut feeling about something and that's when I make

a decision I have learned much more from conducting my own random surveys than I could ever have learned From the greatest of consulting firms they send a crew of people down from Boston rent a room in New York and charge you $100,000 for a lengthy study in the end it has no conclusion and takes so long to complete that if the deal you were considering was a good one it will be long gone the other people I don't take too seriously are the critics except when they stand in the way of my projects in my

opinion they mostly write To impress each other and they're just as swayed by Fashions as anyone else one week at spare glass Towers they are praising to the skies the next week they've rediscovered old and they're celebrating detail and ornamentation what very few of them have is any feeling for what the public wants which is why if these critics ever tried to become developers they'd be terrible failures Trump Tower is a building the critics were skeptical about before it Was built but which the public obviously liked I'm not talking about the sort of person who

inherited money 175 years ago and lives on 84th Street in Park Avenue I'm talking about the wealthy Italian with the beautiful wife and the red Ferrari those people the audience I was after came to Trump Tower in droves the funny thing about Trump Tower is that we ended up getting great architectural reviews the critics didn't want to review it well because it stood for a Lot of things they didn't like at the time but in the end it was such a gorgeous building that they had no choice but to say so I always follow my

own instincts but I'm not going to kid you it's also nice to get good reviews use your leverage the worst thing you can possibly do and a deal has seem desperate to make it that makes the other guy smell blood and then you're Dead the best thing you can do is deal from strength and Leverage is the biggest strength you can have leverage is having something the other guy wants or better yet needs or best of all simply can't do without unfortunately that isn't always the case which is why leverage often requires imagination and salesmanship

in other words you have to convince the other guy it's in his interest to make the deal back in 1974 in an effort to get the city to approve my deal to buy the Commodore Hotel on East 42nd Street I convinced its owners to go public with the fact that they were planning to close down the hotel after they made the announcement I wasn't shy about pointing out to everyone in the city what a disaster a boarded up Hotel would be for the Grand Central area and for the entire city when when the board of

holiday ins Was considering whether to enter into a partnership with me in Atlantic City they were attracted to my site because they believed my construction was farther along than that of any other potential partner in reality I wasn't that far along but I did everything I could short of going to work at the site myself to assure them that my Casino was practically finished my leverage came from confirming an impression they were Already pre disposed to believe when I bought the Westside Rail Yards I didn't name the project television City by accident and I didn't

choose the name because I think it's pretty I did it to make a point keeping the television networks in New York and NBC in particular is something the city very much wants to do losing a network to New Jersey would be a psychological and economic disaster leverage don't make deals without it Enhance your location perhaps the most misunderstood Concept in all of real estate is that the key to success is location location location usually that's said by people who don't know what they're talking about first of all you don't necessarily need the best location what

you need is the best deal just as you can create leverage you can enhance a location through promotion and through psychology when you have 57th Street and Fifth Avenue as your location as I did with Trump Tower you need less promotion but even there I took it a step further by promoting Trump Tower as something almost Larger than Life by contrast Museum Tower two blocks away and built above the Museum of Modern Art wasn't marketed well never achieved an aura and didn't command nearly the prices we did at Trump Tower location also has a lot

to do with fashion you can take a mediocre location And turn it into something considerably better just by attracting the right people after Trump Tower I built Trump Plaza on a site at Third Avenue in 61st Street that I was able to purchase very inexpensively the truth is that Third Avenue simply didn't compare with Fifth Avenue as a location but Trump Tower had given a value to the Trump name and I built a very striking building on Third Avenue suddenly we were able to command premium Prices from very wealthy and successful people who might have

chosen Trump Tower if the best Apartments hadn't been sold out today Third Avenue is a very prestigious place to live and Trump Plaza is a great success my point is that the real money isn't made in real estate by spending the top dollar to buy the best location you can get killed doing that just as you can get killed buying a bad location even for a low price what you Should never do is pay too much even if that means walking away from a very good site which is all a more sophisticated way of looking

at location get the word out you can have the most wonderful product in the world but if people don't know about it it's not going to be worth much there are singers in the world with voices as good as Frank sinatras but they're singing in their garages because no one has ever heard of them you need To generate interest and you need to create excitement one way is to hire public relations people and pay them a lot of money to sell whatever you've got but to me that's like hiring outside Consultants to study a market

it's never as good as doing it yourself one thing I've learned about the Press is that they're always hungry for a good story and the more Sensational the better it's in the nature of the job and I understand that the point is that if You're a little different or a little outrageous or if you do things that are bold or controversial the Press is going to write about you I've always done things a little differently I don't mind controversy and my deals tend to be somewhat ambitious also I achieved a lot when I was very

young and I chose to live in a certain style the result is that the Press has always wanted to write about me I'm not saying that they necessarily like me sometimes they write Positively and sometimes they write negatively but from a pure business point of view the benefits of being written about have far outweighed the drawbacks it's really quite simple if I take a full page ad in the New York Times to publicize a project it might cost $40,000 and in any case people tend to be skeptical about advertising but if the New York Times

writes even a moderately positive one Column story about one of my deals it doesn't cost me anything and it's worth a lot more than $40,000 the funny thing is that even a critical story which may be hurtful personally can be very valuable to your business television city is a perfect example when I bought the land in 1985 many people even those on the West Side didn't realize that those 100 acres existed then I announced I was going to build the world's tallest building on The site instantly it became a media event the New York Times

put it on the front page Dan R announced it on the evening news and George Will wrote a column about it in Newsweek every architecture critic had an opinion and so did a lot of editorial writers not all of them like the idea of the world's tallest building but the point is that we got a lot of attention and that alone creates value the other thing I do when I talk with reporters is To be straight I try not to deceive them or to be defensive because those are precisely the ways most people get themselves

into trouble with the Press instead when a reporter asked me a tough question I try to frame a positive answer even if that means Shifting the ground for example if someone asked me what negative effects the world's tallest building might have on the west side I turn the tables and talk about how New Yorkers deserve the world's Tallest building and what a boost it will give the city to have that honor again when a reporter asks why I build only for the rich I note that the rich aren't the only ones who benefit from my

buildings I explain that I put thousands of people to work who might otherwise be collecting unemployment and that I add to the city's tax base every time I build a new project I also point out that buildings like Trump Tower have helped spark New York's Renaissance the Final key to the way I promote is bravado I play to people's fantasies people may not always think big themselves but they can still get very excited by those who do that's why a little hyperbole never hurts people want to believe that something is the biggest and the greatest

and the most spectacular I call it truthful hyperbole it's an innocent form of exaggeration and a very effective form of promotion fight Back much as it pays to emphasize the positive there are times when the only choice is confrontation in most cases I'm very easy to get along with I'm very good to people who are good to me but when people treat me badly or unfairly or try to take advantage of me my general attitude all my life has been to fight back very hard the risk is that you'll make a bad situation worse and

I certainly don't recommend this approach To everyone but my experience is that if you're fighting for something you believe in even if it means alienating some people along the way things usually work out for the best in the end when the city unfairly denied me on Trump Tower the standard tax break every developer had been getting I fought them in six different courts it cost me a lot of money I was considered highly likely To lose and people told me it was a no- win situation politically I would have considered it worth the effort regardless

of the outcome in this case I won which made it even better when holiday ends once my partners at the Trump Plaza Hotel and Casino in Atlantic City ran a casino that consistently performed among the bottom 50% of casinos in town I fought them very hard and they finally sold out their share to me then I began to think about trying to Take over the holiday ins company altoe even if I never went on the offensive there are a lot of people gunning for me now one of the problems when you become successful is that

jealousy and envy inevitably follow there are people I categorize them as life's losers who get their sense of accomplishment and achievement from trying to stop others as far as I'm concerned if they had any real ability they wouldn't be fighting Me they'd be doing something constructive themselves deliver the goods you can't con people at least not for long you can create excitement you can do wonderful promotion and get all kinds of press and you can throw in a little hyperbole but if you don't deliver the goods people will eventually catch on I think of Jimmy

Carter after he lost the election to Ronald Reagan Carter came to see me in my office he Told me he was seeking contribution to the Jimmy Carter Library I asked how much he had in mind and he said Donald I would be very appreciative if you contributed $5 million I was dumbfounded I didn't even answer him but that experience also taught me something until then I'd never understood how Jimmy Carter became president the answer is that as poorly qualified as he was for the job Jimmy Carter had the nerve the guts the balls to ask

for something Extraordinary that ability above all helped him get elected president but then of course the American people uh caught on pretty quickly that uh Carter couldn't do the job and he lost in a landslide when he ran U for reelection Ronald Reagan is another example he is so smooth and so effective a performer that he completely won over the American people only now nearly seven years later are people beginning to question whether there's anything beneath that smile I See the same thing in my business business which is full of people who talk a good

game but don't deliver when Trump Tower became successful a lot of developers got the idea of imitating our Atrium and they ordered their Architects to come up with a design the drawings would come back and they would start costing out the job what they discovered is that the bronze escalators were going to cost a million dollars extra and the waterfall was Going to cost $2 million and the marble was going to cost many millions more they saw that it all added up to many millions of dollars and all of a sudden these people with these

great Ambitions would decide well let's forget about the atrium the dollar always talks in the end I'm lucky because I work in a very very special Niche at the top of the market and I can afford to spend top dollar to build the best I promoted the hell out of Trump Tower but I also had a Great product to promote contain the costs I believe in spending what you have to but I also believe in not spending more than you should when I was building low-income housing the most important thing was to get it built

quickly inexpensively and adequately so you could rent it out and make a few bucks that's when I learned to be cost conscious I never threw money around I learned from my father that Every penny counts because before too long your pennies turn into dollars to this day if I feel a contractor is overcharging me I'll pick up the phone even if it's only for $5,000 or $10,000 and I'll complain people say to me what are you bothering for over a few bucks my answer is that the day I can't pick up the telephone and make

a 25 cent call to save $10,000 is the day I'm going to close up shop the point is that you can dream great dreams but they'll never Amount to much if you can't turn them into reality at a reasonable cost at the time I built Trump Plaza in Atlantic City Banks were reluctant to finance new construction at all because almost every Casino up to then had experienced tens of millions of dollars in cost overruns we brought Trump Plaza in on budget and on time as a result we were able to open for Memorial Day weekend

the start of the high season by contrast Bob Guion of Penthouse has been trying for the past Seven years to build a casino on the boardwalk site right next to ours all he has to show for his efforts is a rusting half-built frame and tens of millions of dollars in Lost revenues and squandered carrying costs even small jobs can get out of control if you're not attentive for nearly seven years I watched from the window of my office as the city tried to rebuild wman rink in Central Park at the end of that time millions

of dollars had been wasted and The job was farther from being completed than when the work began they were all set to rip out the concrete and start over when I finally couldn't stand it anymore and I I offered to do it myself the job took four months to complete at a fraction of the city's cost have fun I don't Kid myself life is very fragile and success doesn't change that if anything success makes it more fragile anything can change without Warning and that's why I try not to take any of what's happened too seriously

money was never a big motivation for me except as a way to keep score the real excitement is playing the game I don't spend a lot of time worrying about what I should have done differently or what's going to happen next if you ask me exactly what the deals I'm about to describe all add up to in the end I'm not sure I have a very good answer except that I've had a very good time Making them chapter three growing up the most important influence on Me growing Up was my Father Fred Trump I learned

a lot from him I learned about toughness in a very tough business I learned about motivating people and I learned about competence and efficiency get in get it done get it done right and get out at the same time I learned very early on that I didn't want to be in the business my father was in he did very Well building rent controlled and rent stabilized housing in Queens and Brooklyn but it was a very tough way to make a buck I wanted to try something grander more glamorous and more exciting I also realized that

if I ever wanted to be known as more than Fred Trump's son I was eventually going to have to go out and make my own Mark I'm fortunate that my father was content to stay with what he knew and did so well that left me free to make my mark in Manhattan even so I never forgot the lessons I learned at my father's side his story is classic Horatio Alger Fred Trump was born in New Jersey in 1905 his father who came here from Sweden as a child owned a moderately successful restaurant but he was

also a hard liver and a hard Drinker and he died when my father was 11 years old my father's mother Elizabeth went to work as a seamstress to support her Three children the oldest also named Elizabeth was 16 at the time and the youngest John was nine my father was the middle child but the first son and he became the man of the house almost immediately he began taking odd jobs everything from deliveries for a local fruit store to shining shoes to hauling lumber on a construction site construction always interested him and during high school

he began taking night classes in carpentry plant reading and Estimating figuring that if he learned a trade he'd always be able to make a living by the age of 16 he'd built his first structure a two-car frame garage for a neighbor middle class people were just beginning to buy car cars few homes had attached garages and my father was soon able to establish a very good new business building prefabricated garages for $50 a piece he graduated from high school in 1922 and with a family to support he Couldn't even consider college instead he went to

work as a Carpenters helper for a home builder in Queens he was better with his hands than most but he also had some other advantages for starters he was just a very smart guy even to this day he can add five columns of numbers in his head and keep them all straight between his night courses and his basic Common Sense he was able to show the other Carpenters most of whom had no education at all shortcuts such As how to frame a rafter with a steel square in addition my father was always very focused and

very ambitious most of his co-workers were happy just to have a job my father not only wanted to work he also wanted to do well and to get ahead finally my father just plain loved working from as early as I can remember my father would say to me the most important thing in life is to love what you're doing because that's the only way you'll ever be really good at it one Year after he got out of high school my father built his first home a one family house in woodh Haven Queens it cost a

little less than $5,000 to build and he sold it for $7,500 he called called his company Elizabeth Trump and son because at the time he wasn't of age and his mother had to sign all his legal documents and checks as soon as he sold his first house he used the profit to build another and then another and another in Workingclass Queens communities like woodh Haven Hollis and queen's Village for working people who'd spent their lives in small crowded Apartments my father offered a whole new lifestyle modestly PR Suburban style brick houses they were gobbled up

as fast as he could build them instinctively my father began to think bigger by 1929 aiming at a more affluent Market he started building much larger homes instead of tiny brick Houses he put up three-story Colonials tutors and victorians in a section of queens that ultimately became known as Jamaica Estates and where eventually he built a home for our family when the Depression hit and the housing market fell off my father turned his attention to other businesses he bought a bankrupt mortgage Servicing Company and sold it at a profit a year later next he built

a self-service supermarket in woodh Haven one of the first of its Kind all the local Tradesmen butcher tailor Shoemaker rented concessions in the space and the convenience of having everything available Under One Roof made the operation an immediate success within a year however eager to return to building my father sold out to King Cullen for a large profit by 1934 the Depression was finally beginning to ease but money was still tight and so my father decided to go back to building lower priced homes this time he chose The depressed Flatbush area of Brooklyn where land

was cheap and he sensed there was a lot of room for growth once again his instincts were right in three weeks he sold 78 homes and during the next dozen years he built 2,500 more throughout queens and Brooklyn he was becoming very successful in 1936 my father married my wonderful mother Mary McLoud and they began a family my father's success also made it possible for him to give to his younger brother Something he'd missed himself a college education with my father's help my uncle John Trump went to college got his PhD from MIT and eventually

became a full professor of physics and one of the country's great scientists perhaps because my father never got a college degree himself he continued to view people who had one with a respect that bordered on awe in most cases they didn't deserve it my father could run circles around most Academics and he would have done very well in college if he'd been able to go we had a very traditional family my father was the power and the bread winner and my mother was the perfect housewife that didn't mean she sat around playing br bridge and

talking on the phone there were five children in all and besides taking care of us she cooked and cleaned and darned socks and did charity work at the local hospital we lived in a large house but we never Thought of ourselves as rich kids we were brought up to know the value of a dollar and to appreciate the importance of hard work our family was always very close and to this day they are my closest friends my parents had no pretentions my father still works out of a small modest back office on Avenue Z in

the sheep's head B section of Brooklyn in a building he put up in 1948 it simply never occurred to him to move my sister maranne was the first Born and when she graduated from Mount Holio college she followed my mother's path at first marrying and staying at home while her son grew up but she also inherited a lot of my father's drive and ambition and when her son David became a teenager she went back to school to study law she graduated with honors began with a private firm worked for 5 years as a federal prosecutor

in the US attorney's office and four years ago became a federal judge Maryann is really Something my younger sister Elizabeth is kind and bright but less ambitious and she works at Chase Manhattan Bank in Manhattan my older brother Freddy the first son had perhaps the hardest time in our family my father is a wonderful man but he is also very much a business guy and strong and tough as hell my brother was just the opposite handsome as could be he loved parties and had a great warm personality and a real zest for life he didn't

have an enemy in the World naturally my father very much wanted his oldest son in the business but unfortunately business just wasn't for Freddy he went to work with my father reluctantly and he never had a feel for Real Estate he wasn't the kind of guy who could stand up to a killer contractor or negotiate with a rough supplier because my father was so strong there were evitably confrontations between the two of them in most cases Freddy came out on the short end eventually it became clear to all of us that it wasn't working and

Freddy went off to pursue what he loved most flying airplanes he moved to Florida became a professional pilot and flew for towa he also loved fishing and boating Freddy was probably happiest during that period in his life and yet I can remember saying to him even though I was eight years younger come on Freddy what are you doing you're wasting your time I Regret now that I ever said that perhaps I was just too young to realize that it was irrelevant what my father or I thought about what Freddy was doing What mattered was that

he enjoyed it along the way I think Freddy became discouraged and he started to drink and that led to a downward spiral at the age of 43 he died it's very sad because he was a wonderful guy who never quite found himself in many ways he had it all but the Pressures of our particular family were not for him I only wish I had realized this sooner fortunately for me I was drawn to business very early and I was never intimidated by my father the way most people were I stood up to him and he

respected that we had a relationship that was almost businesslike I sometimes wonder if we'd have gotten along so well if I hadn't been as business oriented as I am even in elementary school I was a very assertive aggressive kid in the Second grade I actually gave a teacher a black eye I punched my music teacher because I didn't think he knew anything about music and I almost got expelled I'm not proud of that but it's clear evidence that even early on I had a tendency to stand up and make my opinions known in a very

forceful way the difference now is that I like to use my brain instead of my fists I was always something of a leader in my neighborhood much the the way it is Today people either liked me a lot or they didn't like me at all in my own crowd I was very well-liked and I tended to be the kid that others followed as an adolescent I was mostly interested in creating Mischief because for some reason I like to stir things up and I like to test people I'd throw water balloons shoot spitballs and make a

Ruckus In the schoolyard and at birthday parties it wasn't malicious so much as it was aggressive my brother Robert likes to tell the story of of the time when it became clear to him where I was headed Robert is two years younger than I am and we have always been very close although he is much quieter and more easygoing than I am one day we were in the playroom of our house building with blocks I wanted to build a very tall building but it turned out that I didn't have enough blocks I asked Robert if

I could borrow some of his and he said okay but you have to give them back When you're done I ended up using all of my blocks and then all of his and when I was done I'd created a beautiful building I liked it so much that I glued the whole thing together and that was the end of Robert's blocks when I turned 13 my father decided to send me to a military school assuming that a little military training might be good for me I wasn't thrilled about the idea but it turned out he was

right beginning in the eth grade I went to the New York Military Academy in Upstate New York I stayed through my senior year and along the way I learned a lot about discipline and about channeling my aggression into achievement in my senior year I was appointed a captain of the cadets there was one teacher in particular who had a big impact on me Theodore dobias was a former drill sergeant in the Marines and physically he was very tough and very rough the kind of guy who could slam into a goal Post wearing a football helmet

and break the post rather than his head he didn't take any back talk from anyone least of all from kids who came from privileged backgrounds if you stepped out of line doia smacked you and he smacked you hard very quickly I realized that I wasn't going to make it with this guy by trying to take him on physically a few less fortunate kids chose that route and they ended up getting stomped most of my classmates took the Opposite approach and became nebbishes they never challenged doas about anything I took a third route which was to

use my head to get around the guy I figured out what it would take to get doas on my side in a way I finessed him it helped that I was a good athlete since he was the baseball coach and I was the captain of the team but I also learned how to play him what I did basically was to convey that I respected his authority but that he didn't Intimidate me it was a delicate balance like so many strong guys dobaz had a tendency to go for the jugular if he smelled weakness on the

other hand if he sense strength but you didn't try to undermine him he treated you like a man from the time I figured that out and it was more an instinct than a conscious thought we got along great I was a good enough student at the Academy although I can't say I ever worked very hard I was lucky that it came relatively Easily to me because I was never all that interested in schoolwork I understood early on that the whole academic thing was only a preliminary to the main event which was going to be whatever

I did after I graduated ated from college almost from the time I could walk I'd been going to construction sites with My Father Robert and I would tag along and spend our time hunting for empty soda bottles which we'd take to The store for deposit money as a teenager when I came home from school for vacation I followed my father around to learn about the business closeup dealing with contractors or visiting buildings or negotiating for a new site you made it in my father's business rent control and rent stabilized buildings by being very tough and

very Relentless to turn a profit you had to keep your costs down and my father was always very price conscious he'd negotiate just as hard With a supplier of mops and floor wax as he would with the general contractor for the larger items on a project uh one advantage my father had was that he knew what everything cost no one could put anything over on him if you know for example that a plumbing job is going to cost the contractor $400,000 then you know how far you can push the guy you're not going to try

to negotiate him down to $300,000 because that's just going to put him out of business but You're also not going to let him talk you into $600,000 the other way my father got contractors to work for a good price was by selling them on his reliability he'd offer a low price for a job but then he'd say look with me you get paid and you get paid on time and with someone else who knows if you ever see your money he'd also point out that with with him they'd get in and out quickly and on

to the next job and Finally because he was always building he could hold out the promise of plenty of future work his arguments were usually compelling my father was also an unbelievably demanding Taskmaster every morning at 6 he'd be there at the site and he would just pound and pound and pound he was almost a one-man show if a guy wasn't doing his job the way my father thought it should be done and I mean any job because he could do them all he'd jump in and take over it was Always amusing to watch a

certain scenario repeat itself my father would start a building and say Flatbush at the same time the two competitors began putting up their own buildings nearby invariably my father would finish his building three or four months before his competitors did his building would also always be a little better looking than the other two with a nicer more spacious Lobby and larger rooms in the apartments themselves he'd rent them out quickly at A time when it wasn't so easy to rent eventually one or both of his competitors would go bankrupt before they'd finish their buildings and

my father would step in and buy them out I saw this happen over and over in 1949 when I was just three years old my father began building Shore Haven Apartments the first of several large apartment complexes that eventually made him one of the biggest landlords in New York's outer Burrows because he built The project so efficiently my father did exceptionally well with them at the time the government was still in the business of financing lower and middle income housing to build Shore Haven for example my father got a loan of $10.3 million from the

federal housing Administration the loan was based on what the agency projected as a fair and reasonable cost for the project including a builder profit of 7.5% by pushing his contractors very Hard and negotiating hard with his suppliers my father was able ble to bring the project in ahead of schedule and almost $1 million under budget the term windfall profits was actually coined to describe what my father and some others managed to earn through hard work and competence eventually such profits were disallowed in the mean time however my father put up thousands of good quality lower

and middle inome Apartments of the Sort that no one is building today because it's not profitable and government subsidies have been eliminated to this day the Trump buildings in Queens and Brooklyn are considered among the best reasonably priced places to live in New York after I graduated from New York Military Academy in 1964 I flirted briefly with the idea of attending film school at the University of Southern California I was attracted To the glamour of the movies and I admired guys like Sam Goldwin Daryl xanic and most of all Lewis B mayor whom I considered

great showman but in the end I decided real estate was a much better business I began by attending forom University in the Bronx mostly because I wanted to be close to home I got along very well with the Jesuits who ran the school but after two years I decided that as long as I had to be in college I Might as well test myself against the best I applied to the Wharton School of Finance at the University of Pennsylvania and I got in at the time if you were going to make a career in business

Wharton was the place to go Harvard Business School May produce a lot of CEOs guys who manage public companies but the real entrepreneurs all seem to go to Wharton Saul Steinberg Leonard Lauder Ron perelman the list goes on and on perhaps the most Important thing I learned at Wharton was not to be overly impressed by academic credentials it didn't take me long to realize that there was nothing particularly awesome or exceptional about my classmates and that I could compete with them just fine the other important thing I got from Wharton was a Wharton degree in

my opinion that degree doesn't prove very much but a lot of people I do business with take it very seriously and it's Considered very prestigious so all things considered I'm glad I went to Wharton I was also very glad to get finished I immediately moved back home and went to work full-time with my father I continued to learn a lot but it was during this period that I began to think about alternatives for starters my father's scene was a little rough for my taste and by that I mean physically rough I remember for example going

around with the men we called rent Collectors to do this job you had to be physically imposing because when it came to collecting rent from people who didn't want to pay size mattered a lot more than brains one of the first tricks I Learned was that you never stand in front of someone's door when you knock instead you stand by the wall and reach over to knock the first time a collector explained that to me I couldn't imagine what he was talking about what's the point I said he looked at me like I was Crazy

the point he said is that if you stand to the side the only thing exposed to danger is your hand I still wasn't sure what he meant in this business he said if you knock on the wrong apartment at the wrong time you're liable to get shot my father had never sheltered me but even so this was not a world I found very attractive I just graduated from Wharton and suddenly here I was in a scene that was violent at worst and unpleasant at best for example there Were tenants who'd throw their garbage out the

window because it was easier than putting it in the incinerator at one point I instituted a program to teach people about using the incinerators the vast majority of tenants were just fine but the bad element required attention and to me it just wasn't worth it the second thing I didn't find appealing was that the profit margins were so low you had no choice but to pinch pennies and there Was no room for any luxuries design was beside the point because every building had to be pretty much the same four walls common brick facades and straight

up you used red brick not necessarily because you liked it but because it was a penny of brick cheaper than tan brick I still remember a time when my father visited the Trump Tower site Midway through construction our facade was a glass curtain wall Which is far more expensive than Brick In addition we were Using the most expensive glass you can buy bronze solar my father took one look and he said to me why don't you forget about the damn glass give them four or five stories of it and then use common brick for the

rest nobody is going to look up anyway it was a classic Fred Trump standing there on 57th Street and 5th Avenue trying to save a few bucks I was touched and of course I understood where he was coming from but also exactly why I decided to leave the real reason I wanted out of my father's business more important than the fact that it was physically rough and financially tough was that I had loftier dreams and visions and there was no way to implement them building housing in the outer Burrows looking back I realized now that

I got some of my sense of Showmanship from my mother she always had a flare for the dramatic and the grand she was was a very traditional Housewife but she also had a sense of the world Beyond her I still remember my mother who is Scottish by birth sitting in front of the television set to watch Queen Elizabeth's coronation and not budging for an entire day she was just enthralled by the Pomp and Circumstance the whole idea of royalty and glamor I also remember my father that day pacing around impatiently for Christ's sake Mary he'd

say enough is enough turn it off they're All a bunch of con artists my mother didn't even look up they were total opposites in that sense my mother loves Splendor and magnificence while my father who is very down to earth gets excited only by competence and efficiency chapter 4 The Cincinnati Kid Prudence pays in college while my friends were reading the comics and the sports pages of newspapers I was reading the listings of FHA Foreclosures it might seem a bit abnormal to study lists of federally financed housing projects in forclosure but that's what I did

and that's how I found out about Swift and Village it was a job that I bought with my father with while I was in college and it was my first big deal Swifton Village was a 1 1200 unit apartment development in Cincinnati Ohio and it was a very troubled place is there were 800 vacant apartments the developers had gone on Under the government had foreclosed and the whole deal was a disaster but from our perspective that was great because it gave us a terrific opportunity a lot of times when you are dealing with a government

agency on a foreclosure they just want to get out of it as quickly as possible they aren't equipped to manage it in this case things had deteriorated so badly that no one else was even bidding today you'll find the same thing if you go out to the Sun Belt where they Built all that housing during the oil boom now you have huge developments with 30 and 40% vacancy rates developers are suicidal because banks are foreclosing on them it's a great time for a smart buyer because you can get unbelievable deals my father and I put

in a very minimal bid for Swifton and it was accepted we ended up paying less than $6 million for a job which had cost twice that much to build just two years earlier we were also immediately able to Get a mortgage for what we paid plus about 100 $1,000 which we put toward fixing the place up in other words we got the project without putting down any money of our own all we had to do was go and run it and if we did even a halfway decent job we could easily cover our mortgage from

the proceeds of the rent the fact that it was such a big job appealed to my father and to me because it meant we could focus a lot of energy on it without feeling we were wasting Our time it takes almost the same amount of energy to manage 50 units as it does 1,200 except that with 1,200 you have a much bigger upside after we negotiated the deal success became a matter of management and marketing the challenge was to get the place rented and rented to good tenants who would stay there the tenants who were

living in the project when I took over had ripped the place apart many of them had come down from the Hills of Kentucky they were very poor and had seven or eight children almost no possessions and no experience living in an apartment complex they crammed into one room and two room apartments and their children went wild they would just destroy the apartments and wreak havoc on the property the tenants not only didn't care many of them also didn't see fit to pay rent if you press them they had a tendency to take off what we

discovered is that to avoid Paying rent these people would rent a trailer pull it up in front of their apartments at 1 or two in the morning and disappear into the night with all their belongings that was fine by me but I wanted to make sure we got paid first our solution was to Institute a trailer watch we had someone on uh round the-clock Patrol after we got rid of the bad tenants we set about fixing the place up to attract a better element That required a substantial investment almost $800,000 by the time we were

done which was a lot of money in those days but it was more than worth it in New York the laws prevent you from getting Fair increases even when you make improvements but in Cincinnati we were immediately able to charge and get much higher rents for the apartments at Swift and Village the first thing we did was invest in beautiful white shutters for the windows that may not sound like A big deal but what the shutters did was give a bunch of cold red brick buildings a feeling of warmth and coziness which was important it

was also much more expensive than you'd guess because you're talking about 1,200 units Each of which has 8 to 10 windows the next thing we did was rip out the cheap horrible aluminum front doors on the apartments and put up beautiful Colonial white doors I made sure the whole complex was very clean and very wellmaintained as I Said earlier I've always had a personal thing about cleanliness but I also believe it's a very good investment for example if you want to sell a car and you spend $5 do to wash and polish it and then

apply a little extra elbow grease suddenly you find you can charge an extra $400 and get it I can always tell a loser when I see someone with a car for sale that is filthy dirty it's so easy to make it look better it's no different in real Estate well-maintained real estate is always going to be worth a lot more than poorly maintained real estate that's been less true during the past few years in New York when there's been such a fever for Real Estate that people buy anything but it's a mistake to be lulled

by Good Times markets always change and as soon as there's a downturn cleanliness becomes a major value we painted the hallways we sanded and stained the floors we kept the vacant Apartments immaculately clean and we landscaped the grounds we also ran beautiful newspaper ads for the project at a time when not many people in Cincinnati were advertising real estate people came to check us out and the word of mouth started getting good within a year the buildings were 100% rented along the way we went through a half dozen different project managers before we found the

one we wanted we had managers who were honest but dumb Including one guy who literally painted himself into the corner of an apartment others were smart but didn't know the first thing about managing fortunately we went through them fast because I tend to size people up pretty quickly ultimately we got a um a fabulous man whom I'll call Irving Irving was 65 years old and a real character he was one of the greatest artists I've ever met but in addition to being a very sharp talker and a very slick Salesman he was also an amazing

manager Irving was the kind of guy who worked perhaps an hour a day and accomplished more in that hour than most managers did in 12 hours I learned something from that it's not how many hours you put in it's what you get done while you're working the problem with Irving was that he wasn't the most trustworthy guy in the world I suspected as much from the first day but it wasn't until I tried to put a bond on him something I do with Any employee who handles money that my instincts were confirmed my insurance agent

called me back after running a check and he said Donald you've got to be kidding about a bond this guy is a con man it turned out that Irving had done all sorts of con jobs and swindles and he'd often been in trouble with the law My Philosophy has always been that if you ever catch someone stealing you have to go after him very hard even if it cost you 10 times more than he stole Stealing is the worst but with Irving I had a dilemma he was far and way more capable than any honest

manager I had found and so long as he was in charge no one under him would dare steal that meant I only had to keep my eye on him I used to kid Irving I'd say we pay you $50,000 and all you can steal and he would act all upset if IID caught him in the ACT I would have fired Irving on the spot but I never did still I figured he managed to steal at least Another $50,000 a year even so I was probably getting a bargain one day I walked into the office and

one of the girls who worked there was crying it turned out that there was something they called a funeral fund to which they all contributed in order to buy flowers for anyone they knew who died they had about $80 in the fund when I asked the girl what she was crying about she said oh that Irving he stole our funeral fund I went to Irving and I said Irving damn It did you steal their money of course he just denied it he swore he'd get those girls and he ranted and raped for half an hour

but I always assumed the girls were telling the truth Irving was a classic he had problems but he was a classic I'll give you an example of how Irving worked you've got to understand that we are talking about a short fat baldheaded guy with thick glasses and hands like jello who'd never lifted anything in his life beside a p And who had no physical ability whatsoever what he did have however was an incredible mouth as I mentioned in the early days we had a good number of tenants who didn't believe in paying rent sometimes Irving

would go out and collect himself he'd ring the doorbell and when someone came to the door he'd go crazy he'd get red in the face use every filthy word he could think of and make every threat in the book it was an act but it was very effective usually They paid up right then and there what one day while Irving was on his rounds he knocked on a door and a little 10-year-old girl answered Irving said you go tell your father to pay his rent or I'm going to knock his ass off and he went

on like that until the girl's mother came out uh to see what was going on as it happened she was an absolutely beautiful woman now Irving had a weakness for all women and this woman was quite exceptional so Immediately Irving started putting the move on her he invited her out to dinner the woman whose husband was either a truck truck driver or a construction worker had never experienced anyone like Irving and obviously didn't know what to make of him there was no way however that she was interested in Irving and finally he gave up and

we left about an hour later Irving and I were sitting in his office when this huge guy a monster maybe 240 PBS burst through the door he Was Furious that Irving had cursed in front of his daughter and he was ready to strangle him for coming on to his wife the guy had murder in his eyes I expected Irving if he had any sense to run for his life instead he started verbally attacking the man flailing and screaming and chopping his hands in the air you get out of this office he said I'll kill you

I'll destroy you these hands are lethal weapons they're registered with the police Department I'll never forget how the guy looked at Irving and said you come outside you fat crap I want to burn grass with you I always loved that phrase burn grass and I thought to myself Irving is in serious trouble but Irving didn't seem to think so I'd fight you anytime you want he said but it's unlawful for me to fight all you had to do was look at Irving to know those hands were hardly registered weapons but Irving was very much like

a lion tamer you've seen these guys maybe 150 pounds who walk Bly into a cage where there's a magnificent 800 pound lion pacing around if that animal sensed any weakness or any fear he'd destroy the trainer in a second but instead the trainer cracks his whip walks with authority and amazingly the lion listens which is exactly what Irving did with this huge guy except his whip was his mouth the result was that the guy left the office He was still in a rage but he left Irving probably saved his own life just by showing no

fear and that left a very Vivid impression on me you can't be scared you do your thing you hold your ground you stand up tall and whatever happens happens as for Swifton Village once Irving had it running well I began spending less and less time there I wasn't really needed anymore in Cincinnati so I cut back my visits to Swifton first to once a week and eventually to once a month early on I'd become particularly friendly with one of the newer tenants at Swifton he was Jewish an older man who'd been in a concentration camp

in Poland he' started off in America as a butcher then bought the shop and by the time I met him he owned perhaps 14 butcher shops he and his wife had taken two apartments in Swifton and put them together and they had a great place and they were very Happy there I I had a lot of respect for this guy because he had uh Street smarts he'd been around and he was obviously a true survivor one day a number of years after we first bought the place I was out visiting I ran into my friend

how are you doing how are you feeling I asked good good he replied but then he took me aside and whispered Donald you are a friend of mine and I have to tell you sell this job and I said why because It's going real bad not the job but the area it's being surrounded by people who are so bad they will cut your throat and walk away and not even think about it I'm talking about about people who enjoy cutting throats that was the exact expression I never forgot it now I'm someone who responds to

people I have respect for and I listen again it's instincts not marketing studies so I spent an extra two days in Cincinnati and I wrode round and I saw that there Was trouble Brewing that neighborhoods were getting rough I put the job up for sale and almost immediately we got an offer we'd already done very well with Swift and Village because our debt was very small relative to the size of the complex and our rent Roll by the end had reached about $700,000 a year but selling was how we made a real killing the buyer

was The Prudent Real Estate Investment Trust those were the go- go days when real estate investment trusts Partnerships that invested in real estate were very hot the banks were loaning money to any Reit the only problem was that many of the people running the reats were neither knowledgeable nor competent I called them the guys with the white bu they were the sort of people who'd throw money into a project in Puerto Rico without even going to see it eventually they discovered that the building they thought they'd bought had never even Been built in the case

of prudent they sent a young man out to inspect and evaluate the property prior to making a final decision on whether to go forward with the sale this kid was about my age but he looked like a teenager frankly I was surprised they'd entrusted such a big decision to him it turned out that what he wanted to do more than anything was go out for lunch he'd heard about this restaurant in downtown Cincinnati called the masonet which was supposed to Be one of the five best restaurants in the country he really wanted to eat there

and when he called to say he was coming he asked me to make a lunch reservation I said fine his flight came in a little late about midday and I met him and I took him over to Swifton Village and showed him the job we still had 100% occupancy at the time and he wasn't interested in asking a lot of questions beyond that he was anxious to get to the masanet it took about half an Hour to get there from Swifton and we ended up spending about three hours over lunch which is the opposite of

the way I normally work if I'd had only one day to look over a big job like Swifton I'd sure as hell skip lunch and spend my time learning everything I could about what I was thinking of buying by the time we were done with lunch it was almost 4:00 and and I had to take him to his plane he returned to New York wellfed and feeling great and he Strongly recommended going ahead with the purchase he told his bosses that the area was wonderful and that Swifton was a great deal they approved the sale

the price was1 12 million or approximately a $6 million profit for us it was a huge return on a short-term investment what happened next is that we signed a contract by then I could see the dark clouds clearly on the horizon a lot of tenants had their leases coming up and weren't planning to renew we put a Clause in the contract of sale saying that all representations contained in it were as of the signing of the contract not as of the closing which is what's typically required in other words we were willing to represent that

the project was 100% rented at the time of the contract signing but we didn't want to make the same promise at the time of closing three or four months down the line the other thing I did was to insist on a clause in the contract in which They guaranteed they'd close or else pay a huge penalty that was also very unusual because in nearly every other deal the buyer puts up a 10% deposit and if he fails to close all he forfeits is the deposit frankly The Prudent people should have been more prudent but as

I said the reats were hot to trot and they couldn't make deals fast enough in the end of course it never pays to be in too much of a hurry on the day we Closed there were dozens of vacant apartments chapter five the move to Manhattan I had my eye on Manhattan from the time I graduated from Wharton in 1968 but at that point the market in the city was very hot the prices seemed very high and I was unable to find a deal I liked meaning a good piece of property at a price I

found affordable my father had done very well for himself but he didn't believe in giving his children huge trust Funds when I graduated from college I had a net worth of perhaps $200,000 and most of it was tied up in buildings in Brooklyn and Queens so I waited I went to work helping to run my father's business and I continued to spend as much time as possible in Manhattan the Turning Point came in 1971 when I decided to rent a Manhattan apartment it was a studio in a building on Third Avenue and 75th Street and

it looked out On the water tank in the court of the adjacent building I jokingly referred to my apartment as a penthouse because it did happen to be near the top floor of the building I also tried to divide it up so that it would seem bigger but no matter what I did it was still a dark dingy little apartment even so I loved it moving into that apartment was probably more exciting for me than moving 15 years later into the top three floors of Trump Tower on fth Avenue and 57th Street overlooking Central Park

you have to understand I was a kid from Queens who worked in Brooklyn and suddenly I had an apartment on the Upper East Side the really important thing was that by virtue of this move I became much more familiar with Manhattan I began to walk the streets in a way you never do if you just come in to visit or do business I got to know all the good properties I became a city guy instead Of a kid from the burough as far as I was concerned I had the best of all worlds I was

young and I had a lot of energy and I was living in Manhattan even though I commuted back to Brooklyn to work one of the first things I did was join La club which at the time was the hottest club in the city and perhaps the most exclusive like Studio 54 at its height it was located on East 54th Street and its membership included some of the most successful men and the most Beautiful women in the world it was the sort of place where you were likely to see a wealthy 75y old guy walk in

with three blondes from Sweden I'll never forget how I became a member one day I called up La club and I said my name is Donald Trump and I'd like to join your Club the guy on the other end of the phone just laughed and said you've got to be kidding nobody of course had heard of me the next day I got another idea and I Called back back and I said to the guy listen could I have a list of your members I may know someone who is a member and he said I'm sorry

we don't do that and he hung up the next day I called again and said I need to reach the president of the club I want to send him something for some reason the guy gave me the president's name and his business number and I called him up I introduced myself I said very politely my name is Donald Trump and I'd like to Join the club and said do you have any friends or family in the club and I said no I don't know anybody there he said well what makes you think you should be

admitted as a member I just kept talking and talking and finally this fellow said to me I'll tell you what you sound like a nice young man and maybe it would be good to have some younger members so why don't you meet me for a drink at 21 the next night we met for a drink there was just one small problem I Don't drink and I'm not very big on sitting around my host on the other hand like to drink and he had brought along a friend who also liked to drink for the next two

hours we sat there as they drank and I didn't um until finally I said listen fellas can I help you get home and they said no let's just have one more now I just wasn't used to that I have a father who has always been a rock very straight and very solid my father would come home every night at 7 Have his dinner read the newspaper watch the news and that was that and I'm as much of a rock as my father this was a totally different world I remember wondering if every successful person in

Manhattan was a big drinker I figured if that was the case I was going to have a big Advantage finally about 10 these guys had enough and I practically had to carry them home two weeks passed and I never heard from the president finally I called him and he didn't even remember Who I was so now I had to go through the whole thing all over again again back to 21 only this time he didn't drink as much and he agreed to put me up for membership he had only one misgiving uh he he said

that because I was young and good-look and because uh some of the older members of the club were married to beautiful young women he was worried that I might be tempted to try to steal their wives he he asked me to promise that I wouldn't do that I Couldn't believe what I was hearing my mother is as much of a rock as my father She is totally devoted to my father they recently celebrated 50 years of marriage that's what I grew up with and here's this guy talking about stealing wi anyway I promised I was

admitted to the club and it turned out to be a great move for me socially and professionally I met a lot of beautiful young single women and I went out almost every night actually I never got involved with any Of them very seriously these were beautiful women but many of them couldn't carry on a normal conversation some were vain some were crazy some were wild and many of them were phonies for example I quickly found out that I couldn't take these girls back to my apartment because by their standards what I had was a disaster

and in their world appearances were everything when I finally did get married I married a very beautiful woman But a woman who also happens to be a rock just like my mother and father during that same period I also met a lot of very successful very wealthy men at La Club I had a good time when I went out at night but I was also working I was learning how the New York scene operates and I was meeting the sort of people with whom I'd eventually work on deals I also met the sort of wealthy

people particularly Europeans and South Americans who eventually bought the most Expensive apartments in Trump Tower and Trump Plaza it was at La club that I first met Roy con I knew him by reputation and was aware of His Image as a guy who wasn't afraid to fight one night I found myself sitting at the table next to him we got introduced and we talked for a while and I challenged him I like to test people I said to him I don't like lawyers I think all they do is delay deals instead of making deals and

every answer they give You is no and they are always looking to settle instead of fight he said he agreed with me I like that and so then I said I'm just not built that way I'd rather fight than fold because as soon as you fold once you get the reputation of being a folder uh I could see Roy was intrigued but he wasn't sure what the point of it all was finally he said is this just an academic conversation I said no it's not academic at all it so happens that the government Has just

filed suit against our company and many others under the Civil Rights Act saying that we discriminated against blacks in some of our housing developments I explained to him that I'd spent that afternoon with my father talking to lawyers in a very prestigious Wall Street firm and that they'd advised us to settle that's exactly what most businessmen do when the government Charged them with anything because they just don't want bad publicity even if they believe they can beat a phony rap the idea of settling drove me crazy the fact was that we did rent to blacks

in our buildings we wanted tenants who we could be sure would pay the rent who would be neat and clean and good neighbors and who met our requirement of having an income at least four times the rent so I said to Roy what do you think I should do and he said my view is tell Them to go to hell and fight the thing in court and let them prove that you discriminated which seems to me very difficult to do in view of the fact that you have black tenants in the building he also told

me I don't think you have any obligation to rent to tenants who would be undesirable white or black and the government doesn't have a right to run your business that's when I decided Roy con was the right person to handle the case I was nobody at the time but he loved a good fight and he took on my case he went to court and I went with him and uh we fought the charges in the end the government couldn't prove its case and we ended up making a a minor settlement without admitting any guilt instead

we agreed to do some equal opportunity advertising of vacancies for a period of time in the local new newspaper and that was the end of the suit I learned a lot about Roy during that period he was a Great lawyer when he wanted to be he could go into a case without any notes he had a photographic memory and could argue the facts from his head when he was prepared he was brilliant and almost unbeatable however he wasn't always prepared even then he was so brilliant that he could sometimes get away with it unfortunately he

could also be a disaster and so I would always question Roy very closely before a court date if he wasn't prepared I'd push for a Postponement I don't Kid myself about Roy he was no Boy Scout he once told me that he'd spent more than two-thirds of his adult life under indictment on one charge or another that amazed me I said to him Roy just tell me one thing did you really do all that stuff he looked at me and smiled what the hell do you think he said I never really knew whatever ever else

you could say about Roy he was very tough sometimes I think that next to Loyalty toughness was the most important thing in the world to him for example all Roy's friends knew he was gay and if you saw him socially he was invariably with some very good-looking young man but Roy never talked about it he just didn't like the image he felt that to the average person being gay was almost synonymous with being a wimp that was the last thing he wanted to project so he almost went over overboard to avoid it if the subject

of gay rights came up Roy was always the first one to speak out against them tough as he was Roy always had a lot of friends and I'm not embarrassed to say I was one he was a truly loyal guy it was a matter of Honor with him and because he was also very smart he was a great guy to have on your side you could count on him to go to bat for you even if he privately disagreed with your view and even if defending you wasn't necessarily the best thing for him he was

Never Too Faced just compare That with all the hundreds of respectable guys who make careers out of boasting about their uncompromising integrity but have absolutely no loyalty they think only about what's best for them and don't think twice about stabbing a friend in the back if the friend becomes a problem what I liked most about Roy con was that he would do just the opposite Roy was the sort of guy who'd be there at your hospital bed long after everyone else had bailed out Literally standing by you to the death in any case I got

to know a lot of people when I moved to Manhattan and I got to know properties but I still couldn't find anything to buy at a price I liked then suddenly in 1973 things began to turn bad in Manhattan I'd always assumed the market would cool off because everything runs in cycles and real estate is no different even so I never expected things to get as bad as they did it was a combination of factors First the federal government announced a moratorium on housing subsidies which they had been giving out by The Bushel particularly in

the city at the same time interest rates began to rise after being so stable for so many years that it was easy to forget they could move it all then to make things worse there was a spurt of inflation particularly in construction costs which seem to rise even when there's no inflation anywhere else but the biggest problem Problem by Far was with the city itself the city's debt was rising to levels that started to make everyone very nervous for the first time you heard people talk about the city going bankrupt fear led to more fear

before long New York was suffering from a crisis of confidence people simply stopped believing in the city it wasn't an environment conducive to new real estate development in the first nine months of 1973 the city issued permits for about 15,000 new apartments and single family homes in the five burrows in the first N9 months of 1974 the number dropped to 6,000 I worried about the future of New York City too but I can't say it kept me up nights I'm basically an optimist and frankly I saw the city's trouble as a great opportunity for me

because I grew up in Queens I believe perhaps to an irrational degree that Manhattan was always going to be the best place to live the center of the world whatever Troubles the city might be having in the short term there was no doubt in my mind that that things had to turn around ultimately what other city was going to take New York's Place one of the pieces of property that had always fascinated me was the huge abandoned Rail Yard along the Hudson River beginning at 59th Street and extending all the way up to 72nd Street

every time I drove along the wests side highway I found myself dreaming about what could be built there It didn't take a genius to realize that 100 acres of undeveloped riverfront property in Manhattan had a lot of potential but it was another story to consider trying to develop such a huge piece of property when the city was in the midst of a financial crisis I don't believe that you can ever be hurt by buying a good location at a low price at the time a lot of neighborhoods on the West Side were considered dangerous places

to live There were were welfare hotels on every side street and drug dealers in every Park I remember the New York Times running a long series of articles about the block between Central Park West and Columbus Avenue at 84th Street what a tough area it was even so you didn't have to look very far to see how easily it could all change even on the toughs side streets like West 84th there were magnificent old Brownstones only a few steps away From Central Park and on the Avenues especially Central Park West and Riverside Drive there were

beautiful old buildings with huge apartments and spectacular views it was only a matter of time before people discovered the value one day in the summer of 1973 I came across a newspaper story about the Penn Central Railroad which was in the middle of a massive bankruptcy filing this particular story said that the Penn Central trustees had Hired a company headed by man named Victor Palmieri to sell off the assets of the railroad among the assets it turned out were those abandoned yards in the west 60s as well as more yards in the west 30s the

deal Victor made with the pen Central was that each time his company managed to find a buyer for an asset he got a percentage of the sale I had never heard of Victor Palmieri but I realized immediately that he was someone I wanted To know I called his representatives and said hello my name is Donald Trump and i' like to buy the 60th Street yards the simplest approach is often the most effective I think they liked my directness and my enthusiasm I hadn't built anything yet but what I did have was the willingness to go

after things that people in a better position than mine wouldn't have considered seeking I went to meet Victor and we got on very well right from the start he was A very smooth attractive guy an Italian who looked like a w I told him how bad the 60th Street yards were that the neighborhood was in trouble and the city was in trouble and that I was probably crazy to be interested in the property at all if you want to buy something it's obviously in your best interest to convince the seller that what he's got isn't

worth very much the second thing I told Victor was how incredibly hard it was going to Be politically to get zoning approvals for such a big piece of undeveloped land I point pointed out that the community board would fight any development and that the process of going before the City Planning Commission and the board of estimate would be endless the third thing I did and probably the most important was to sell myself to Victor and his people I couldn't sell him on my experience or my accomplishment so instead I sold him on My energy and

my enthusiasm Victor banks on people and he decided to take a shot on me he he ended up suggesting that I develop not only the 60th Street yards but also the yards on West 34th Street in truth I probably oversold myself to him I had no other choice I was 27 years old at the time and I had never built anything in Manhattan nor had my father much as Victor liked me I don't think he could have Justified going with Me if he hadn't believed our company was big and powerful we had no formal name

for the company when I met Victor so I began to call it the Trump organization somehow the word organization made it sound much bigger few people knew that the Trump organization operated out of a couple of tiny offices on Avenue Zade in Brooklyn the other thing I promoted was our relationship with politicians such as Abraham beam who was elected mayor of New York in November of 1973 my father did belong to the same Democratic Club that AB beam came out of and they did know each other like all Developers my father and I contributed money

to beam and to other politicians the simple fact is that contributing money to politicians is very standard and accepted for a New York City developer we didn't give any more to beam than a lot of other developers did in fact it often seemed to me that perhaps because we knew beam personally He almost went out of his way to avoid any appearance that he was doing us any special favors instead I spent most of the four years when beam was mayor trying to promote the West 34th Street site for a Convention Center it was by

far the best site on the merits and we eventually got nearly every bigname New York City businessman behind us still beam never came out in support of the site until a few weeks before he left office nor did he ever give it his Official approval it was Ed kooch newly elected in 1978 who finally chose our site for the convention center no one so far as I know has ever suggested that Donald Trump and Ed cotch are close personal friends but that's getting well ahead of the story by building a close relationship with Victor from

the start I was able in effect to work for him rather than to be just another buyer that was terrific for me for example we drew up agreements giving me an Exclusive option to purchase the 60th Street and 30th Street yards but subject to zoning subject to approval by the court handling the perm Central bankruptcy subject to everything except my having to put up any money the pen Central even agreed to pay my development costs it was remarkable in a way the seller paying for the costs of the potential buyer still you have to put

it into perspective what sounds like a stupid Deal today was very different at a time when no one wanted to build anything and the city was dying Palm in turn helped give me credibility with the Press when he was asked by a reporter from Barons why he chose Trump over others he said those properties were nothing but a black hole of undefinable risk we interviewed all kinds of people who were interested in them none of whom had what seemed like the kind of Drive backing and Imagination that would be Necessary until this young guy Trump

came along he's almost a throwback to the 19th century as a promoter he's Lar ler than life at one point when I was hyping my plans to the Press but in reality getting nowhere a big New York real estate guy told one of my close friends Trump has a great line of but where are the bricks and mortar I remember being outraged when I heard that and I didn't speak to this guy for more than a year but looking Back I can see he was right it could all have gone up in smoke if I

hadn't managed to make one of those first projects happen if I hadn't finally convinced the city to choose my West 34th Street site for its convention center and then gone on to develop the Grand Hyatt I'd probably be back in Brooklyn today collecting rents I had a lot riding on those first projects on July 29th 1974 we announced that the Trump Organization had secured options to purchase the two Waterfront sites from the pen Central West 59th Street to West 72nd Street and West 34th Street to West 39th Street at a cost of $62 million with

no money down the story made the front page of the New York Times my original idea was to build middle inome housing on the sites at rents that seem ridiculously cheap today1 1110 to1 1225 a room but were considered moderately high at the time I planed to seek Financing from the Mitchell Lama program through which the city provided low interest long-term mortgages and tax abatements to builders the program had been initiated to encourage middle income housing the month before our announcement Victor and I and some of his people met with AB beam to sound him

out about our development plans although he was encouraging from the moment we went public he refused to take any position Until our plan had been considered by City agencies including the City Planning Commission the board of estimate and the local Comm Community boards he was a politician and he wanted to see which way the winds were blowing before he took a stand no sooner had I announced my plans publicly than other biders for the Rail Yards suddenly came out of the woodwork starett housing for example a company we were partners with on the starett city

housing project in Brooklyn made a bid of 150 million dollar contingent on financing and City approvals and all the rest on the face of it their bid was a lot higher than mine I'm the first to admit that I am very competitive and that I'll do nearly anything within legal bounds to win sometimes part of making a deal is denigrating your competition in this case I happen to genuinely believe that the star at bid wasn't legitimate that the company would never close the deal And would not be able to successfully develop the site even if

the deal did go through the fact is that anyone can bid anything particularly when there are all sorts of contingencies the same could be said about my bid except that by then I'd put in enough time and effort to have convinced palmieri's people that I was very serious and very committed in the end I managed to convince palmier that it made more sense to stick with my $62 million bid than to Take a flyer on starett the irony is that less than a year after I announced my plans for the site and beat my competition

the economic situation in New York City turned from bad to much worse in February 1975 the Urban Development Corporation the state agency that sold bonds to finance public housing defaulted on more than $100 million of repayment on its Bonds in September 1975 beam announced that because of the fiscal crisis the city Was suspending its own plans to finance the construction of virtually all new housing in November 1975 the state announced that it too was suspending any financing of lower and middle- inome housing for the next 5 years including a huge number of City projects that

had already received preliminary approval you couldn't get up in the morning without running across some new headline about the city's fiscal crisis I can't say that any of this made me truly Fearful about the city's future still when it became clear that I wasn't going to get any subsidies to build housing I decided to try a new tech I'd always thought that the West 34th Street site would be perfect for a new convention Center the problem was that nearly everyone else had other ideas for starters the city with the support of many prominent local businessmen

had already spent more than three years studying and trying to develop another Site by the Hudson River at 44th Street in the planning process alone the city acknowledged $13 million had been spent but people I knew told me that the number was actually closer to $30 million then just weeks after the city said it wouldn't Finance any new housing beam announced that the city was also freezing further spending on development of the 44th Street location I immediately hired Samuel H Linden bomb a talented attorney who specialized in Zoning and who had been working until then

on the 44th Street site the other person I hired to help with the convention center was a highly dedicated woman named Louise Sunshine who had extraordinary political connections Louise had been the fin Finance director for Hugh KY when he ran for governor in 1974 she was also treasurer of the state democratic party at first she worked for me for practically no pay later she became an Executive in our company but even as I was assembling a team to promote my site the city and state were hatching their own alternative to put the convention center in

Battery Park City opposite the World Trade Center in southern Manhattan in my opinion both sites West 44th Street and Battery Park were terrible choices malting my case was another matter I wanted to wage the battle in public but I was an unknown if I was going to attract attention for my site And win support for it I had to raise my profile I decided to call my first news conference Louise and Howard Rubenstein a major New York public relations executive helped attract support from several powerful people including Manfred orenstein majority leader of the state senate

and Theodore Keel the labor negotiator who was very powerful in New York politics Keel delivered a classic line at the press conference placing the new Convention Center in Battery Park he Said is like putting a nightclub in a graveyard for our part we put up a huge Banner that said Miracle on 34th Street and I announced before a ton of report orders that I could build my Convention Center for $110 million or at least $150 million less than the city had estimated it would cost to build at West 44 Street not surprisingly that raised some

eyebrows and even got us some attention in the Press but there was scarcely an approving peep from the politicians I Discovered for the first time but not the last that politicians don't care too much what things cost it's not their money in promoting my site the first thing I pointed out wherever I went was how important it was to build a Convention Center a lot of people were saying that the best solution in light of the city's fiscal crisis was to scrap the idea Al together to me that was classic short-sightedness for example in the

face of a sales drop most companies Cut back on their advertising budgets but in fact you need advertising the most when people aren't buying essentially that's what I said about a Convention Center building one I argued was critical to Reviving the city's image and ultimately to putting its economy back on track and I also told anyone who would listen how great my site was and how horrible the Alternatives were I pointed out that at 44th Street the convention center would Have to be built on platforms over the water which would be more costly more problematic

and ultimately more time consuming I said that the 44th Street site was too small that there was no room to expand it it and that because it was on the water you'd have to cross under the crumbling Westside highway to get to it finally I made a big deal out of the fact that you needed something called a non-navigable permit to build on the 44th Street site a non-navigable Permit which I became an expert about very quickly is the federal approval required to build on certain waterways and getting it requires an act of Congress I

was just as rough on the Battery Park site which was an even more ridiculous location at the absolute southern tip of the city I pointed out how remote it was from Midtown how far from hotels and entertainment and how inconvenient to public transportation I also circulated a state Study which concluded that building a Convention Center at Battery Park would require major reconstruction of the Westside Highway leading to it as well as the addition of at least 2,000 new hotel rooms most of all I talked about what a wonderful location I had on West 34th Street

it was on the right side of the highway the Eastern side which meant it was easily accessible it was closer to Subways and buses than the alternative sites I continued to make The case that the center could be built more cheaply on my site without dispossessing any tenants also because my site was so big there was plenty of room for expansion in the future when a group of graduate students in a class taught by city councilman Robert Wagner did a little study that raided our site the best I managed to get hold of it and

immediately christened at the Wagner report its namesake wasn't thrilled before long I Had everything going for me except the support of a few absolutely key people AB beam was at the top of the list once he gave up on West 44th Street beam got behind Battery Park and no matter how many great arguments I came up with for my sight he wouldn't budge another major opponent was John zotti a deputy mayor under beam he began going around town badmouthing my sight the reason I'm convinced was that he didn't want to admit that he'd wasted several

years of His life in millions of dollars of public money on a location that never made sense in the first place and that's exactly what I said publicly I accused him of being self-serving and Petty and a half dozen other things he got pretty riled up the battle received a lot of media attention and ultimately I think it was good for my site it became just another way to promote my sight's many advantages in the end we won by wearing everyone else down we never gave up and The opposition slowly began to melt away in

1977 beam appointed yet another committee to study the alternative sites and it concluded that we did have the best site on that basis beam finally gave us his support although not his signature just before leaving office at the end of the year in January of 1978 Ed KO took over as mayor and decided to do his own study I figured we were back to square one but things moved fast and once again our Site came out ahead finally in April 1978 the city and state announced that they had decided to purchase the 34th Street site

and build the convention center there it was a victory for me but more symbolically than financially for all the time I'd invested I earned much less than I deserved and nowhere near enough to justify the effort financially as my deal with the Penn Central was structured I was paid total compensation of about $833,000 based on the $112 Million price for the site that the city negotiated with pen Central in the end I offered to forgo my fee Al together if the city would agree to name the convention center after my family I've been criticized for

trying to make that trade but I have no apologies there wouldn't be a new Convention Center in New York today if it hadn't been for the trumps more important the city would have saved a fortune by letting me build the center Which I very much wanted to do instead edock decided by some logic I could never understand that because I'd helped arrange the sale of the property it was a conflict for me to be the Builder as well eventually I offered the city a deal that frankly was ridiculous for me I said I would bring

the entire job in for less than $200 million and that if there were any overruns I'd pay for them myself you won't find many Builders willing to put themselves on the line That way instead the city and state decided to oversee the job and the result was perhaps the most horrendous construction delays and cost overruns in the history of the building business a man named Richard Kahan was put in charge of the Urban Development Corporation and ultimately it was his job to oversee the convention center project Richard Gahan is a nice man but he had

visions of being the next Robert Moses it wasn't clear that he had the Experience or the talent one of the first things Kahan did was to hire IE as his architect I am is a man with a terrific reputation but in my view he often chooses the most expensive solution to a problem and is virtually uncontrollable immediately pay decided to design a space frame for the center a structural system that any professional builder will tell you is one of the most difficult to build and is especially vulnerable to cost overruns this is Particularly true when

you're dealing with the sort of huge space frame they needed for a convention center from the very start I told Kahan and his people that it was critical to build a parking garage simultaneously how can you have a Convention Center without parking they told me that a garage would hold up the city's environmental impact approval look I said to them those approvals are only going to be tougher to get later And at the very least you should begin a separate filing for the garage now so you can at least start the process they ignored me

and now they have no parking and no Prospect of building any in the near future the choice of where to put the entrance was equally ill considered if you put the entrance at the West the whole Center faces the Hudson river which is a beautiful view instead they built the entrance on the Eastern side of the building facing the traffic on 11th Avenue as I watched all these mistakes being made I became very angry and frustrated in 1983 when it was clear the construction of the convention center was already a disaster of delays and overruns

I wrote a letter to William Stern who by then had replaced Richard Kahan as president of the Urban Development Corporation for a second time I offered this time for no fee at all to oversee the project and to assure that it would get completed quickly and Without further cost overruns my offer was refused and a disaster eventually turned into a catastrophe by the time the convention center was finally finished last year it was four years behind schedule and at least $250 million over budget when you add interest the carrying cost for all those years of

construction the total cost was probably $1 billion or $700 million over budget the construction was a terrible disgrace and all the worse because no One raised a fuss about it when I was invited to attend opening day ceremonies in 1986 I refused what happened at the convention center is that the city and state took a great piece of property and a great project and ruined it through terrible planning and ridiculous cost overruns even if the convention center is ultimately a success it can never earn back all the money that was unnecessarily squandered to build it

the funny thing about devoting so much time And energy to the 34 Street site is that I never considered it anything to compare with the 60th Street yards the problem was that developing 60th Street proved even more difficult than promoting 34th Street the community opposition was Stronger the zoning was more complicated and the banks were highly reluctant to finance a huge residential housing project in a city still teetering on the verge of bankruptcy in 1979 I Reluctantly let my option on the 60th Street yards expire so that I could concentrate on other deals that seemed

more immediately promising the first one fittingly was with pal and the Penn Central for the purchase of the Commodore Hotel chapter 6 Grand Hotel Reviving 42nd street during the period when I was trying to make something happened with the two Westside yards I got more and More friendly with Victor Palam and his people one day late in 1974 I was in Victor's office and I said to him half jokingly listen now that I've got the options on the two yards what other properties does the pen Central own that I can buy for nothing as a

matter of fact said Victor we have some hotels you might be interested in it so happened that the Penn Central owned several old hotels within a few blocks of each other in Midtown the builtmore the Barkley the Roosevelt and the Commodore the first three were at least moderately successful which meant buying them was likely to cost more money than I wanted to spend the only one in in real trouble was the Commodore which had been losing money and defaulting on its property taxes for years as it turned out that was the best news Victor could

have given me I decided very quickly that the Commodore in the heart of New York at 42nd Street In Park Avenue next to Central Station had potentially the best location of any of the four hotels I still remember walking over to to look at the commodor the day Victor first mentioned it to me the hotel and the surrounding neighborhood were unbelievably run down half the buildings were already in foreclosure the brick facade of the Commodore was absolutely filthy and the lobby was so dingy it looked like a welfare Hotel there was one of those Sleazy

flea markets operating on the ground floor with a bunch of boarded up storefronts on on either side and derix lying in the doorways to most people it would have been a very depressing scene but as I approached the hotel something completely different caught my eye it was about 9 in the morning and there were thousands of well-dressed Connecticut and Westchester commuters flooding onto the streets from Grand Central Terminal and the subway stations below the city was on the verge of bankruptcy but what I saw was a superb location unless the city literally died millions of

affluent people were going to keep passing by this location every day the problem was the hotel not the neighborhood if I could transform the Commodore I was sure it could be a hit convenience alone would assure that I went back and told Victor I was interested in making a deal for the Commodore he was pleased because everyone else considered it a loser I also went to my father and told him I had a chance to make a deal for this huge Midtown hotel at first he refused to believe I was serious later he told a

reporter that his initial reaction to my idea was that buying the Commodore at a time when even the Chrysler Building is in receivership is like fighting for a seat on the Titanic I wasn't naive I saw potential But I also recognized a downside I could Envision a huge home run but I also knew that failing could bury me from the very first day I went to work work on the deal I tried to keep my risk to an absolute minimum and financially I succeeded but as the months went by the deal became more and more

complicated and difficult I kept investing more time and more energy and the stakes Rose for reasons unrelated to money I could talk big for only so long You know eventually I had to prove to the real estate Community to the press to my father that I could deliver the goods the Commodore deal was basically a juggling act but a much trickier one than I originally imagined first I had to keep Palm's people believing I was their best bet to buy the hotel while trying to avoid for as long as I could putting down any cash

at the same time I had to convince an experienced Hotel operator to come in with me before I Actually had a deal knowing that such a partner would give me more credibility with the banks when I went to seek financing and even a great part part wasn't enough I also had to try to persuade City officials that it was in their interest to give me a totally unprecedented tax break that savings I knew would make it far easier to prove to the banks that the numbers for my hotel made sense at a time when they

were loathed to lend money even for Projects in good neighborhoods the funny thing is that the city's desperate circumstances became my biggest weapon with palmary I could argue that I was the only developer around who would even consider buying a loser hotel in a decaying neighborhood in a dying city with the banks I could point to their moral obligation to finance new developments as a way to help get the city back on its feet and with City officials I could legitimately argue That in return for a huge tax abatement I'd be able to create thousands

of new construction and service jobs help save a neighborhood and ultimately share with the city any profits the hotel earned in the late fall of 1974 I began talking seriously with pomier about a deal eight or nine months before the Penn Central had invested $2 million on a renovation of the Commodore that was the equivalent of applying a coat of wax to a car that's just been in A major accident even after the renovation the pen Central was projecting a huge loss for 1974 and that didn't even include the $6 million that the hotel already

owed in back taxes the Commodore was a terrible cash drain on a bankrupt company in a short time we came up with a basic structure for a deal in simple terms I would take an option to purchase the hotel at a price of $10 million subject to my being able to uh Get tax abatement financing and a hotel company partner subject in other words to my rep in the entire deal together before I made the purchase in the meantime I would put down a non-refundable $250,000 for an exclusive option there was just one problem I

wasn't too eager to Fork over even $250,000 on a deal that was still very much a long shot in 1974 $250,000 was a huge sum of money for me so I stalled Contracts were drawn up but I had my lawyers find plenty of little legal points to argue back and forth over in the meantime I went to work to try to put the rest of the deal together what I needed first I decided was a really fantastic design one that would get people excited I set up a meeting with a young talented architect named de

scut we met at Maxwell's Plum on a Friday night and right away I liked deer's enthusiasm when I told him what I had in Mind he immediately started making sketches on one of the menus the key thing I told there was was to create something that looked absolutely brand new I was convinced that half the reason the commodor was dying was because it looked so gloomy and dark and and dingy my idea from the beginning was to build a new skin directly over the brick bronze if it could be done economically or glass I wanted

a Sleek contemporary look something with sparkle and Excitement that would make people stop and take notice and it was obvious to me that D understood what I had in mind after we ate I took dare and another friend back to my apartment the tiny Studio I was still living in on Third Avenue and I asked him what he thought about my furniture some people would just have said fantastic great but D didn't do that there's too much of it he said and he started moving furniture around and even pushed several pieces Out into the hallway

when he finished he'd managed to make the apartment look much bigger which I liked I hired Dar and paid him to come up with sketches that we could use in our presentations to the city and to Banks I also told him to make it appear that we'd spent a huge sum on the drawings a good-looking presentation goes a long way by the spring of 1975 we were pretty far along on a design then one evening in the middle of April dur called to tell me that he'd been fired from the architectural firm he worked for

Khan and Jacob's helmouth obata and cabam I knew he hadn't been getting along with his bosses at the same time I didn't want to hold up the project I needed the resources and The Prestige of a big firm to do a job this size and I figured it was going to be a while before dare made a new Association but he formed an association very quickly with a firm Named Gruen and partners and I was able to use the situation to my advantage the obata group desperately wanted to keep the job and so of course

did dare the competition gave me an opportunity to negotiate a lower architectural fee which I did in the end I went with DAR and paid him a very modest fee I also told him that doing this job would pay off big in the end this is going to be a Monumental project I said it's going to make you into a Star Dar wasn't thrilled about his fee but later he admitted that I'd been right about the impact that doing the Hyatt and subsequently Trump Tower had on his career during this same period early 1975 I

began to look for an operator for the hotel the truth was that I knew nothing about the hotel business I've learned a lot since then and today I operate my own hotels but at the time I was only 27 years old and I'd hardly Even slept in a hotel nonetheless I was trying to buy this monster building 1,500,000 square fet and proposing to create a400 room Hotel the largest since the construction of the New York Hilton 25 years earlier it seemed clear that I needed an experienced operator I also figured it probably had to be

one of the large chains and I wasn't totally wrong the chains may not be very exciting but they do give you access to a national reservation system Good referral business and basic management expertise from the start hayatt was at the top of my list Hilton seemed a little backward and old Sheran didn't excite me for much the same reasons and holiday in and Rada Inn didn't have enough class I like the Hyatt image their hotels had a a a modern look light and clean and a little glossy and that was what I had in mind

architecturally for the Commodore in addition hayatt was Very strong on conventions which I thought could be a big business for a hotel in the Grand Central Area I also liked Hyatt because I thought I might have more leverage with them in making a deal chains like Hilton and Sheran already had hotels in New York City and they weren't necessarily hungry to build new ones particularly with the city in the dumps hayatt on the other hand was very successful in other cities but still had no Flagship presence in New York City and I'd heard they wanted

one very badly in late 1974 I called up the president of hayatt a guy named Hugo M friend Jr and we arranged to meet I wasn't terribly impressed with skip friend but it turned out that I was right about Hyatt's desire for New York Flagship and we began to discuss a partnership on the Commodore fairly rapidly I made a tentative deal with him full of Contingencies I was very happy and very proud of myself then two days later I got a call and Skip said no I'm sorry we can't do the deal that way this

became a pattern we'd negotiate new terms shake hands a few days would go by and the deal would suddenly be off again finally a guy I'd become friendly with at Hyatt a high level executive called I'd like to make a suggestion he said I think you should call Jay pritzker and deal with him Directly I'd barely heard of pritsker which tells you something about how young I was at the time I knew vaguely that the pritsker family owned a controlling interest in he at but that was about all my Hyatt friend explained that pritzer was

the guy who really ran the company suddenly it dawned on me why my deals kept coming apart if you're going to make a deal of any significance you have to go to the top it comes down to the fact that everyone underneath the Top guy in a company is just an employee an employee isn't going to fight for your deal he's fighting for his salary increase or his Christmas bonus and the last thing he wants to do is at his boss so he'll present your case with no real opinion to you he might be very

enthusiastic but to his boss he'll say listen a guy named Trump from New York wants to make such and such a deal and here are the pros and cons and what do you want to do if it turns out his boss Likes the idea he'll keep supporting you but if the boss doesn't like it the employee will say yes I agree but I wanted to present it to you by now it was the early spring of of 1975 and I called Jay pritsker and he seemed happy to hear from me Hyatt was based in Chicago

but pritzer told me he was coming to New York the next week and we should meet could I pick him up at the airport I didn't go around in limousines at the time so I picked him up in my own Car unfortunately it was a very hot day and it was extremely uncomfortable in the car if it bothered Jay though he didn't show it I realized right then that Jay is very focused when it comes to business he can be funloving when he's relaxed but mostly he's tough and sharp and he plays very close to

the vest fortunately I had no problem with that so we got along pretty well the other thing about Jay is that he doesn't much trust people in business which is The way I tend to be we were wary of each other but I think there was also a mutual respect from the start we managed to make a deal in a short time we agreed to be equal Partners I'd build the hotel and would manage it once it was built more important than coming to a tentative agreement was the fact that from then on I was

able to deal directly with Jay when difficulties arose to this day though we've had our disagreements the partnership is strong Because Jay and I can talk straight to one another on May 4th 1975 we called a joint press conference and announced that we'd agreed as partners to purchase gut and fully renovate the Commodore assuming we could get financing and tax abatement the announcement of the partnership with hayatt coupled with dar's preliminary drawings and rough construction cost estimates finally gave me some ammunition to bring to the banks um by Then I had hired Henry Pierce a

real estate broker with a special expertise in financing together we went calling Henry Pierce was the head of a firm called Pierce mayor and Greer and he was a fantastic guy he was in his late 60s but he had more energy than most 20y olds and he was unrelenting in his quest for financing for this job his persistence helped and so did his age we'd go in together to see these very conservative Bankers most of whom had Never heard of Donald Trump in many ways I was much more conservative than Henry but it reassured these

Bankers to see me alongside this white-haired guy with whom they'd been dealing forever our pitch was very much the one I made when I first met Victor Palmieri I would talk about the great Trump organization and all we had done I would push very hard the fact that we built on time and on budget because I knew that the banks were scared to death of cost Overruns which can kill even a good loan we would show these Bankers drawings and scale models of this huge gleaming new hotel I plan to build we would talk about

how the job was going to turn the neighborhood around how it would create thousands of jobs we would go on and on about the Fantastic incomparable hayat company and we'd even mention the great tax abatement we hop to get from the city this last point would usually stir some interest but unfortunately we were In something of a catch 22 until we had our financing in place the city wasn't interested in seriously discussing tax abatement and without tax abatement the banks weren't very interested in talking about financing eventually we decided to take a new Tac realizing

that the positive approach wasn't working we tried to play to their guilt and their fear and their sense of moral obligation forget us we'd say you owe it To New York the city is in trouble but it's still a great City and it's our city and if you don't believe in it if you won't invest in it how can you expect it to turn around if you lend millions of dollars to third world countries and Suburban shopping mall magnetes don't you also owe some obligation to your own City nothing seemed to work on one occasion

we found a bank that seemed ready to say yes then at the last moment The guy in charge raised some trivial technical issue that just killed the whole deal this guy was what I call an Institutional man the type who has virtually no emotion to him it's purely a job and all he wants to do is go home at 5 and forget about it you're better off dealing with a total killer with real passion when he says no sometimes you can talk him out of it you rant and you Rave and he Rants and Raves

back and you end up making a deal but when a Machine says no it's very tough we gave this guy every argument in the world and after listening he didn't Flinch and he didn't move he just said very slowly and steadfastly the answer is no Donald no no no after that experience I remember saying to Henry let's just take this deal and shove it but Henry refused to give up he and Jerry shreer my lawyer kept me going and we continued to push it was increasingly clear that the only way I was going to get

financing was if The city gave me tax abatement My Hope rested in a program called the business investment incentive policy which the city adopted in early 1975 it was designed in a bad Market to encourage commercial development by providing tax abatements to Developers in the middle of 1975 I decided to approach the city even though I hadn't found financing to most people that would have been ridiculous I took it one step further I went in and Asked for the world for an unprecedented tax abatement on the assumption that even if I got cut back the

break might still be sufficient in a funny way it was like a high stakes poker game in which neither side has very strong cards so both are forced to Bluff by this point I almost couldn't afford to walk away from the deal if I wanted to maintain any credibility the city meanwhile was more desperate than ever to encourage Development I first made my case to the city in October 1975 and it was direct the Commodore was losing money and deteriorating fast the Grand Central neighborhood was turning into a slum the highet hotel chain was ready

to come to New York but there was no way we could afford to put up Millions to build a new hotel unless the city gave me some relief on property taxes the city's Economic Development people agreed to structure a program in Which we'd effectively be partners the city would give me a total abatement of property taxes for 40 years in return I would pay the city a yearly fee and a share of any profits the hotel made the mechanism was fairly complicated first I would buy the Commodore from the Penn Central for $10 million six

million of which would immediately go to the city to pay off the back taxes then I would sell the hotel to the city for $1 and they would lease it back to me for 99 Years my rent paid in lie of all property taxes would begin at $250,000 a year and Rise by the 40th year to $2.7 million also I would pay the city a percentage of the profits at the end I'd be paying the equivalent of full property taxes based on the hotel's assessed value as of the time we were making our deal the

whole Arrangement was subject to approval by the city's Board of estimate which me to consider It for the first time in late December 1975 a week before the meeting I went to Victor palm and explained that if he wanted the city to take our abatement seriously we had better make it clear that the Commodore was in deep trouble and that it might not survive much longer he agreed with me on December 12th Palmieri announced that the pen Central had lost another $1.2 million on the Commodore during 1975 who was anticipating worst losses For 1976 and

as a result intended to close the hotel permanently no later than June 30th 1976 two days later there was another significant announcement which I hadn't anticipated Portman Associates a company that had spent the past two years trying to get financing for a huge new hotel across town in Times Square revealed that it was scrapping the project because it had been unable to get Bank Support in a way that was bad for me because I needed all the evidence I could get that investing in New York made sense on the other hand in dealing with the

city I could point to the Portman Fiasco as clear proof that the only chance I had to get financing was if they gave me my tax abatement early in 1976 the board of estimate decided to switch the structure of the tax abatement program instead of my selling the hotel To the city and then leasing it back I would do the whole deal through the state's Urban Development Corporation the reasons were technical but actually the change was advantageous to me unlike the city the UDC has the power of condemnation meaning the statutory right to evict quickly

and efficiently something that a private developer can spend months or even years trying to do but in incredibly getting the tax abatement still didn't convince the Banks we had a viable Enterprise when you look back it seems almost hard to believe that the banks could doubt our numbers what it shows you is how bad things were in 1974 the Commodore was charging an average of $20 80 cents a night for a room and as long as occupancy remained above 40% the hotel nearly broke even in our entirely new hotel we projected charging an average of

$48 a night for rooms with an average occupancy rate of 60% those were hardly Great numbers but the banks insisted we were being too optimistic as it turned out by the time we opened our doors in September 1980 the city had turned around and we were able to charge $115 for a single room with an average occupancy of more than 80% by July 1987 we'd raised the room rate to $175 and now we average almost 90% occupancy in the end we got our financing from two Institutions the first was Equitable life Assurance Society which in

addition to its other businesses owns a lot of real estate George peacock the head of Equitable real estate agreed to put up $35 million for the Grand Hyatt primarily because he and his people thought it would be good for the city the other institution was the bowy Savings Bank which happened to have its headquarters right across the street from the Commodore and agreed to lend $45 million their motivation was practical they didn't want to see their own neighborhood go to hell I could have saved millions and millions of dollars just by refurbishing the old commodor

rather than creating a brand new building indeed almost everyone fought against my spending the extra money on a major renovation from the day we went public with our plans to cover the commodor brick facade with an entirely new curtain wall of Highly reflective Glass critics and presid observationist were Furious they were outraged that I wasn't making some attempt to fit in with the architecture in the rest of the neighborhood the classical look of Grand Central Station and the ornamented Limestone and brick Office Buildings up and down the block in my view staying with that look

would have been suicide I said to these critics hey fellas do me a favor and don't tell me about these great Monuments because the Chrysler Building is in foreclosure the neighborhood is a disaster and it's obvious something's not working if you think I'm going to leave the facade of the old Commodore the way it is you're crazy there's no way it's strange how things can turn around many of the same critics and preservationists who hated the original concept of my building now love it what they discovered is that by choosing this highly reflective glass I've

created Four Walls of mirrors now when you go across 42nd Street or go over the Park Avenue ramp and look up at the Grand Hyatt you see the reflection of Grand Central Terminal the Chrysler Building and all the other landmarks which otherwise you might not have noticed at all the other new element that had a dramatic effect was the lobby most hotel lobbies in New York are dull and unexciting I was determined to make ours an event a place people wanted to visit We chose a luxurious Brown Paradisio marble for the floors we used beautiful

brass for the railing and columns we built a 170t glass enclosed restaurant pitched out over 42nd Street which no one had ever done before I'm convinced that if I'd left the Commodore the way it was old and dull and nondescript it would have had absolutely no impact and it wouldn't be doing the business it is doing today the Grand Hyatt opened in September 1980 and it was a hit from the First day gross operating profits now exceed $30 million a year high job was to manage the hotel so my role was essentially over but the

fact is I still had a 50% interest and I'm not exactly the hands-off type that caused some problems at the start I would send over one of my Executives or more often my wife just to see how things were going and hayatt wasn't happy about that one day I got a call from the head of all the Hiatt hotels Patrick Foley and he Said Donald we have a problem the manager of the hotel is going nuts because your wife comes by and she'll see dust in the corner of the lobby and call over a porter

to clean it up or she'll see a doorman in a uniform that's not pressed and she'll tell him to get it cleaned unfortunately my manager happens to be a guy who has a problem with women to start off with but in his defense he's running a hotel with 1,500 employees and there's got to be a chain Of command or else a business like this just doesn't work so I said to Pat I understand what you're saying and I agree with you that it's a real problem but as long as I own 50% of the building

I'm not going to walk in and make believe everything's fine if it isn't Pat suggested we meet the following week I wanted to work this out because I like Pat and I respect him and I think he is an extraordinary executive Pat has one of those great Irish Personalities he'll walk through the Hyatt Regency in Washington DC or West Palm Beach Florida and he'll know everyone's name he'll remember their families he'll kiss the chef tell the porter he's doing a great job say hello to the Lifeguard and the maids by the time he leaves an

hour later everyone feels uplifted like they're 10 feet tall so I I met with Pat and he said I I've decided what to do I'm going to change managers I'm going to put in one of my Best guys he's uh Eastern European like your wife he's also very flexible and they'll get along great that way she can come in and talk to anyone she wants and everyone will be happy sure enough Pat made the switch and then his new manager did something brilliant he began to bombard us with trivia he'd call up several times a

week and he'd say Donald we want your approval to change the wallpaper on the 14th floor or we want to introduce a new menu in one of the Restaurants or we are thinking of switching to a new laundry service they'd also invite us to all of their management meetings the guy went so far out of his way to solicit our opinions and involve Us in the hotel that finally I said uh leave me alone do whatever you want just don't bother me what he did was the perfect Ploy because he got what he wanted not

by fighting but by being positive and friendly and solicitous as successful as our Partnership has turned out to be there was one small clause in the deal that I think may be even more valuable than my half ownership of the Grand Hyatt it's something called an exclusive Covenant and its effect is to permanently prohibit hayatt from building competing hotels in the five burrows of New York without my permission I first tried to get the Covenant from Jay pritsker at the time we made our deal but he refused Jay is a smart guy and he wasn't

About to foreclose the future expansion of his Hotel chain in one of the biggest cities in the world we finally got to the closing and just before we all sat down I was alone with an executive from the bank I pointed out that this was a rather big and risky investment the bank was making and that one way to further protect the loan might be to insist on a restrictive covenant so that hayatt couldn't throw up a second Hotel two years later right Down the street the banker saw the implications immediately he stormed into the

room where the Hyatt people were sitting and he said hey fellas we're putting up tens of millions of dollars which is a lot of money and we're not going to make this loan unless we get a covenant from Hyatt saying you won't open up any other hotels in New York I was taking a chance because right then and there the whole financing could have fallen through but what I had going for Me was that Jay pritzer wasn't at the closing the executive representing hayatt tried to reach Jay but it turned out he was off in

Nepal mountain climbing and he couldn't be reached meanwhile the bank gave high at one hour to make a decision or that was the end of the financing while we were waiting I wrote up a cover myself in effect it said that hayatt can't open any competing hotels in the New York area including the two airports The Only Exception is the right to build one small luxury hotel which I don't believe would be economically feasible anyway and before the hour was up they agreed to sign the document I'd written I now have in my will a

clause describing the importance of that restrictive covenant just on the the chance that one of my heirs happens not to be that sharp what I don't want after I'm gone is for some nice smooth person from hayatt to come to one of my heirs And say listen you wouldn't mind if we threw up a little non-competitive hotel at Kennedy Airport would you the simple fact is that hayatt would love to build more hotels by retaining the right to say yes or no I own something very valuable I've already seen the proof and pritsker a wonderful

man who was the patriarch of his family and who died recently used to call me frequently when he came to New York and and his son Jay were very Different men what they had in common was Brilliance but where Jay keeps very much to himself aan was extremely effusive and outgoing almost a teddy bear they were a perfect combination and built the foundation of the company from nothing and he got the banks to back him not because he had great great assets but because they loved him now the company has a huge base and Jay

who is a much cooler personality doesn't need the banks to Love him he can be very tough and they still want to do business with him anyway aan would come to New York and he'd call and he'd say hi y Don I'm here visiting and I'd love to stop over and just say hello to you for a couple of seconds and I'd say and I know what you're doing you want to build a hotel someplace in New York don't you and he'd say I'd love you to let us do that Don because it's not going

to hurt you and it's good for us and it's good for Everyone and when an would do that I'd find some way of changing the subject because I liked him so much that I never had the heart to say no to him directly there are very few people I feel that way about and died in 1986 and I happened to have an extremely important business meeting in my office on the day of his funeral in Chicago it was a deal I very much wanted to make and I'd been planning it for Months and people were

flying in from all over to be there uh but I cancelled the meeting in order to go to Chicago and as it turned out I was never able to make that particular deal I have no regrets there are some people in your life you just want to pay your respects to no matter what it involves and in the end I think one reason my partnership with hayatt has remained so strong beside the fact that the hotel has been so successful is that I always felt such Affection for in pritsker chapter 7 Trump Tower the Tiffany

location it was not a suspicious start my meeting with Franklin jarm from the time I took an apartment in Manhattan in 1971 and began walking the streets the site that excited me the most was the 11-story building at 57th Street and Fifth Avenue that housed bonwit teller the main attraction was location but in addition it was on an unusual large Piece of property in my mind that combination made it perhaps the greatest single piece of real estate in New York City there was the potential to build a great building in a prime location bonwit was

owned by janesco a company founded in the late 1950s by a gentleman named W Maxi jarm who built it into a real highflying conglomerate Maxi started off with a shoe company and then he began buying other shoe companies and eventually he moved into retail stores Purchasing Tiffany and Henry Bendel and bonwit Teller but then in the mid 1970s a tremendous battle began to take shape between Maxi and his son Franklin they were both strong guys with their own ideas and they both wanted control it became so bitter that they finally came to blows at a

stockholder meeting since I'm so close to my father I found the whole thing hard to believe but the bottom line was that Franklin finally Managed to push his father out and take over and so in 1975 it was Franklin I called to discuss my interest in bonwit at the time I really had no track record I was trying to get the Grand Hyatt off the ground and I was still fighting for my Convention Center site and nothing had yet gelled but for whatever reason Franklin jarmin was willing to see me we met and I told

him straight out that I would love to buy the bonwit teller store and build I knew this was a tough sell so I tried to find ways to make the deal sound more attractive I suggested for example that I would build above his store and that he could keep it open during construction that's not really feasible but the point was that I would have done almost anything to get that piece of property even before I'd finished my pitch I could see from the look on Franklin's face that he thought this this was perhaps the most

Preposterous Thing he had ever heard when I was done he said to me very politely but also very firmly you've got to be crazy if you think there's any way we'd ever sell this incredible site we shook hands and I left believing that under no circumstances would I or anybody else ever purchase this property it was a Dead Issue even so I didn't give up I began writing letters to Franklin jarm first I wrote to thank him for seeing me a couple of months later I Wrote to ask if he might reconsider when I got

no answer and a few more months had gone by by I wrote again and said I'd love to drop by and see him again more time passed and I wrote another letter suggesting a whole new way to make the deal I was relentless even in the face of the total lack of encouragement because much more often than you'd think sheer persistence is the difference between success and failure in this case Franklin jman never Budged from his original position but as it happened the letters I wrote eventually did have an impact almost three years passed after

my first meeting with Franklin during that time janesco began to experience very serious financial problems I didn't give any of it a second thought until one evening in June 1978 when I picked up Business Week Magazine and read an article about a management change at janesco the banks trying to save the Company from declaring bankruptcy had insisted that a new chief executive be put in charge the man's name was John Hanigan and he was something of a turnaround artist he just successfully saved AMF Brunswick which had been ready to go down the drain his specialty

was something called pruning which is just a nice way of saying that he took companies apart in other words he'd sell sell sell the assets get rid of the debt and pay off The banks the key for a guy like Hanigan was that he came to companies without any emotional attachment to its people or its products as a result he had no trouble being ruthless he was a tough smart totally bottomline oriented guy at nine sharp the morning after I read the article I called janesco and I got Hanigan on the phone he just begun

his new job but to my surprise he said I'll bet I know what you're calling about you do I said and he said yeah you're the Guy who has been writing all those letters about wanting to buy bonwit teller when would you like to meet as soon as possible I said he said can you be here in half an hour it just shows you that sometimes making a deal comes down to timing somebody else might have called him a few days or a few weeks before me and the whole thing could have turned out differently

instead I went to see him and we had a very good meeting it was clear that the company needed Cash very badly and very quickly and that he had no reluctance about selling bonwit or any other asset for that matter it was like a giant garage sale by the time I left I thought there was a good chance we'd make a deal very quickly then something funny happened Jack Hanigan suddenly refused to take my phone calls I must have called him 10 or 15 times over a period of the next several days but I never

got through I figured that some other bidder had come Along and that in any case I was in trouble I asked Louise sunshine to speak to her friend Marilyn Evans whose husband David owned a shoe company that he'd sold to janesco several years before he'd become a fairly large stockholder in janesco and that gave them some clout Marilyn said they'd speak to Hanigan on my behalf and almost immediately he called me back I never found out what the delay had been about but Hanigan suggested we Have another meeting this time I brought my lawyer Jerry

shreer and we were able to make a deal it was really quite simple janesco owned the bonwit building but not the underlying land for the land they had a lease with 29 years left to run I agreed to buy the building and their land lease for the sum of $25 million in my mind that was just a first step in order to put up the building I had in mind I was going to have to assemble several other adjacent pieces And then seek numerous zoning variances that's often the situation in New York real estate but

in this case I was dealing with an exceptionally prestigious visible site which meant every move I made was going to be unusually difficult and very carefully scrutinized my most immediate problem was trying to keep the deal secret I was convinced that if anyone got wind of the fact that the bonwit site was up for sale before I signed a contract I'd Never make the deal once the bunt store went on the open market everyone in the world was going to be after it and the asking price would go right through the roof that's why after

I'd shaken hands with Jack I said to him listen I'd like to draw up a quick simple letter of intent that says that I've agreed to buy the property for $25 million and you've agreed to sell it subject only to the drawing of reasonable documents that way neither of us can walk away from the Deal to my surprise Jack saidwell that sounds reasonable now Jack is a very smart man but he wasn't a New York guy and he didn't realize how hot this property was so valuable that even in the middle of a depression there'd

still be people lined up to buy it Jerry and I drew up the letter of intent right then and there Jack read it and the only change he made was to stick in a clause making the sale subject to approval by his board of Directors when he handed it back to me I said to him listen Jack I can't live with that clause in three or four weeks you might tell your board of directors not to approve the deal and that would defeat the whole idea of this letter of intent then I asked whether he

needed approval from the board of directors to sell the store he said he didn't and I said let's just take this one Clause out he gave it a little thought and finally he agreed I left the meeting with a deal And something on paper to confirm it once I had the letter of intent from Jack Hanigan but before I had a contract I went to see a man named Conrad Stevenson at the Chase Manhattan Bank my father had always done his business with Chase and so I figured that was the best place to go first

for the $25 million I needed uh to make the Bonwood purchase I explained the deal to Connie that I was buying the bonwit building in their land lease which had 29 years left to run and That I hoped to put up a great skyscraper on the site immediately he said unless you own the underlying land that's not a long enough lease to justify financing in other words he was reluctant to put up money for me to purchase a site that 29 years later when my lease ran out could be taken over by the owner of

the underlying land but I'd taken that into consideration I said to Connie look I've got two Alternatives and I think either One could work the first one I told him was to do a very inexpensive conversion into an office building with retail on the ground floor because I'd be paying such a low rent through the remainder of the lease $125,000 a year which was peanuts even then I was confident I'd be able to pay off my mortgage and still make a nice profit over the next 30 Years But Connie wasn't totally convinced and even I

considered the First option my worst case scenario what I really wanted to do I explained was to purchase not only the building and the lease but also the underlying land then I said I could build a big building without risk of losing it at least expiration when I told Connie that the owner of the underlying land was the Equitable life Assurance Society he got excited for the first time that we both agreed gave me a leg up since I already Had a great relationship with Equitable they' put up a big percentage of the financing for

the Hyatt and by this time the Hotel was under construction things were going very well and everyone was feeling terrific about the deal the next thing I did was to set up a date to see George peacock the head of Equitable real estate it was September 1978 just a month since I'd first sat down with Jack Hanigan George and I met And I told him I was in the process of purchasing the bonwit lease for which Equitable owned the land and that I saw a chance to forge a partnership that could be very good for

both of us I would contribute my lease I said if they would contribute their land together as 50-50 Partners we'd build a great new residential and office building on this incredible site Equitable could have chosen simply to hold on to the site until the bonwit Lease ran out and then own it outright but the downside I pointed out to George was that then they would have to settle for a meager annual rent from a lease negotiated long before the value of New York real estate had begun to escalate I also told George that my other

option was to renovate the existing building and earn a more modest but still decent profit over the next 30 Years in truth I was no longer certain that I could get financing for such a Deal but I didn't want him to think that a partnership with Equitable was my only option then he'd just feel free to drive a much harder bargain with me fortunately George took to the idea of a partnership almost immediately he was skeptical that I'd get the zoning necessary to build the huge building I had in mind but he'd also seen what

I'd achieved with the Commodore by the time I left his office he'd given me a commitment subject to my Delivering on my promises once again I found myself juggling provisional commitments my next move was to use my first two commitments for the bonwit lease and the Equitable land to try to get a third from Tiffany specifically I wanted to buy the air rights above Tiffany which was directly adjacent to the bonwit site at the corner of 57th and fth by purchasing those rights I'd get something called a merged zoning lot which would allow me to

build a much Larger building unfortunately I didn't know anyone at Tiffany and the owner Walter hoving was known not only as as a legendary retailer but also as a difficult demanding Mercurial guy even so I'd always admired hoving because everything he'd ever touched had turned to Gold when he ran Lorden Taylor it was the best and when he ran bonwit teller it was the best and so long as he ran Tiffany it was the best I'd seen him at parties and he was a man with impeccable Manners perfect white hair beautifully tailored suits and an

imperial Style if you were casting a movie about the president of Tiffany Walter hoving would get the part I decided to be very direct I called hoving on the phone and introduced myself I was very polite and very respectful and he agreed to see me by this time Dar Scott had done a scale model of the building I hoped to build as well as one for an alternative building in the event that I didn't get Tiffany's air rights I brought both models to the meeting I said to hoving look I want to buy your Aires

because that will allow me to build a much better building that you yourself will like much more by selling me air rights you will preserve Tiffany forever no one will ever be able to build over it and therefore no one will ever try to rip it down and the other reason to sell I told hoving was that if I didn't have his air rights for technical reasons the city Would require me to put in lot line Windows tiny little windows with wire mesh which would look absolutely horrible rising up 50 stories Direct directly over Tiffany

with his air rights on the other hand I'd be permitted to put in beautiful picture windows on the side of the building overlooking Tiffany at that point I showed hoving the two models one a magnificent building you did which is essentially The design of Trump Tower today the other my hideous alternative I'm offering you $5 million I said to Walter hoving to let me preserve Tiffany in return your telling me something air rights that you'd never use anyway hoving had been a Tiffany almost 25 years he' built it into an incredible success and naturally he

took great personal pride in his creation I was Playing to that and it worked he immediately liked my concept look young man he said I am going to make a deal with you at the price you've suggested I just hope that you do as nice a job as you say you will because I want to be proud of it in the meantime I have one small problem I'm going away with my wife for a month and I won't have time to devote to this until I get back immediately I started to get nervous I said

Gee Mr hoving that's a Big problem because if I have your air rights I can build a totally different building and that's the basis on which I'm going to seek my zoning variants if for some reason you change your mind while you're away I'll have done done a great deal of architectural work and Zoning work which I'll just have to throw out Walter hoving looked at me as if I'd insulted him young man he said perhaps you didn't understand I shook your hand I made a deal with you that's That I was speechless you have

to understand where I was coming from while there are certainly honorable people in the real estate business I was more accustomed to the sort of people with whom you don't want to waste the effort of a handshake because you know it's meaningless I'm talking about the low lives the horror shows with whom nothing counts but a signed contract with Walter hoving I realized I was dealing with a totally different type a gentleman who Was genuinely shocked at any suggestion that he might reneg on a deal he also had a way of talking down so that

he actually made me feel a little guilty for even suggesting that anything could possibly go wrong in our deal as it happened Walter hoving went away and no sooner had he left than Philip Morris made a deal to buy the air rights over Grand Central at a price far in excess of what I'd agreed to pay for the Tiffany air rights which were in a much Better location then during that same month several more air RS deals were made also for very big numbers quite simply New York City was recovering and the real estate market

was beginning to go through the roof I knew hoving was honorable but I couldn't help worrying about how he was going to feel when he heard about those other deals several days after he returned we met to talk over some points In our deal sure enough even as we sat down two of his Executives began to try to talk him out of making the deal by pointing out what had happened in the market I was upset but I could see very quickly that hoving was even more upset gentlemen he said I shook hands with this

young man over a month ago when I make a deal that's the deal whether it's a good one or a bad one and I trust I won't have to explain myself again that was the end of that later I heard that Hoving went even a step further during this same period he'd apparently decided to make another deal much bigger than the one with me to sell Tiffany to the Avon Corporation I thought Avon was a rather second rate buyer for a classy store like Tiffany on the other hand they'd offered to pay such an inflated

price that I couldn't blame hoving for agreeing to sell however as one of the conditions of its purchase Avon wanted hoving to agree not to go through with The air rights deal with me hoving I heard stood totally firm if Avon had a problem with the air rights deal he told their Executives then they didn't have to buy his store they dropped the demand and bought the store and my deal went through Walter hoving was just a totally honorable totally classy man that's exactly what made him such a brilliant retailer and it's why Tiffany has

never been the same since he left um I'll give you a Small example Hing had a policy at Tiffany that when his best customers came in they could pick out what they wanted sign for it and be build later it was very simple and very elegant no sooner did Avon take over than their team of accountants started instituting new policies including the introduction of little blue plastic Tiffany credit cards that was fine except that all of a sudden Tiffany best customers were told that They too had to Use the little plastic cards it was not

only stupid it was self-defeating you want your best customers to feel special before very long hoving who'd agreed at first to stay on as a consultant got fed up and left that just made things worse as long as hoving ran Tiffany for example you'd never see Peddlers out front on the street selling fake watches and cheap jewelry blocking pedestrians and degrading Fifth Avenue whenever Walter hoving saw a peddler He'd go to his people and he'd start screaming in his dignified manner how dare you let them do that and within minutes The Peddler would be gone

but as soon as hoving left a dozen Street Peddlers immediately set up shop in front of Tiffany and they haven't moved since however I learned a lesson from Walter hoving I now employ some very large security people who make absolutely sure that the the street in front of Trump Tower is kept clean Pristine and free of pedlers once I got Tiffany's air rights there was just one more parel I needed adjacent to Tiffany's along 57th Street and leashed by bonwit was a tiny site perhaps 4,000 square fet that was critical if I was going to

build the building I had in mind under the zoning regulations you're required to have a minimum of 30 ft of open space a rear yard behind any building without this last piece I would have been forced to chop the rear yard Out of the building we'd already designed and that would have been a disaster the piece I wanted was owned by a man named Leonard candell by buying the overall bonwit lease I effectively controlled the site but once again my problem was a short lease it had less than 20 years to run and also included

Provisions that made any zoning changes practically impossible fortunately Leonard candell like hoving is a totally honorable man Leonard began in real estate by buying apartment buildings in the Bronx in the 30s and 40s but unlike most small landlords he decided to get out when he saw rent control coming he sold all his buildings and came to Manhattan where he began buying up lease holds on Prime Property meaning the land under buildings as the market Rose Leonard became very rich and with none of the problems of having to run the buildings himself meanwhile the landlords who

Stayed in the Bronx went down the tubes because sure enough rent control proved to be a disaster for them one reason I'd left Brooklyn in my father's business was to escape rent control and so from the start Leonard and I had an affinity my problem was that Leonard wasn't a seller it wasn't a matter of price or that he had any particular attachment to his 57th Street parcel it was simply that Leonard didn't sell anything on the On the theory that in the long run land prices in Manhattan were headed in Only One Direction and

that was up he was exactly right of course and though we got along fine Leonard wouldn't budge then one day I discovered an unexpected bonus in my Tiffany deal I was reviewing my air rights contract when I came across a clause that gave Tiffany an option to purchase the adjoining candel property within a certain time frame I said to myself holy Christmas this could give me a lever to make a deal with Leonard so I went back to Walter and I said listen you're never going to buy that candal site so would you mind if

I also bought your option H as part of my deal Walter agreed we put it into my deal and immediately I exercised the the option at first Leonard took the position that I didn't have the right to exercise the option because it belonged to Tiffany and therefore was Non-transferable Leonard may have been right but it was also possible in a litigation that I would win the right to exercise the option when I pointed this out to Leonard we sat down together and in no more than 20 minutes we made a deal that was good for

both of us I agreed to withdraw my exercise of the option and in return Leonard agreed to extend my lease on the site from 20 years to 100 years which was long enough to make it financeable he also rewrote The lease to eliminate any prohibitions against resoning and while I agreed to pay a slightly higher rent it was still very low for a long lease on such a prime site Leonard and I shook hands and we've remained very good friends it's funny how things turn around Leonard is an older man and in the past couple

of years he's begun giving thought to his heirs and his estate early in 1986 he called and said he'd like to make me a Gift of a 15% interest in the land under the Ritz Carlton Hotel on Central Park South which is one of his more valuable Holdings in addition he gave me control over the disposition of the land when the hotel's lease comes up in approximately 25 years his purpose Leonard told me was to put the land in the hands of someone he thought would get the most value from it which in turn would

benefit his heirs who retain a majority ownership Leonard Is a very generous man and he is also very smart I'll be fighting like hell for the kandell family by the time I got the kandell site on 57th Street it was December 1978 and I was in a delicate situation I pieced together everything I needed I'd managed to keep the Deal completely secret but I still had no contract with janesco as 1979 began my lawyers were still discussing a few final points with the janesco lawyers and we expected to Sign contracts no later than February but

in mid January word finally began to leak out to the real estate community that janesco might be making a deal to sell the bonwit site just as I'd predicted janesco was immediately besieged with interested buyers for the property among them wealthy Arabs with oil boom money to burn and sure enough janesco suddenly began trying to back out of the deal even as our contract was being prepared it became clear that if If janesco could find a way to break the deal it would it was then that I thanked my lucky stars I'd gotten that onepage

letter of intent from Jack Hanigan without it there was zero chance my deal would have gone through I'm not at all sure the letter would have proved legally binding but at the very least I could have litigated it and held up any sale of the bonwit property for several years naturally I let janesco know I fully intended to do just that if they Reneged on my deal with creditors breathing down their NE janesco I knew didn't have a lot of time on the morning of January 20th I got a call that proved to be a

blessing it was from d wedia a reporter from The New York Times who wanted to know if it was true that I was about to make a deal with janesco to buy the bonwit building janesco still seeking a way out had declined to give way to my or any comment but I decided to take a calculated risk I tried very Hard to keep the deal as secret as possible until I had a signed contract because I didn't want to prompt a bidding war but now the rumors were circulating and I had a seller who was

bulking so I confirmed for weda that I'd reached an agreement with jisco for the property and that because I anticipated building a new tower on the site bonwit would most likely be Clos closed within the next several months my idea was to put public pressure on janesco to live Up to their agreement what I didn't calculate was a secondary benefit no sooner did veda's article appear the next morning than all of bonwit's best employees began heading over to Bergdorf Goodman Sachs Fifth Avenue and Bloomingdales to look for new jobs suddenly bonwit began losing its best

people in droves and it was becoming almost impossible to run the store that I believe was the straw that broke janco's back suddenly they stopped Bulking 5 days after the New York Times article appeared we signed our contract the company's desperation saved my deal on the other hand desperation can be a double-edged sword because janesco needed cash so badly and so quickly they insisted on a very unusual contract in a typical real estate deal you put down a 10% deposit when you sign a contract and the remaining 90% at closing in instead janesco demanded that

I put down 50% at Contract $12.50 million and the other Half at closing my lawyers advised me not to agree to such a demand the way they saw it there was a reasonable risk that the company might go bankrupt before we ever got to closing if that happened a bankruptcy judge who has powers you wouldn't believe might choose to take my deposit and use it to pay off other creditors for me to put so much money at such risk my lawyer said was totally imprudent I looked at it another way I wasn't thrilled about putting

$12.5 million on the line but at the same time I believed that the more cash I gave janesco the more money they'd have to pay off debts and keep their creditors at Bay also my period of risk would be relatively short since it was in our mutual interest to close the deal as quickly as possible uh the time between contract and closing is often six months or more in this case we set it at 60 days in addition I already had a good Deal of time and money invested in the deal as far back as

August following my first meeting with Jack Hanigan I'd begun working on plans for the site and I'd started negotiating with the city for zoning actually within minutes of leaving Jack hanigan's office I had called their scut and asked him to meet me at the bonwit site when he got there I pointed to the building and I asked him what he thought it was obviously a super location he said but what did I Have in mind for it but I want to build the most fantastic building in New York I told D and I want you

to get working right away because I want to know how big a building I can legally build and so from the start size was a top priority uh with such a great location the more Apartments I could build the better the return I could hope to get on my investment moreover the higher could go the better the views and the more I could charge for the apartments um a guy Named Arthur Drexler from the Museum of Modern Art put it very well when he said skyscrapers are machines for making money Drexler meant it as a

criticism I saw it as an an incentive from the start everyone I talked with was skeptical that I could get approval to build a huge glass skyscraper along a stretch of Fifth Avenue filled with short old Limestone and brick buildings I'd heard the same thing about the Hyatt of course and so I didn't take the warnings too Seriously even putting commercial considerations aside I felt a tall building would be much more striking than a short one very quickly Dera got caught up in my enthusiasm when someone complained at a community board hearing that the building

we had in mind was too tall and would block too much light dear answered only half kidding if you want sunlight move to Kansas for any new building the permissible height is determined by Something called floor area ratio F specifically the total square footage of a building can be no more than a certain multiple of the square footage of the building lot it was possible to get some bonuses but on this lot for example the absolute maximum F was 21.6 naturally that's what I intended to go after I knew it was going to be an

uphill battle when deer did his first computations using just the bondwire site without Tiffany's air rights or the Candel parcel he determined that our maximum F was 8.5 which he said translated into a 20 story building with 10,000 square feet of usable space per floor immediately I told him to transform it into a 40 story building with 5,000 square ft per floor Not only would that give me apartments with better views it would also mean fewer Apartments per floor which is another luxury for for which buyers will pay a premium of course I had no

Intention of settling for a low f for starters my f would increase substantially when I acquired the Tiffany air rights in addition developers can get extra F by providing certain amenities that the City Planning Commission deems desirable uh on this site for example I could get a bonus by building residential units instead of just offices on the theory that Office Buildings create far more more Pedestrian traffic and congestion in addition I could get a bonus by building a public area for pedestrians something called a through block arcade on my ground floor I could get a

third bonus by building more than the minimum retail space required by law and I could get a final bonus by building a public park within the shopping area and arcade eager for every Advantage I could get I began talking to about designing an atrium with several levels of shopping As a business a retail Atrium seemed a long shot enclosed shopping malls have been a hit all across the country but they've almost never succeeded in New York City the typical Suburban mall is clean controlled safe and antiseptic which is exactly why most people feel so comfortable

in them New Yorkers on the other hand seem to thrive on gritty street life and are quite happy to do business with Street vendors but the way I figured it even if the atrium wasn't Terribly successful the bonus I'd get for building it several extra floors in my residential Tower would more than make up for its cost it wasn't until much later when I began to see how magnificently it was turning out and when we started to attract the best stores in the world as tenants that I realized the atrium was going to be something

special a hit on its own terms in the early stages I focused more of my attention on the design of the building Itself I wanted to create something me mble and Monumental but I also knew that without a unique design we'd never get approval for a very big building the standard four-sided glass box just wasn't going to fly with City Planning deare went to work he probably did three to four dozen drawings and as we went along I picked the best elements from each one at first we started out with a glass tower built on

a rectangular Limestone base but that just Didn't look good later we tried to design with three exterior glass elevators that appealed to me but it turned out that they'd use up far too much of our salable interior space finally de came up with the concept of a series of terraces Ste back from the street to the height of the adjacent Tiffany building my wife Ivana and I agreed that the setbacks created a certain compatibility and gave our building a less bulky feeling than it Would have with straight sides like most skyscrapers have on the higher

floors we settled on a Sawtooth design a zigzag effect that gave the building 28 different sides as if you took the steps of a staircase and turned them on their side the design was obviously going to be more expensive to execute than something more standard but the advantages seemed obvious with 28 surfaces we'd be creating a striking distinctive building also the uh the Multiple sides would ensure at least two views from every room and in the end that would uh that would make it possible to charge more for the apartment to me we were creating

the best of all possible worlds it was a greatl looking design but it was also very sailable to hit a real H run you need both the next challenge was to have the design approved by the city which meant among other things getting zoning variances we Were able to Prevail simply by using logic the zoning law required that we build a ground floor through block arcade that ran north south meaning from 57 Street to 56th Street that would have meant putting the entrance to the building on 57th Street rather than on Fifth Avenue and the

latter was obviously more prestigious we simply pointed out to City Planning that the IBM building between our site and Madison Avenue Already had a north south through block arcade so that ours would be redundant by running our arcade on a West East axis we could connect from Fifth Avenue through to to IBM's Atrium and therefore all the way out to Madison Avenue remarkably everyone agreed that was the best solution the result was that we got the variant that allowed us to create our spectacular entrance on Fifth Avenue what the city bulked at from the very

start was the size of the Building we were proposing 70 stories high with square footage at the maximum 21.6 far as early as December 1978 even before I'd closed my deal with bonwit City Planning let us know that they considered our proposed building too big they said they intended to oppose letting us use bonuses to increase our far and that they were very concerned about the issue of compatibility with the smaller Surrounding buildings on Fifth Avenue fortunately by the time I closed my deal in early 1979 and we entered into serious discussions with City Planning

I had some ammunition of my own for starters I could have chosen to build something called an as of right building one that doesn't require any variances much the way I'd done earlier with Walter hoving I had dare prepare a model of the as of right building to Show City Planning it was hideous a thin little four-sided box going straight up 80 stories can't delevering over tiffy's we took the position that if the city wouldn't approve the building we wanted we were prepared to build as of right and we showed them the model and the

renderings naturally they were horrified I'm not sure they believed we'd ever build it or even that it was buildable but there was no way they could be sure the next thing I was able to use in My favor unexpectedly was bonwit teller itself at first I assumed I'd just tear down the store and that would be the end of it but very shortly after I'd signed my deal for the site another company Allied stores Corporation made a deal with janesco to purchase the 12 remaining bonwit T branches in locations ranging from Palm Beach Florida to

Beverly Hills California soon after that the president and CEO of Allied a terrific retailing executive named Thomas machio approached me alied itself had been very close to bankruptcy when MAOI took it over in 196 6 but over the next 10 years he transformed it into one of the strongest retailing companies in the country MAOI explained to me that while several of the bonwit stores he just purchased were quite successful he felt it was critical to continue to have the flagship bonwit in Manhattan and ideally he said he'd like to keep the store at 57th Street

and fth Avenue not Only because it had been there for 50 years but also because the location was unbeatable I told Tom right off that there was no way I could give bonwit nearly as much space as it previously had on the other hand I said I could give him good space fronting on 57th Street and connected directly through to the atrium I intended to build on my ground floor I showed him my plans and in a very short time we were able to strike a Deal it was very good for Tom because we signed

a longterm lease at a rent per square foot far below what I later got for other retail space in the building but it was also very good for me I leased 55,000 Square ft to Alli giving them a store less than one quarter the size of the original bonwit for an annual rent of $3 million plus a percentage of their profits I'd paid $25 million to purchase bonwit's lease and building and with a 10% mortgage my Carrying costs were approximately $2.5 million a year in other words I was paying out $2.5 million to own the

site and getting $3 million back from Allied for leasing them a small portion of the total space that meant I had a profit of $500,000 a year and and owned the land for nothing all guaranteed before I even began construction better yet since I was giving the new bonwit only a small portion of my site I could rent the rest to other retailers but perhaps best of All what I got in bonwit was a store the city very much wanted to keep in New York I was able to make a very simple very strong case

to the people at the City Planning Commission if you want bonwit to return to Fifth Avenue I told them you're going to have to give me my zoning even with that my approval was far from a sure thing the local community board opposed such a tall building as a ploy they suggested a six-month moratorium on new buildings to Study whether the area was already overbuilt a committee to ban the building boom sprang up as soon as that happened politicians had a knee-jerk reaction they latched on to the cause looking back I don't think politics or

leverage made a critical difference one way or the other I'm absolutely convinced that it was the architecture itself that won us our approval and perhaps no one had a more powerful influence than adada Luiz huxel than the Chief architecture critic of the New York Times I took a calculated Risk by inviting hble to look at our model and renderings before the City Planning Commission voted on our zoning the power of the New York Times is just awesome it is certainly one of the most influential institutions in the world and I recognized that anything Huxtable wrote

would have enormous impact moreover I knew that she was hostile to skycrapers in general and that she Almost always preferred old and classical to new and glitzy but by the middle of 1979 I was worried about whether I was going to get my zoning I figured that huxel couldn't make the things worse and that if I got lucky she might write something that would help in early June huxel came to see our plans on Sunday July 1st the times arts and Leisure section carried her architecture view column about Trump Tower it was titled A New

York Blockbuster of Superior design that headline probably did more for my zoning than any single thing I ever said or did the funny thing was that huxel spent the first half of her review complaining that our building was too big and suggesting that I had used every trick in the book to maximize its size but interestingly she didn't blame me so much as she did the city for zoning laws that she said encourage developers to do what I'd done and then at the end she gave us several terrific Lines a great deal of care has

been lavished on its design she wrote adding it is undeniably a dramatically handsome structure in October the Planning Commission unanimously approved our zoning the commission said it would have preferred a masonry facad for Trump Tower as more compatible with neighboring buildings but added that they didn't insist in light of the fact that I would be providing extraordinary public amenities In the end we negotiated in Far of 21 barely less than the 21.6 maximum I settled for just two fewer floors than I'd originally sought it that gave me the equivalent of a 68 story building including

the huge double ceilinged six level Atrium which made Trump Tower the tallest Residential Building in the city at the same time the city took huxtable's comments about the zoning laws to Heart responding to the way I'd used bonuses and air rights to create a Much bigger building the city amended its zoning laws to prevent others from doing the same thing in the future once I had my zoning and uh you know the next challenge was getting the Tower built it was uh it wasn't going to be cheap and when you build above a certain height

construction cost rise you know almost geometrically you know simply because it becomes so much more costly to do everything from reinforcing the infrastructure to bringing up Piping on the other hand because I had such a prime location I felt I could afford it if I did the job right I'd be able to charge such a premium that the extra cost would be Irrelevant in October 1980 Chase Manhattan agreed to provide financing for the construction of Trump Tower I made a deal with hrh construction to be my general contractor the budget for the whole job acquisition

of the land construction carrying charges advertising and promotion was Slightly more than $200 million the person I hired to be my personal representative overseeing the construction Barbara R was was the first woman ever put in charge of a skyscraper in New York she was 33 at the time she'd worked for HR and I'd met her on the Commodore job where she'd worked as a mechanical superintendent I'd watched her in construction meetings and what I liked was that she took no Guff from anyone she was half the size of most of These bruising guys but she

wasn't afraid to tell them off when she had to and she knew how to get things done it's funny you know my own mother was a housewife all her life and yet it's turned out that I've hired a lot of women for top jobs and they've been among my best people often in fact they are far more effective than the men around them Louis Sunshine who was an Executive Vice President in my company for 10 years was as Relentless a fighter As you'll ever meet blanch sprag the Executive Vice President who handles all sales and

oversees the interior design of my buildings is one of the best salespeople and managers I've ever met Norma furer my executive assistant is sweet and charming and very classy but she's steel underneath and people who think she can be pushed around find out very quickly that they're mistaken Ivana my wife is a great manager who treats her employees very Well but she's also very demanding and very competitive her employees respect her because they know she's pushing herself as hard as she's pushing them we began demolition of the bonwit building on March 15th 1980 and almost

immediately I found myself in the middle of a major controversy over the two baz relief Art Deco sculptures that were a decorative feature of the exterior of the building all during 1979 long after ID announced my plans and begun Negotiating for zoning no one expressed any interest in those freezes no representative from zoning from landmarks preservation or from any Community Arts group ever suggested saving them finally in mid December of 19 79 shortly before I was to begin construction I got a call from someone at the Metropolitan Museum of Art asking if I'd consider donating

the freezes and certain iron grill work I said that if the freezes could be saved I'd be happy To donate them to the museum what happened was that we began the Demolition and when it came time to take down the freezes my guys came to me and they said Mr Trump these are a lot heavier than we thought and if you want to try to to save them we're going to have to add special scaffolding for safety sake and it's going to take at least several weeks my carrying charges on the construction loan for this

project were enormous not to mention the Extra construction costs of delaying the job I just wasn't prepared to lose hundreds of thousands of dollars to save a few Art Deco sculptures that I believed were worth considerably less and perhaps not very much at all so I ordered my guys to rip them down what I didn't count on was the outrage this would create the following day the New York Times ran a front page picture of the Workman demolishing the sculptures and the next thing I knew I'd become a Symbol of everything evil about modern developers

a times editorial described the demolition as a memorable version of cash flow calculations outweighing public sensibilities and went on to say that obviously big buildings do not make big human beings nor do big deals make art experts it was not the sort of publicity you like to get looking back I regret that I had the sculptures destroyed I'm not convinced they were truly valuable And I still think that a lot of my critics were phonies and hypocrites but I understand now that certain events can take on a symbolic importance frankly I was too young and

perhaps in too much of a hurry to take that into account the point is that despite what some people may think I'm not looking to be a bad guy when it isn't absolutely necessary ironically the whole controversy may have ended up being a Plus for me in terms of selling Trump Tower the stories that appeared about it invariably started with sentences like in order to make way for one of the world's most luxurious buildings even though the publicity was almost entirely negative there was a great deal of it and that Drew a tremendous amount of

attention to Trump Tower almost immediately we saw an upsurge in the sales of Apartments I'm not saying that's a good thing and in Truth it probably says something perverse about the culture we live in but I'm a businessman and I learned a lesson from that experience good publicity is preferable to bad but from a bottomline perspective bad publicity is sometimes better than no publicity at all controversy in short sells so it turned out does glamour even before we started construction I'd begun to realize that the atrium could prove to be one of the most dazzling

parts of Trump Tower at first we just set out to make it an attractive setting for retailers but when I saw the final drawings and the model I realized it could be truly spectacular I also decided I would spend whatever it took to assure that it lived up to its potential perhaps the best example is the marble originally I thought of using the brown Paradisio that had been so successful for the lobby of the Grand Hyatt but in the end I became convinced That what was great for a hotel lobby wasn't necessarily right for a

retail shopping Atrium de Ivana and I looked at hundreds of marble samples finally We Came Upon something called breia piche a rare marble in a color none of us had ever seen before for an Exquisite blend of Rose a peach and pink that literally took our Breath Away of course it was incredibly expensive in part because it was a very irregular marble when we went to the Quarry we discovered that much of The marble contained large white spots and white veins that was jarring to me and took away from the beauty of the stone so

we ended up going to the Quarry with black tape and marking off the slabs that were the best the rest we just scrapped May 60% of the total by the time we were finished we' taken the whole top of the mountain and used up much of the Quarry next I made sure to get the finest Craftsman to cut and lay the marble Because unless your workmen Are the best you get Jagged edges poor matching and asymmetry and then you've lost the whole effect that effect was heightened by the fact that we used so much marble

on the floors and for the walls six full floors up it created a very luxur ious and a very exciting feeling invariably people comment that the atrium and the color of the marble particularly is friendly and flattering but also vibrant and energizing all Things you want people to feel when they shop comfortable but also pumped up to spend money of course the marble was only part of it the whole Atrium space was very dramatic and different rather than making the railings out of aluminum which is cheap and practical we used polished brass which was much

more expensive but also more elegant and which Blended wonderfully with the color of the marble then we used a lot of reflective glass particularly on the Sides of the escalators that was critical because it made a fairly small core space look far larger and more dramatic the sense of spaciousness was further enhanced by the fact that we used only two structural colums in the entire Atrium the result is that no matter where you stand you get had an unimpeded View and a sense of great openness the third element that adds to the drama of the

atrium is one I actually fought against at first making The entrance from Fifth Avenue unusually large zoning regulations required only a 15 foot width and I didn't want to lose any more retail space that fronted on Fifth Avenue than I had to however the city pushed very hard for a 30 foot width and finally reluctantly I went along it cost me some very valuable retail square footage but now I think that what I got instead a spectacular entrance was more than worth it I give the City Planning Commission full credit for that the last key

element in the atrium was the waterfall that runs along the eastern wall it's nearly 80 feet high and it cost almost $2 million to build most of my people at first favored putting paintings on the walls to me that was old-fashioned unoriginal and just not very exciting as it turned out the waterfall proved to be an art form in itself almost a sculpted wall also it attracts far more attention than we'd Have gotten if we'd put up even some very wonderful art if most malls succeed in part because they're so safe and homogeneous I'm convinced

that the Trump Tower Atrium succeeds for just the opposite reasons it's Larger than Life and walking through it is a transporting experience almost as if you're in a Wonderland we tried to create a version of that feeling in the apartments themselves the most dramatic element we had to offer of course was the views Since the residential units didn't start until the 30th level most were higher than the surrounding buildings which meant they had views to the north of Central Park to the south of the Statue of Liberty to the east of the East River and

to the west of the Hudson in addition the Sawtooth design of the building gave all the major rooms in the apartments views in at least two directions and then to make sure we took the best Advantage of those views we built huge Windows virtually from floor to ceiling I would have made the windows all the way from floor to ceiling but I was told that unless there is at least some base below a window some people get vertigo the funny thing is that the inside of the apartments was less important than a lot of the

other elements we quickly discovered that the sort of buyer who spends $1 million for a two-bedroom peder or $5 million for a four-bedroom Duplex is going to hire his own designer gut the apartment and rebuild it to fit his own tastes in the end the reason that we were able to charge unprecedented prices for the apartments was something Beyond any specific luxuries we provided it was the fact that through some blend of design materials location promotion luck and timing Trump Tower took on a mystical aura a lot of buildings can be successful but I'm convinced

that only one at any given time can achieve the blend of qualities necessary to attract the best buyers and command the top prices before Trump Tower the last building to achieve that Mystique had been Olympic tower on 51st Street OFF Fifth Avenue built in the 1970s the key ingredient was the fact that Aristotle Onasis owned it at the time onas was living an amazing life he was married to Jackie Kennedy and was the ultimate jet Setter with Mansions around the world a huge yacht and even his own Island Scorpios he was very rich and very

hot and while Olympic Tower wasn't a particularly exciting or attractive building it was the right product done by the right guy at the right time it it absolutely stole the top of the market from another luxury building that went up around the same time the Galleria on East 57th Street as it turned out Trump Tower also stole the Market from one potentially major competitor long before I made my deal for the bondwood site another developer announced plans to build a huge condominium Tower above the Museum of Modern Art just off Fifth Avenue at 53rd Street

by All rights it should have been a fantastic success the connection with the museum was very prestigious the location was good the architect Cesar pelli was a big name and the developer made it clear that he would spare no Expense to build the best however Trump Tower far outsold Museum Tower first of all although we got started later on construction we began selling apartments in Trump Tower around the same time that museum Tower did from the start I could see we had some advantages obviously we had a better location on Fifth Avenue but in addition

the shape of Museum Tower wasn't inspiring the facade with its multicolored glass wasn't unusually striking and the was just another Lobby Finally Museum Tower was marketed poorly their ads were dull there was no attempt to create excitement and it came off as just an average building by contrast we took our strengths and promoted them to the skies from day one we set out to sell Trump Tower not just as a beautiful building and a great location but as an event we positioned ourselves as the only place for a certain kind of very wealthy person to

live the hottest ticket in town we were selling fantasy The one market we didn't go after was old money New Yorkers who generally want to live in older buildings anyway on the other hand we could appeal to several other categories of wealthy people obviously we were a natural choice for people connected with show business in the sense that we' created something very glamorous foreigners were another big Market Europeans South Americans Arabs and Asians practically speaking we offered them an immediate Advantage at the time we began selling Trump Tower it was virtually the only condominium in

New York to buy an apartment in a condominium all you need is the purchase price to buy a Cooperative which is what most buildings in New York were at the time you need approval from its board of directors who have ridiculous arbitrary Powers including the right to demand all kinds of financial data social references and personal interviews then they can reject You for any reason they choose without explanation it's a license to discriminate the worst part is that many people on these these Co-op boards get their kicks from showing up their power from show it's

absurd and probably illegal but it happened to be great for Trump Tower many wealthy foreigners didn't have the proper social references for these cooperatives or didn't want to put themselves through the scrutiny of a bunch of prying strangers instead they Came to us I still remember the morning just before we began selling Apartments when one of my salespeople rushed into my office Mr Trump she said we're in trouble Museum Tower just announced its prices and they're much lower than ours I thought for a minute and I realized that actually the opposite was true Museum Tower

had just done itself damage the sort of wealthy people we were competing for don't look for bargains and apartments they may want Bargains And everything else but when it comes to a home they want the best not the best by by pricing its Apartments lower than ours Museum Tower had just announced that it was not as good as Trump Tower a lot of people think that we set out to attract celebrities to Trump Tower or that we hired a fancy public relations firm to promote the building the truth is that we never hired anyone to

do public relations and every Star who bought an apartment Johnny Carson Steven Spielberg Paul Anka Liberace and many others came to us nor did I give any of them special deals other developers cut prices to attract stars and celebrities but to me that's a sign of weakness what really means something is when a celebrity is willing to pay full price for an apartment if any press story about a celebrity helped promote Trump Tower I suspect it was one about a sale that never actually occurred shortly after we began selling Apartments I got A call from

a reporter asking whether or not it was true that Prince Charles had purchased an apartment in Trump Tower it so happened that this was the week when Prince Charles and Lady Diana had gotten married and they were at that moment the most celebrated couple in the world our policy was not to comment about sales and that's what I told this reporter in other words I refused to confirm or deny the rumor apparently the reporter then decided to call Buckingham Palace by this time the royal couple had left for their honeymoon and they were out on

the yacht Britannia so the Buckingham spokesman said just what I had they couldn't confirm or deny the rumor that was all the media needed in the absence of a denial the story that the royal couple was considering buying an apartment in Trump Tower became front page news all over the world it certainly didn't hurt us but I had to laugh to myself just a Month earlier Prince Charles had come to New York for a visit and the IRA had come out in force to protest as Prince Charles walked into Lincoln Center for a concert one

evening hundreds of protesters stood outside hissing and screaming and throwing bottles it had to be a frightening experience for him and I can't imagine it left Prince Charles with a great desire to take an apartment in New York City also while Trump Tower is a great building I suspect Prince Charles would find it very hard to get used to any apartment after growing up in Buckingham Palace with so much demand our marketing strategy was to play hard hard to get it was a reverse sales technique if you sit in an office with a contract in

your hand eager to make the first deal that comes along it's quite obvious to people that the apartments aren't in demand we were never in a rush to sign a contract when people came in we'd show them the model Apartments sit Down and talk and if they were interested explain that there was a waiting list for the most desirable Apartments the more unattainable the apartments seemed the more people wanted them as demand grew I kept raising the prices 12 times in all we started out selling for much more than Olympic Tower which until then had

been the most expensive building in New York within a short period we'd almost doubled the price for the best apartments on the Highest floors people were buying two-bedroom apartments for $1.5 million and before we finished construction we'd sold a huge majority of the apartments the cycles of buyers at Trump Tower became something of a barometer of what was going on in the international economy at first the big buyers were the Arabs when oil prices were going through the roof then of course oil prices fell and the Arabs went Home in 1981 we got a sudden

wave of buyers from France I wasn't sure why but then I realized the reason was that franois meton had been elected president and anyone smart and Wealthy realized immediately that mearon was was going to hurt the French economy it wasn't just that he was a socialist and and that he began nationalizing companies it was also that he turned out to be a dangerous man what can you say about a guy who Goes around selling nuclear technology to the highest bidder it's the lowest anyone can stoop and after the European cycle we got the South Americans

and the Mexicans when the dollar was weak and their economies still seemed fairly strong then when inflation set in their currencies were devalued and their governments tried to restrict the outflow of cash and that cycle ended during the past several years we've had two new groups buying One is American specifically Wall Street types Brokers and investment bankers who've made instant fortunes during the bull market frenzy it's ridiculous when you think about it you get stock Brokers barely 25 years old who suddenly earn $600,000 a year because clients they've never met call up and say I'll

take 50,000 shares of General Motors you know the broker pushes a button on a computer and Presto he's got a huge commission as soon as the stock market falls out which It will because it too runs in Cycles most of these guys will be out on the street looking for work the other new buyers are the Japanese I have great respect for what the Japanese have done with their economy but for my money they are often very difficult to do business with for starters they come in to see you in groups of six or eight

or even 12 and so you've got to convince all of them to make any given deal you may succeed with one or two or three but It's far harder to convince all 12 in addition they rarely smile and they are so serious that they don't make doing business fun fortunately they have a lot of money to spend and they seem to like real estate what's unfortunate is that for decades now they have become wealthier in large measure by screwing the United States with a self-serving trade policy that our political leaders have never been able to

fully understand or Counteract because the 263 apartments in Trump Tower proved to be so desirable I decided to keep a dozen or so off the market much the way a hotel operator always holds a few Choice rooms free for emergencies it was a way of keeping options open particularly my own originally I decided to take one of the three penthouse triplexes on the top floors about 12,000 ft in all for my family we moved in at the end of 1983 I had offers as high as $10 million for Each of the two apartments adjoining mine

but I resisted selling them figuring I might ultimately want more space myself it proved true sooner rather than later in the middle of 1985 I got an invitation from Adnan kogi a Saudi Arabian and a billionaire at the time to come to his apartment in Olympic Tower I went and while I didn't particularly go for the apartment I was impressed by the huge size of its room specifically it Had the biggest living room I'd ever seen I had plenty of space in my Triplex but I figured what the hell why shouldn't I have exactly the

apartment I wanted particularly when I built the whole building I decided to take over one of the other apartments on the top three floors and combine it with mine it has taken almost 2 years to renovate but I don't believe there is any apartment anywhere in the world that can touch it and while I can't honestly say I need an 80 foot living room I do get a kick out of having one successful as we were in selling the Trump Tower Apartments to the top buyers we did at least as well in attracting the best

retailers to The Atrium it began when asprey a london-based store that sells the finest crystal jewelry and antiques selected The Atrium for its first Branch store in 200 years of operation at first they took a small store in the atrium business was so good that they have Since expanded to a much larger space quality of course attracts more quality the next thing we knew we had leases with many of the world's top retailers as prey Charles Jordan boati Cartier Martha Harry Winston and many others it didn't hurt of course that in April 1983 just after

the atrium opened we got a good review from Paul goldberger who by then had replaced reped adah Lise huxel as architecture critic of the times the review was headlined Atrium in Trump Tower is a pleasant surprise it began by saying in effect that other critics had been wrong The Atrium goldberger wrote is turning out to be a much more pleasant addition to the cityscape than the architectural odds makers would have had it the review went on to say that the atrium May well be the most Pleasant interior public space to be completed in New York

in some years it is warm luxurious and even exhilarating in every way more welcoming Than the public arcades and atriums that have preceded it in buildings like Olympic Tower the Galleria and City Corp Center that review had two positive effects first it reinforced the feeling among the retailers in the atrium and the people who had purchased apartments in Trump Tower that they'd made the best choice but second and more important it helped bring more Shoppers to The Atrium they of course were ultimately the key to its Success the odd thing is that no one could

ever quite believe that the atrium was a commercial success from the day it opened false rumors circulated one was that while it was obviously a tourist attraction no one really bought anything there another was that the European retailers stayed only because their stores functioned as high visibility loss leaders still other stories had it that the stores on the ground floor did well but those on the upper floors did Not as late as 1986 a New York Times Reporter came to see me obviously prepared to do a hatchet job on the atrium instead he did his

reporting and ended up writing a front page business section story about the atrium's extraordinary success typically a Suburban mall has a turnover of at least a third of its original tenants during the first several years Trump Tower lost only a handful of its stores during the first three years more important no Sooner does a tenant leave than he is replaced by one of the 50 retailers we have on our waiting list stores with the most expensive merchandise in the world have prospered in the atrium not every quality retailer has found the location appropriate of course

the best example is the experience of Lowa away the leather goods retailer which was among the atrium's first tenants lway had beautiful merchandise but it turned out that while A wealthy woman might pay thousands of dollars for a piece of jewelry or an evening gown at a shop next door she was not willing to Shell out $33,000 for a pair of Lowes leather pants no matter how soft and buttery they might feel so Lowes didn't do well but in the end everyone came out okay asprey which was doing very well next door took over Loy

space Loy therefore got out of a long-term lease aspry got an additional 4,600 square feet it very much wanted And I got a great new lease one last element helped make the Trump Tower deal a huge home run and that was something called a 421a tax exemption ironically getting my 421a ended up taking me longer than it had to assemble the site and complete the entire construction of Trump Tower the city enacted the 421a law in 1971 to encourage residential development in return for improving a site developers were entitled to an Exemption from real estate

taxes over a 10-year period every two years the exemption decreased by 20% everyone who applied for the 421a exemption got it almost as a matter of course then I came along with Trump Tower there was no question that I was entitled I was proposing to take a 10-story building in a state of disrepair and to build in its place a multi-use 68 story $200 million Tower unlike the tax abatement I'd gotten on The Grand Hyatt where I was forgiven all taxes the 421a program wouldn't exempt me from taxes currently being paid on the site but

it would exempt me from additional taxes attributable to an increased assessed value on the site who could argue that I wouldn't be improving and better utilizing the site with Trump Tower Ed Coke could for one and the reason had nothing to do with the merits of my case it was all politics kooch and his deputies sensed an opportunity they Couldn't resist to position themselves as consumer Advocates taking on a greedy developer from a public relations perspective I was vulnerable it was quite obvious that Fifth Avenue wasn't exactly a marginal neighborhood and that I'd probably succeed

with Trump Tower even if I didn't get a tax exemption but in my mind none of that had any bearing on my legal right to a 421a exemption in December 1980 I applied for A 421a for the first time a month later I met with Tony gedman commissioner of the city's Department of housing preservation and development to make my case in person in March gedman and the HPD turned my application down I called kooch and told him I thought the ruling was unfair that I wasn't about to give up and that the city was going

to waste a huge amount of money litigating a case I'd eventually win in April 1981 I filed something called an article 78 Proceeding in state supreme court seeking to have the city's ruling overturned the court found in my favor but an appell at court reversed the ruling so I took my case to the state's highest court the court of appeal in December 1982 nearly two years after my original application the court of appeals ruled 70 that the city had improperly refused me an exemption but instead of Simply ordering the city to expedite my exemption the

court told the City to reconsider my request they did and turned me down again by now I was so outraged that the cost of the litigation was beside the point we refiled an article 78 and exactly the same scenario unfolded we won in Supreme Court got overturned at the appell at level and ended up again before the court of appeals my lawyer Roy con did a brilliant job arguing before seven justices without so much as a note this time the court again ruled Unanimously that we were entitled to our exemption and ordered the city to

provide it without further delay uh that was just the icing on the cake by this time Trump Tower was an unqualified success it had given me visibility and credibility and Prestige it was also a great success financially the way I figure it the entire project including land construction costs architecture fees advertising and promotion and finance charges cost approximately $190 Million the sales of Apartments have so far generated $240 million meaning that even before for including revenues from the stores and offices we have earned a profit of approximately $50 million on Trump Tower I also earned

more than $10 million in commissions as a sales agent for apartments in Trump Tower finally the rent from Office Space and the retail Atrium generates many millions more a year almost all of it profit ultimately Trump Tower became much more Than just another good deal I work in it I live in it and I have a very special feeling about it and it's because I have such a personal attachment that I ended up buying out my partner Equitable in 1986 what happened is that Equitable put a new guy in charge of its New York real

estate operation one day this fellow called me up and said H know Mr Trump I've just been looking over the books and I'd like you to explain why we're spending so Much on the maintenance of Trump Tower we were in fact spending nearly one million doll a year which is almost unheard of but the explanation was very simple when you set the highest possible standards they're expensive to maintain as one simple example my policy was to have all of the brass in the atrium polished twice a month why this fellow asked couldn't we save some

money by polishing once every couple of months at first I was civil I tried to explain That one of the key reasons for the success of the arrium is that it was so impeccably well run run I also said I had no intention of changing our policy and I suggested to this executive that perhaps he ought to take a day to think about whether he really wanted to push it he called me back 24 hours later and he said he'd thought about it and he did want to go ahead with cutbacks that was probably the

end of my partnership with Equitable Much as I liked Equitable I wasn't about to tamper with something so successful just to save a few bucks to do that would have been totally self destructive I was upset but I was also philosophical I went to my friend George peacock the head of real estated Equitable and I explained that we had a problem and that there didn't seem to be a way out of it therefore I wanted to buy out Equitable share in a short time we made a deal and I now own Trump tour Outright after

we'd signed at the contracts I got a letter from George peacock who ended by saying as with most things in life time calls for Change and it is best to accept that fact nevertheless I shall always be proud of my involvement in the creation of Trump Tower and fondly remember how we work to bring it about I was very happy to get that letter it was a classy way to conclude a partnership that had been a class act From the start chapter 8 gaming the building on the boardwalk the first time the economics of the

casino gaming business really came home to me was one day late in 1975 I was driving along in my car to yet another meeting about the Commodore Hotel deal when a news report came on the radio Hotel employees in Las Vegas Nevada the announcer reported had just voted to strike among other consequences The stock price of Hilton Hotels which owned two casinos in Las Vegas had dropped tremendously by this time I knew something about the hotel business but I was still stunned how was it possible that the stock of a company that owned at least

a hundred hotels worldwide could be hurt so badly by a strike against just two of them when I got back to my office it took only a small amount of research to find out the answer Hilton it turned out owned more than 50 hotels worldwide but its two casino hotels in Las Vegas accounted for nearly 40% of the company's net profits by comparison a hotel such as the New York Hilton one of the biggest in Manhattan and one I'd always assumed was a huge success accounted for less than 1% of overall Hilton profits it was

a sobering thought for nearly two years I'd been working day and night to try to Build my own huge Hotel on 42nd Street I wasn't getting my approvals I wasn't getting my financing and it seemed highly likely that the whole deal was going to fall through now for the first time it occurred to me that even if I finally got the hotel built and it became a major success in the greatest city in the world it still wouldn't be nearly as profitable as a moderately successful Casino Hotel in a small desert town in the Southwest

by this Point I had invested a great deal of time in the Commodore deal and I tend not to give up on something I've started but what I did shortly after I heard that radio report was take a trip down to Atlantic City a year earlier a referendum to legalize gambling throughout the state of New Jersey had been badly defeated now a new initiative was on the 1976 ballot to legalized gambling solely in Atlantic City it certainly seemed worth checking out I've Never had any great moral problems with gambling because most of the objections seem

hypocritical to me the New York Stock Exchange happens to be the biggest casino in the world the only thing that makes it different from the average casino is that the players dress in blue pinstripe suits and carry leather briefcases if you allow people to gamble in the stock market where more money is made and lost Than in all the casin casos of the world put together I see nothing terribly different about permitting people to bet on blackjack or craps or roulette to me the key questions about legalizing gambling in Atlantic City were economic was the

timing right was the price of Entry reasonable and did the area make sense as a location Atlantic City is 120 miles from New York City on the South Shore of New Jersey and once upon a time it was a great Resort and convention center but when the convention business shifted to bigger cities and warmer climates Atlantic City fell on hard times I wasn't prepared for how badly things had deteriorated it seemed almost like a ghost town with burned out buildings boarded up stores and the feeling of Despair you sense immediately in places where a lot

of people are out of work ironically the prospect of legalized gambling had already sent Atlantic City Land values soaring particularly along the boardwalk by the ocean speculators everyone from large public companies to Fly by Night conmen had moved in like vultures families living in tiny homes that they couldn't have sold a year earlier for $5,000 suddenly found themselves being offered $300,000 500,000 and even $1 million that it was a little ridiculous and I decided not to be one of the speculators I didn't like the idea of putting up a Lot of pure risk money say

for for example I paid $500,000 buy a piece of property before the referendum if it failed my $500,000 investment would drop in value to almost nothing the next day if the referendum passed that same piece of land might cost me $ million but I thought it was a better bet to pay more for a sure thing the economics of a successful Casino operation are so strong that paying a little more for a good site would eventually prove to be a Small EXP ense sure enough the referendum passed in November 1976 and was signed into law

by the middle of 1977 by then however the Grand Hyatt project was finally moving forward and the price of land in Atlantic City had become more astronomical than I had anticipated just as I'd done five years earlier in Manhattan when prices seemed too high I decided to stay on the sidelines a little longer I knew that if I was paon and kept my eyes open a better opportunity would eventually arise nearly 3 years passed but finally in the winter of 1980 I got a call from an architect I had looking out for me in Atlantic

City he told me that a certain Prime piece of boardwalk property I'd always been interested in might be available the timing couldn't have been better for one thing the the first wave of euphoria about the casino business had passed and times were tougher a few Casinos Resorts gold nugget Caesars were doing terrific business but the more recent Ventures had run into all kinds of problems Bal the newest casino in town had come in at least $200 million over budget the Tropicana facility owned by Rada in was experiencing severe construction delays and enormous overruns Bob Guion

of Penthouse had announced plans to build a boardwalk Casino only to find after acquiring a site that he couldn't get financing Hugh Have 's plans for a Playboy hotel casino fell apart after he was turned down for a license by the casino Control Commission a half dozen lesser known players had come riding into town with great plans only to be derailed by trouble with financing and Licensing or intimidated by the huge cost of building a hotel casino Atlantic City's reputation had also been hurt by corruption charges growing out of the FBI's Abscam sting Operation in

19 1980 the vice chairman of the casino Control Commission Kenneth McDonald resigned after admitting that he'd been in the room when a $100,000 bribe was passed to a local politician by potential investors looking for help in getting a casino license to make matters still worse the winter of 1980 had been particularly harsh freezing cold and so windy that in January and February you could barely stand up on the Boardwalk suddenly a city that had been very hot for several years turned very cold literally and figuratively no one was talking about building any more new casinos

it seemed possible that the gaming business in Atlantic City was going to prove to be seasonal at best enough to sustain only a few casinos in my view however that translated into an opportunity the worst of times often create the best opportunities to make good Deals the 2 and 1/2 acre piece of property that I got the call about was at the center of the boardwalk just off the main road leading into town from the Atlantic City Expressway in addition the site was directly alongside the convention center the largest space available for conventions and major

entertainment and a potential funnel into any casino built next door I was convinced that there was no better Casino site in town perhaps Not coincidentally it had already proved to be one of the most difficult to assemble by 1980 everyone and his uncle had tried and the result was a legal mess fragmented ownership overlapping agreements disputes over options Lions on individual parcels and Waring factions the status of the site seemed almost impossible to comprehend much less to untangle every lawyer and real estate broker I spoke with told me flat out that if I really wanted

to build a Casino in Atlantic City I'd be far better off purchasing a site that was already assembled I listened to the advice but I wasn't convinced first of all I always believe in going after the best location if you can get it at a reasonable price secondly I have an almost perverse attraction to complicated deals partly because they tend to be more interesting but also because it is more likely you can get a good price on a difficult deal had I Tried to assemble the same site back in 1976 the story probably would have

been very different at that point I had yet to build anything in New York and no one really knew who I was but by 1980 with the Hiatt under construction and the Trump Tower project announced I had a much higher profile and a lot more credibility when you're negotiating with people who've been promised the world a half dozen times and gotten nothing Credibility is critical the site consisted of three large parcels each one owned by a different Investment Group as well as a half dozen small homes owned by individual immigrant families the key to putting

the deal together was making every parcel in the deal contingent on my getting all of the others the only chance of building the great facility I envisioned was to put together the whole site the last thing I wanted to do was invest a lot of money And then find myself squeezed at at the End by one holdout owner who understood the value of controlling the final piece in a puzzle that's what happened to Bob Guion on the site next door to this day underneath the rusting frame of An Unfinished building there remains a single family

home that Guion never managed to purchase even if he'd gotten financing he would have had a problem imagine Spending $300 million or $400 million on a gleaming glamorous new facility but building it around a rotting five room Shack instead I set out to leverage my credibility I told the owners of the sites that I was prepared to make a fair deal and that unlike all the others before me I was going to follow through I pointed out that I had a strong track record when it came to developing property I also suggested that I might

be the only person around who still had The inclination to put this deal together at all if they couldn't come to an agreement with me I said they might be sitting on their property for many years to come the major part of the deal was for the three large Parcels on the site the groups that owned them were known as SSG Magnum and network 3 and I negotiated with the principles of each group myself uh rather than trying to purchase the pieces outright I sought very long leases with options to Purchase at a later date

my strategy was to keep my upfront investment down and also to avoid seeking major financing at a time when Banks were wary about Atlantic City in the case of leases I could carry the costs myself my pitch was very simple I was prepared to buy them out quickly and cleanly they in turn had to cooperate with me and with each other so that all closings could be simultaneous they also had to drop the lawsuits they were waging against each Other over prior attempts to jointly sell or lease the land I did not want to get

involved down the road in a legal grass the properties I bought outright were the individual homes I hired local people to negotiate on my behalf because many of those we were negotiating with were immigrants who spoke very limited English and weren't used to dealing with Outsiders other developers had paid up to $1 million for tiny plots in strategic Locations because times had turned bad I was able to purchase nearly all of the houses at much more modest prices by July 1980 we had all the pieces in place I remember closing day very well we had

arranged simultaneous closings beginning on a Friday afternoon in the offices of one of our attorneys in Atlantic City the closings went on around the clock it took 28 hours before everything was signed and sealed at that point we had a room full of people Almost Delirious from exhaustion but I control the best site in Atlantic City before I could move forward I still had to get financing architectural approvals and Licensing as a casino operator more important I had to decide whether the timing was right to undertake this huge project fortunately I didn't feel pressed to

make any quick decisions it was true that I had several million dollars invested including lawyers fees preliminary architectural drawings staff Costs and purchase and Lease of land but I was very confident that if I wanted to turn around and sell my assembled site to someone else I get a great deal more for it than I put in there are always buyers for the best in the meantime my first priority was to get licensed by the casino Control Commission I'd followed Atlantic City closely enough to know that the licensing process could be very long very difficult

and very unpredictable Playboy and Hugh Hefner For example were turned down for a license because the company had allegedly paid a bribe 20 years earlier in order to get a liquor license for the Playboy club in Manhattan when Hefner testified in New Jersey he took the position that he had actually been shaken down for a payment and that neither he nor Playboy had ever been charged with a crime even so his license was denied the state official who cross-examined heftier said afterward That several Commissioners hadn't liked Hefner's demeanor and style on the witness stand I

don't believe he helped his cause when he walked into the hearing in Trenton New Jersey with blazing pipe silk suit and shirt and a blonde bombshell at his side the licensing process is very subjective if his Savvy daughter Christie had been involved at the time perhaps the outcome would have been different much more serious allegations of connections with Organized crime had been raised against several other applicants Keers and belly were among them but nonetheless they both eventually got licensed what became clear to me as I watched the licensing process was a pattern of something I

call bloodletting in exchange for a license applicants were regularly being forced to offer up at least one sacrificial lamb at Caesar's world it was the Pearlman brothers who had to resign from the company and at Bal it Was William O'Donnell but unlike a large public company I couldn't afford to sacrifice anyone I had to demonstrate an absolutely unblemished back ground the first thing I did was hire a lawyer to represent me Nick ribus was originally recommended by the new house family for whom he'd done a lot of work I have great respect for the new

houses and when I met Nick I liked his style he was probably 30 at the time but he looked years younger the first thing I said to Nick was look I'm just not sure a lawyer as young as you are can handle a big project like this Nick wasn't thrown to tell you the truth truth Mr Trump he said I've never had a client as young as you who could afford my bill Nick and I agreed immediately on a strategy I'd hold back on any construction until we got a decision on Licensing in every previous

situation companies who purchased or assembled sites in Atlantic City had begun the licensing process and Construction concurrently licensing could take as long as construction and the sooner the casino got built the faster it could start earning money it's perfectly logical so long as your licensing comes through in the end but unlike these other companies I didn't want to put several hundred million dollars at risk in the meantime also I didn't want to be in a weak negotiating position with the Casino Control Commission once you've begun investing huge sums of money it's very hard to say

no to anything they ask for waiting to get a decision on licensing meant paying carrying costs on my land a little longer and postponing profits but it seemed more than worth it to this day not many people or companies are willing to go through the nightmare of Licensing in New Jersey which gives Nevada a big advantage in Attracting new investors my strongest Cod was the fact that construction of new casinos in Atlantic City had come to a complete standstill state and city officials I knew were hungry for new evidence that Atlantic City was still a

good investment because my credibility as a major Builder had been established I was confident that state and local officials would be receptive to my constructing a Major Casino Hotel in Atlantic City I didn't want to be in the position of pleading with anyone at the very least I wanted to deal as one among equals all with an interest in making the project work by this time i' brought my brother Robert aboard to work with me on the project unlike me Robert decided after graduating from college to work on Wall Street perhaps as a way of

getting out from under the family Shadow he started in corporate finance at ker Peabody Three years later he moved to East D realy and for the next five years did corporate real estate Finance work finally he moved to shearon lob roads where he set up a real estate Finance group and ran it very successfully until he joined me I think both of us always assumed that eventually he'd come back to the family business Atlantic City was the perfect opportunity I was looking at a potential investment of $200 million in a town 120 Miles from New

York City where I couldn't possibly be Hands-On every day what I needed was someone totally competent totally honest and totally loyal to oversee the project there is nothing to compare with family if they happen to be competent because you can trust family in a way you can never trust anyone else I called Robert one evening in May 1980 we talked for several hours in my apartment and by the next day he'd agreed to take over Day-to-day responsibility for Atlantic City among other things that meant we'd both go for licensing on a February morning in 1981

Robert Nick rbus and I drove to New Jersey for a meeting with the Attorney General of New Jersey and the head of gaming enforcement I was very respectful but I was also very blunt I said that I was prepared to make a major investment in New Jersey my own money not corporate money and that I'd already invested Several million dollars on my Boardwalk site what concerned me I said was that New Jersey had acquired a reputation for making it very difficult for any developer to do business in the gaming area licensing investigations had dragged on

for 18 months and more much as I wanted to build a great Casino on the great site I had assembled I said I had a very successful real estate business in New York and I was more than willing to walk away from Atlantic City If the regulatory process proved to be too difficult or too time consuming the bottom line I concluded was that I didn't intend to invest any more money while or to begin any construction until I got a decision one way or the other on my licensing where the Attorney General said to me

no Mr Trump you're not right about New Jersey the licensing process can work here efficiently I can't give you any promises about the outcome of your investigation we may find out that You're not licensable what I can promise is that if you cooperate fully we'll give you an answer one way or the other in six months then he turned to his director of gaming enforcement and said isn't that true the director tried to walk a tight RPP well we'll do our best he said but it may take a year at that point I jump back

in well if it takes a year I said then I'm out of here I'm prepared to cooperate fully but I'm not going to sit around twiddling my thumbs Waiting for answers the Attorney General nodded and his director agreed it was clear that six months was our timetable and they would try very hard to meet it the next thing we did was to sit down with the members of the casino Control Commission staff in order to build a casino you need approval on everything from room size to Casino layout from the number of restaurants to the

size of the health club Our Intention was to provide The Regulators with detailed building plans and Architectural drawings well in advance of our construction so that before we got started building they'd have a chance to review our plans and tell us what changes they wanted other operators experienced in running casinos but not in building them hadn't bothered with this sort of planning in a Russ to get their facilities up and open many began construction before they got final Approvals only to have The Regulators show up and say no this room is too small or no

this slot machine needs to be there instead of here from long experience I know that mid construction changes are extremely costly and perhaps the key reason so many major projects suffer huge cost overruns with so many regulators and regulations to satisfy we had one major advantage the fact that we are not a bureaucracy in most large public corporations getting an answer to A question requires going through seven layers of Executives most of whom are Superfluous in the first place in our organization anyone with a question could bring it directly to me and get an answer

immediately that's precisely why I've been able to act so much faster than my competitors on so many deals sure enough the gaming division concluded its in investigation and issued its report on October 16th 1981 nearly 6 months from the day they began They had lived up to their word better yet both Robert and I got an absolutely clean bill the division of gaming enforcement recommended licensing both of us my actual licensing hearings weren't scheduled for several months after the enforcement division report was complete in the meantime we managed to get all the necessary approvals for

our construction among them was permission from the city to build a Skyway Connection between our facility and the convention center next door one consequence was that we could build part of our facility over the road and thus end up with one of the biggest hotels in town on one of the smaller sites unlike the owners of many of the boardwalk hotels we oriented our rooms and restaurants to the ocean with such beautiful views available why not take maximum advantage of them the second issue we worked on was financing which Was hardly a given most banks

had an Unwritten policy against making loans in the gaming business because gaming had an unsavory reputation uh my problem ironically was almost the opposite our reputation among Banks was very good but when it came to the gaming business we had no track record at all my solution was to try using that to our advantage better to lend to a reputable company with a clean slate I'd say than to an experienced gaming operator with Questionable reputation also I said because we were proven developers and Builders we were in a far better position than most Casino companies

were to assure any lender that we'd come in on time and on budget manufacturers Hanover which had helped finance the Grand Hyatt was among the banks that had a vague policy against making loans in the gaming business nonetheless they agreed to provide me with funding because of our successful relationship In building the Hyatt I wasn't thrilled about the terms they were offering us but it was hard for me to complain I was lucky to get financing at all on March 15th 1982 with provisional financing in place and all my architectural and building plans approved I

went to Trenton New Jersey for licensing hearings before the casino Control Commission hearings for other companies had sometimes dragged on for 6 to 8 Weeks shortly after 10:15 a.m. I took the stand I testified for 17 minutes just before noon the Commissioners voted unanimously to license both Robert and me as well as our corporate entity the Trump Plaza Corporation I was finally on my way then something totally serendipitous happened one morning in June I got a call at my office from a man named Michael Rose I was impressed I'd never met the man but I

knew that he was the chairman of holiday ins I picked Up the phone and Rose introduced himself he was very pleasant and he said he'd like to come up from Memphis to see me I didn't even ask the reason a guy in Rose's position doesn't suggest a meeting unless he's got something worth talking about also I was fairly sure I knew his agenda I assumed he was interested in buying a property I'd purchased a couple of years earlier The barbazon Plaza Hotel on Central Park South and Avenue Of the Americas I knew holiday in had

been looking for a prestigious location in New York City and I'd let the word out in the real estate community that I might consider selling the barbazon for the right price a week later Mike Rose came to see me Robert and Harvey Freeman joined us Rose was an impressive looking guy tall well-dressed and very much the gentleman I launched right into a pitch about what a great piece of property the Bazon was an incredible location a piece of the rock nothing like it how smart he was to come and see me about it while I

really didn't want to sell it I said perhaps I could be convinced in this case for 10 minutes I just ranted and raved while Mike Rose the chairman of holiday ins sat and listened very politely without saying anything finally looking a little embarrassed he said to me I don't think you understand Donald I'm not interested in the Barbizon Plaza I'm interested in being your partner in Atlantic City that's what I'm here to talk about I like to pride myself on rolling with the punches I had never thought of a partner in Atlantic City but I

jumped right back in and started talking with the same enthusiasm about our plans there I said that we had the best site on the boardwalk that we design the best facility that we had our approvals and financing in place and that we planned To be open for business in less than two years two things intrigued me immediately about holiday ends first the company had a lot of gaming experience experience second they had the ability to finance the deal themselves which could take me off the hook personally what wasn't clear to me was why Rose might

be interested in a partnership holiday already owned one successful Casino in Atlantic City Harris at the marina I knew they were Interested in a boardwalk casino but they had already bought a very costly Boardwalk site and I just assume that's where they'd build nonetheless I decided to play a little koi after all he'd come to see me listen Mike I said I have my financing I have my license and I have my approvals frankly I don't need a partner but what is it exactly that you have in mind Rose explained that he was interested in

my site by virtue of its location but more Important because of my reputation as a builder who came in on time and on budget like most other Casino operators holiday had experienced endless problems in construction and had run over budget by tens of millions of dollars on Harris's Marina Rose particularly liked the idea he said that we were already under construction the point Rose concluded was that holiday simply couldn't justify major overruns to stockholders a second Time making a deal with us he said seemed like a good way to marry their management expertise with our

ability as builders Rose had a specific deal in mind we'd build the hotel they'd manage it and we'd split the profits 5050 in addition he said they'd put up $50 million of their own money toward construction and reimburse me immediately for approximately $22 million of my expenses up to that point we also agreed they'd take over Responsibility for financing and use the holiday inss guarantee to get us a very prime rate as a final inducement to make the deal Rose said that holiday would guarantee me against any operating losses for a period of five years

from the date the casino opened and pay me a large construction fee this was almost too good to believe several times I looked over at Robert and Harvey just to see if perhaps I was missing something They just smiled by the time Mike Rose left my office we had shaken hands on the basic elements of a partnership in at Atlantic City it was still subject to the drawing of documents and to approval from his board of directors I assumed that they'd exact some concessions along the way but as long as the basic concept remained intact

no downside for me and a 50% share of The Upside it was an extraordinary deal better yet I still Believed I was about to enter into a partnership with a quality company run run by highly competent Casino and Hotel operators after all I thought what the hell did I know about running a huge casino hotel anyway once we'd finished our negotiations the final step was approval of the deal by holiday's board of directors in many situations board approval of management initiatives is merely a formality in this case I Worried that Rose might use his board

to help him get out of the deal or at least Force changes in it Rose scheduled his annual board of directors meeting in Atlantic City so that the board would have an opportunity to see the proposed site and also to assess our progress in construction it was the latter that worried me since we had yet to do much work on the site one week before the board meeting I got an idea I called in my construction Supervisor and told him that I wanted him to round up every bulldozer and dump truck he could possibly find

and put them to work on my side immediately over the next week I said I wanted him to transform my two acres of nearly vacant property into the most active construction site in the history of the world what the bulldozers and dump trucks did wasn't important I said so long as they did a lot of it if they got some actual work accomplished all the Better but if necessary he should have the bulldozers dig up dirt dirt from one side of the site and dump it on the other they should keep doing that I said

until I gave him other instructions the supervisor looked a little bewildered Mr Trump he said I have to tell you that I've been in business for a lot of years and this is the strangest request I've ever gotten but I'll do my best one week later I accompanied top holiday inss Executives and the entire Board of directors out to the boardwalk it looked as if we were in the midst of building the grand cooli dam there were so many pieces of Machinery on this site that they could barely maneuver around each other these distinguished corporate

leaders looked on some of them visibly AED I'll never forget one of them turning to me shaking his head and saying you know it's great when you're a private guy and you can just pull out all the Stops a few minutes later another board member walked over to me his question was very simple how come he said that guy over there is filling up that hole which he just dug this was difficult for me to answer but fortunately this board member was more Curious than he was skeptical the board walked away from the site absolutely

convinced that it was the perfect choice three weeks later on June 30th 1982 we signed a partnership agreement our budget was $220 million $50 million from holiday directly $170 million on a loan they guaranteed and that included everything carrying costs construction operating expenses and required cash reserves we projected completion in May 1984 but I was confident we could finish ahead of schedule and even under budget based on how carefully we' done our planning one way uh we stood to to save money was from something known as value engineering say for example that your Architect shows

you a a certain door he wants to use which has four hinges on it before you approve the door you have your engineer look at it and perhaps he says look you only need two hinges to hang that door or three if you want to do a really good job so you eliminate one $10 hinge and you multiply that times 2,000 doors and the saving on that one tiny item comes to $20,000 another good example was the installation of the cooling towers for Our air conditioning system originally our archit placed them on the roof of

the hotel Tower through value engineering we determined that we'd save a lot of money by installing them on a lower section of roof just seven floors up because that roof could be poured much sooner in turn we'd be able to start all the piping and electrical work for the air conditioning six months earlier the second way we saved money Was by producing very complete plans so that contractors could bid on every aspect of the job when you have incomplete drawings a smart contractor will often come in and underbid the job just to get it knowing

he'll be able to more than cover his costs through the change orders that inevitably occur as plans become more complete the final thing that helped us keep costs down was the state of the construction industry in Atlantic City In the spring of 1982 the only Casino still under constru construction by then was the Tropicana and thousands of local construction workers were either out of work or about to be that gave us a lot of Leverage with contractors who had to either cover a certain overhead or go out of business I wasn't looking to force these

guys to make such bad deals that they'd lose money on the other hand I was in a position to negotiate very reasonable Prices I got the building finished right on schedule for a May 14th opening that meant we'd be able to take advantage of the Memorial Day Weekend traditionally the three biggest days of the year for the casino business in Atlantic City I also came in slightly under the original budget at $218 million it represented the first Casino Hotel in Atlantic City ever built on time and on budget on May 14th the casino opened to

a public response that exceeded my wildest Expectations it was a major media event attended by thousands of people including including most of New Jersey's principal officials the governor Thomas Kean was the main speaker and he was extremely generous in praising what we had accomplished his praise was echoed by Richard golin then president of harz who told the crowd that for us to have completed such a huge facility on time and on budget was a near miracle in this day and age the moment we opened the Doors thousands of people poured in everyone was hungry to

check out the newest game in town in a matter of minutes they were lined up three and four deep at the tables and the slot machines it is public knowledge of course that holiday in and I had many many disagreements over the management of the facility but under the agreement I finally made to buy out holiday share I am precluded from saying anything in detail about those conflicts while my Attorneys unanimously believe that I would win any legal battle over my first amendment rights on this issue that's just not the way I do business as

far as I'm concerned a deal is a deal and I live up to what I've agreed to even if I don't believe I'm technically obligated by any specific contractual provision suffice it to say that my ultimate buyout of Holiday Inns share of our Casino Hotel in February 1986 was one of my most savored Transactions one reason reason that I particularly liked owning the facility myself rather than with any partner has to do with the value of depreciation depreciation is the percentage of the total value of a building that an owner is permitted to deduct each

year from his taxable earnings the rationale is that money spent to maintain a building to offset its normal wear and tear shouldn't be taxable put simply depreciation permits You to pay lower taxes on your earn earnings for example if the cost of our facility in Atlantic City was $400 million and we were permitted to depreciate at the rate of 4% a year that would mean we could deduct 16 million from our taxable profits each year in other words if we earned a pre-ct profit of 16 million our earnings after depreciation would actually be reported as

zero be most shareholders and Wall Street Types only look at the bottom line which shows a profit reduced by depreciation as a result corporate managers don't like depreciation much it only makes them appear less successful but I don't have to please Wall Street and so I I appreciate depreciation for me the relevant issue isn't what I report on the bottom line it's what I get to keep the best part of the deal however was the facility I now owned outright merely by running it myself I Felt certain I could earn a far bigger profit in

addition I plan to build new suites and restaurants financing of course now became my responsibility the prime rate had been around 14% when I first started looking at property in Atlantic City by mid 1986 it had dropped to 9% my problem with bank financing even at these lower rates was that I'd still be required to put myself personally on the line for the money uh I didn't find that appealing as a result I decided to seek public financing for the project through a bond issue the downside was that I'd have to pay a higher interest

rate to attract buyers but the upside was that once the issue sold out I wouldn't be personally liable in the end Bear Sterns was able to sell an offering for $250 million which not only covered the $50 million cash due to holiday but also permitted me to pay off the $170 million mortgage on the Building left me the money to build a suitable parking facility interest payments on the financing came to just above $30 million a year that was about $7 million a year more than I'd have paid for Bank financing but to me it

was money well spent by relieving me of personal financial liability it assured I'd sleep better at night during this same period I hired a new general manager for the facility which I had renamed Trump Plaza Hotel and Casino I Looked first at my best competitors at the time Steph Hyde was Executive Vice President and Chief Operating Officer under Steve wi at the Golden Nugget before that he'd worked at the Sands and at Caesers both top casinos when I asked people in town to name the best casino Executives Hyde was always at the top of the

list as soon as we met I understood why he had a lot of gaming experience he was a very sharp guy and highly competitive but most of all he had a Sense of how to manage to the bottom line a lot of managers focus on maximizing Revenue since that's what gets reported publicly most often the smarter guys understand that while big revenues are great the real issue is the spread between the revenues and costs because that's your profit no sooner had I hired Steve than we turned around and hired away a dozen of the best

people who'd worked for him over the years including Paul pate the number one food And beverage man in Atlantic City I have a very simple rule when it comes to management hire the best people from your competitors pay them more than they were earning and give them bonuses and incentives based on their performance that's how you build a first class operation in 1985 the First full year of operation under Harris management the facility earned a gross operating profit of approximately $35 million before Interest taxes and depreciation for 1986 Harris projected a gross operating profit of

$ 38 million based on the first five months during which they continued to manage the facility they were running just slightly under projections we took over on May 16th for the full year our gross operating profit was nearly $58 million or 20 million dollars more than Harris had projected this was despite the fact that in June we closed down our existing Parking lot to begin construction on the new garage we're estimating that by 1988 our gross operating profit will reach $90 million by All rights that should be the end of the story however success running

the boardwalk facility with my own management made me see a broader opportunity specifically I started to look around at other possible deals to buy companies that owned casinos holiday ins was an obvious Target even after selling me the boardwalk facility They still owned three other casinos one in Atlantic City and two in Nevada as well as nearly a thousand hotels around the world as a result in mid August two months after buying them out in Atlantic City I began purchasing stock in Holiday by September 9th I'd purchased nearly 5% of the company or some one

million shares at that point I had two basic options one was to hold the stock as an investment and the other was to go for control I had no doubt the company was Undervalued for one thing because they owned so much real estate they were entitled to large write-off for depreciation therefore they reported net profits far below what they were actually able to retain on the basis of a stock price of $54 a share in early August 1986 I was in a position to purchase effective control of the company for not much more than $1

billion in one scenario for example I would sell Off all of the non-casino hotels perhaps for as much as $700 million and retain just the three casino hotels which by themselves were worth nearly that much no sooner did word get out that I'd begun accumulating holiday in stock then its price started to rise I assume arbitrageur were buying up the stock figuring that either I'd make a move for control or someone else would by early October the price of the stock had reached 7 On Wednesday November 11th I heard from Alan Greenberg of Bear Sterns

that holiday was restructuring the company to fend off any potential hostile bid and was going to borrow $2.8 billion in order to pay an immediate do 65 a share dividend to the shareholders the stock jumped to 76 without hesitation I told Allan to sell and he agreed I still believe I could have overcome any barriers holiday tried to put in my way but I just wasn't N particularly eager to spend my life in the court with these guys the alternative earning a huge profit on my investment without any battle seemed far more appealing by the

end of the week I'd sold my entire stake in Holiday inss meaning that in just eight weeks I earned a profit of many millions of dollars looked at another way I earned back from my holiday in stock much of the money I'd paid them just three months earlier to buy their share of my Casino in Atlantic City obviously I can't complain perhaps no one was better rewarded by holiday than I was but in a way I got something even more valuable than money from the experience a firsthand view of corporate management in America chapter nine

windfall the battle for Hilton in my wildest fantasy it never occurred to me that I would someday purchase the huge Casino Hotel that the Hilton Hotels corporation began Building in Atlantic City in 1984 to the the contrary I watched with some dismay the progress of construction I hardly relished another tough competitor in town especially when the BoardWalk hotel I owned with Hara wasn't performing well even against the existing competition worse yet it was quite obvious that Hilton after several years of indecision about Atlantic City was finally going all out with a major facility to me

Hilton was a hard company To figure it was founded in 1921 by con rad Hilton who built it into one of the great hotel chains in the world his son Baron joined the company in the 1950s and of course it was only a matter of time before he took over it had nothing to do with Merit it's called Birthright in 1966 Conrad finally retired and baron was named chief executive it's not easy to make your own mark on a company your father founded And built into a huge success some Sons opt out altogether and don't

even try to compete others are content to manage what their fathers have already built a few Sons set out to outdo their fathers at the same game and that may be the toughest thing of all particularly when the father's name is Conrad Hilton Baron's first major responsibility back in 1959 was to run Hilton's cart blanch credit card business which they just Bought he screwed it up and carte blanch lost millions of dollars over the next six years Hilton finally threw in the towel in 1966 and sold out to City Bank in 1967 Baron convinced his

father to sell Hilton's International Hotel division to tww in exchange for tww stock which was selling for about $90 there was just one problem OPEC almost immediately oil prices started going through the roof which devastated the airlines within 18 months tww stock Had dropped by by half and by 1974 it was down to $5 per share until Carl icon took control of the company and turned it around recently the stock was worth far less than it should have been on the other hand the international hotels that Hilton sold which were recently sold again for close

to1 billion did great business they earned about $70 million in 1983 almost as much as Hilton earned from all its American hotels the same Year that's partly because Hilton resting on its past reputation had lost considerable ground in the luxury Market to more aggressive competitors such as Marriott and hayatt the once great Hilton name ceased being synonymous with the best in hotels Baron Hilton did make one decision that proved successful getting into casino gambling in 1972 Hilton purchased two Nevada casinos for about dollar 12 million the Las Vegas Hilton and the Flamingo Hilton Together the

two casinos began to account for a growing percentage of Hilton's profits 30% in 1976 40% in 1981 and 45% or some $70 million in 1985 despite that success Baron couldn't seem to make up his mind about Atlantic City Hilton purchased a site at the marina around the time gambling was legalized began moving forward stopped suddenly and then started again half-heartedly by the time Hilton Finally committed to Construction in 1984 most of its major Nevada competitors including a bali czes Harris Sands and the Golden Nugget already had their facilities up operating and earning huge profits in

Atlantic City I have to say this much for Hilton having finally made the commitment it left no doubt it was going all out with an 8 Acre Site one of the biggest in town Hilton was determined to built on a grand scale a huge Majestic entrance Ceilings 30 ft High a 3,000 car self Park Garage Hilton described the project in its annual report as the largest undertaking in our history with a casino of some 6,000 square ft and a 615 room Hotel above it the facility was comparable in size to Harris at Trump Plaza which

at the time was one of the largest in town the difference was that Hilton's master plan included a second phase expansion to some 100,000 ft of Casino space and more Than 2,000 guest rooms hungry to start recouping its investment as soon as possible Hilton began construction at the same time it filed for a gaming license as I explained earlier the risk of getting turned down for a license Midway through construction was the reason I'd gone after licensing first but everyone else had done it Hilton's way and I could understand Hilton's confidence about licensing for starters

it was already licensed in Nevada in Addition at a time when virtually no other construction was going on in Atlantic City Hilton was making a huge investment in a mostly undeveloped part of town perhaps most important um in a business scarcely known for attracting Boy Scout companies the Hilton name was about as All-American as you could hope to find the licensing process seemed like little more than a formality for Hilton the problem was that the Hilton people got a little too smug and full of Themselves they assumed they were doing Atlantic City a favor by

coming to town when in fact the licensing authorities see it just the opposite way the burden of demonstrating suitability for a license rests entirely with the applicant no matter who it is Hilton took the view that it was entitled to a license it was a critical mistake I began to hear Rumblings that Hilton was was in trouble early in 1985 Atlantic City is a very political Town and everyone who does business there knows that Hilton trying to be smart hired a very political lawyer on the face of it that seemed like a Savvy move however

according to people I knew who were familiar with the Hilton licensing hearings it may have backfired the second mistake Hilton made was ignoring the experience of previous applicants Playboy for example had had been turned down for a license 3 years before the reason at least in part was Its past associations with a lawyer named Sydney Kack who supposedly had a history of organized crime connections for 10 years he'd also been on retainer to Hilton at $50,000 a year to help negotiate labor disputes I have no idea whether kosak is a good guy or a bad

guy but the only issue that matters is pleasing the Commissioners they'd made it very clear that they didn't like Kack instead of quietly severing the tie Hilton kept Kack on his retainer right up until the division of gaming enforcement raised specific objections to him in mid 1984 virtually the next day Hilton fired Kack Baron later acknowledged to the commission that he'd taken the action only because we know how strongly you people feel about the matter I that was the worst thing he could have said as one of the Commissioners who voted against licensing Hilton put

it later the corporation apparently didn't get Religion until it was pounding on the Pearly Gates of lure it didn't help when Baron later testified that Kack had never interceded on Hilton's behalf to prevent certain unions from striking Hilton's hotels within weeks of that testimony Kack wrote Baron a letter which he released to the media it described in great detail exactly the work he'd done for Hilton in Las Vegas it also included copies of letters Baron Hilton had Written thanking Kack for his efforts the the end of kak's letter was devastating you have caused me irreparable

harm he wrote Baron and as long as I live I will never forget that when did I become a shady character I imagine when you were having difficulty getting a license in the Atlantic City Hilton might have survived everything if Baron himself had taken the licensing hearings more seriously instead he virtually ignored them one of the few Times he saw fit to show up in New Jersey was for his own testim before the casino Control Commission nor were any of his top corporate Executives there for most of the hearings on February 14 1985 I was

in my office when I got a phone call from a guy named Al Glasgow who publishes a newsletter about the gaming industry called Atlantic City action Al is a true Damon runan character who lives and breeds gaming he knows as much as anyone in town about Who's doing what to whom did you hear about Hilton Al asked I said no what and he said they just got turned down for a license I thought he was kidding at first approval requires the concurrence of four Commissioners Hilton won a majority but as was the case with Hugh

Hefner three two in favor was a loss not a win in any case Al said he suspected there was a possibility Hilton might just decide to put the facility up for sale rather than try to fight for a Re-hearing Hilton was scheduled to open the hotel in less than 12 weeks they hadd already hired more than a thousand employees and they were adding at the rate of approximately a hundred people a day by opening day they'd have approximately 4,000 people on the payroll with that payroll and no income coming in you're talking catastrophe no matter

how big the company at the very least Hilton was under severe time pressure to get an Appeal heard by the commission even so I assumed that with more than $300 million was already invested they were going to do whatever they could to try to get licensed after talking with Glasgow and a few other people in Atlantic City I decided to call Baron Hilton out in California as much as anything else it was a condolence call you couldn't help feeling sorry for the man hi Baron how are you I said not surprisingly Baron replied not well

not well at all I can Imagine I went on because what happened is just too bad I've got to tell you Donald he said that I didn't expect it it caught me totally by surprise I told him that the move had caught everyone by surprise and the conversation just went on like that before hanging up I got to the business part of the call look Baron I said I have no idea what you want to do with this facility but if for some reason You're thinking of selling it I'd be interested in buying it if

the price is right Baron said he'd keep that in mind and he thanked me for calling I think he genuinely appreciated it I also figured that was as far as things would get Hilton already had plans to file for a rehearing and I still believe that the commission would eventually reverse its decision at the beginning of March I got a call from a friend named Benjamin Lambert who runs e still realy I'd first Met Lambert 10 years before when I was just beginning to look for a hotel chain partner for the Commodore Hotel deal he

made some suggestions and over the years Ben and I worked on several deals together we had our disagreements but the bottom line was that we were friends as it happened Ben was a member of Hilton's board of directors in the weeks after Hilton was turned down for a license we talked a few times about the situation Ben believed Hilton ought to Seriously consider selling on this occasion Ben was calling to invite me to a party he was holding for the Hilton board at his townhouse prior to their annual meeting that week in New York and

as he put it it's not an inopportune time for you and baron to meet about current events the board it turned put was deeply split about how to handle the Atlantic City situation the Cino Control Commission had just agreed to the rehearing Hilton Had requested on licensing nonetheless several board members including Ben believed that it made more sense to sell the facility immediately if the right buyer could be found their argument was that if the commission didn't reverse itself and Grant Hilton a license the consequences could be truly disastrous for the company by that point

a couple couple of months down the line they'd be carrying several thousand employees worse by selling the hotel Under Pressure they might get a bad price I went to the party and Ben introduced me to Baron whom I'd never met in person we ended up walking out to the garden and talking alone together once again the conversation was non-specific mostly Baron vented his frustration about Atlantic City while I listened sympathetically Baron is wary and reserved by Nature he's not the kind of guy who makes impulsive decisions so I played it very lowkey we got along

very Well and afterward I heard from Ben that Baron felt very comfortable with me there are times when you have to be aggressive but there are also times when your best strategy is to lie back very shortly after that Steve win of the Golden Nugget decided to make a fullscale assault on Hilton seeking control of the company it was probably the best thing that could have happened to me if it hadn't been for win I seriously doubt that Baron Hilton would Ever have made a deal with me or anyone else for his Atlantic City hotel

casino on April 14th wi wrote Baron a letter offering to buy a block of stock amounting to 27% of the entire Hilton company for $72 a share at the time the stock was trading for approximately $67 a share wi also said he was prepared if his initial offer was accepted to pay the same $72 per share to all Hilton shareholders ironically wi could never have gone after the company at all if it Hadn't been for Conrad Hilton when Conrad died in 1979 he totally screwed Baron there is no nicer way to say it the Assumption

had been that Conrad would pass on his near controlling interest in the company to Baron or at the very least that he'd spread it among family members instead Conrad Hilton used his will to disenfranchise his children and grandchildren at the time of his death Conrad stocken hilt was worth perhaps $500 million but Conrad believed very strongly that inherited wealth destroys moral character and motivation I happen to agree that it often does to me it makes sense to put money in trust for your children so they don't inherit millions of dollars when they turn 21 but

Conrad took that View to a ridiculous extreme he left Baron a token number of shares of stock and he left each of his grandchildren a piding $10,000 Each nearly all the rest of his wealth specifically his 27% share of the Hilton Corporation he left to the Conrad n Hilton Foundation he ordered most of the earnings from the stake to be used to support the charitable work of Catholic nuns in California the result was to make Baron just another highlevel corporate manager who lacked the power of a major stockholder even with the stock options that he

exercised over 10 years as chief Executive Baron still own owned only a tiny percentage of the company by 1985 what Baron did was to enter into litigation seeking control of the foundation's shares his chances of winning the case which had dragged on for years were uncertain for one thing he had the sort of adversaries you want to avoid in a litigation nuns and Priests of the Catholic Church Conrad's will had specified that if for any reason the foundation was Unable to accept his stock bequest Baron had the right to purchase the stock at its market

value as of 1979 federal law prohibits charitable foundations and their Affiliated parties from together owning more than 20% of a public company therefore Baron could legitimately argue that he was entitled to purchase for himself the 7% of the foundation shares that were in excess of the foundation's allowable 20% but Baron tried to take his claim much Further basically he tried to argue that for bantine legal reasons he was entitled to buy out the foundation's entire stake moreover by buying its stock for the 1979 price of 24 and 58 at a time when the stock was

trading around 72 in effect he'd be paying $170 million for $500 million worth of stock it's called a great deal it may also be called trying to rewrite your father's will my strong suspicion is that Baron knew His chances of winning the litigation were questionable more to the point if he couldn't get control of the stock he was in a far weaker position to fend off Steve win or any hostile takeover threat finally so long as he held on to his Atlantic City facility but remained unlic he was also highly vulnerable to shareholder lawsuits I

have no doubt how I would have reacted if I had been Baron Hilton I would have fought Steve win and his takeover threat and I would also Have fought for my license at the rehearing I'm not saying I would also have won but if I went down it would have been kicking and screaming I would have closed the hotel and let it rot that's just my makeup I fight when I feel I'm getting screwed even if it's costly and difficult and highly risky but then I wasn't running a public company so I didn't have to

worry constantly about Wall Street and shareholders in the next quarterly Earnings report the only person I had to please was myself in the end I think Baron decided that he just wasn't prepared to fight on two fronts at the same time for licensing as well as for control of his company and of the two control of the company obviously came first Steve win helped me in two ways by pursuing a takeover he put Baron on the defensive and kept him from focusing on his relicensing hearings at the same time the more wind's aggressive style Offended

Baron the more likely it was that Baron would turn to me as a white knight it's not a role I'm accustomed to but wind played right into my hand wind grew up in his father's bingo parlor the son of a compulsive Gambler later he made the right friends in Las Vegas managed to buy a small Stak in the Golden Nugget hotel and eventually took over his entire world has been Las Vegas and Atlantic City and gaming he's got a Great ACT he's a smooth talker he's Perfectly manicured and he's invariably Dressed to Kill in $2,000

suits and $200 silk shirts the problem with win is that he tries too hard to look perfect and a lot of people are put off by him Baron Hilton was one it's hard to imagine two people with more different styles Baron is a member of what I call the lucky sperm Club he was born wealthy and bred to be an aristocrat and he is one of those guys who never had to prove anything to anyone he doesn't try to Impress with his style or his clothing or anything else if Steve wi tries too hard it

might be said that Baron Hilton doesn't try hard enough uh although Steve would probably never admit it I'm convinced that he thought he was in a no lose situation when he launched his takeover bid against Hilton I believe Steve figured he'd end up buying Hilton's Atlantic City hotel and quite possibly at a favorable price many people thought that the hotel was all Steve really wanted there was even a certain logic to it under siege from all sides Baron could kill two birds with one stone by dealing with Steve he could say look I'll sell you

my hotel if you'll agree to give up trying to get control of my company but Steve wi underestimated how much he'd become anathema to Baron that's where I came in one day after wi made his takeover bid Baron Hilton became much more serious I about Negotiating with me my first offer to Hilton was $250 million as big a number as that is I knew Baron wasn't going to sell for that price he told me when we first met that he had $320 million invested in the facility selling out at any price was a horrible Prospect

for him but reporting to shareholders that he'd taken a loss on the facility was out of the question within a couple of days I raised my price to $320 million there was no time to be cute and no room To be tough in this negotiation either I bid the price or I walked away at the time $320 million even $250 million represented by far the biggest gamble I'd ever taken in my life just a year earlier I'd completed construction on the boardwalk facility for less than $220 million in that case holiday financed the entire deal

and guaranteed me against operating losses this time the risk was entirely mine as soon as I Decided to bid $320 million I called John Torell a good friend who is president of Manufacturers Handover trust we'd already done a great deal of business together and on this occasion we had an amazingly short conversation John I said I'm calling because I have an opportunity to buy the incredible Hilton facility in Atlantic City for $320 million I'd like you to lend me the money and I'm going to need it within a Week John asked me a couple of

questions and after two minutes he said we have a deal just like that it goes to show you the value of credibility in return I did something I'd never done before I personally guaranteed the loan it was a deal based almost entirely on my gut I made my bid without ever walking through the hotel several of my people had taken a look and I'd gotten to know a lot about the construction From contractors who'd worked on the facility however I felt it wouldn't be appropriate to show up myself in the middle of all the turmoil

Hilton was going through I'd told my father the story he would have said I'd lost my mind I remember very well as a kid accompanying my father to inspect buildings he was considering buying in Brooklyn we might have been talking about a 100,000 or $200,000 purchase price but our inspections were anything But casual we'd spend hours in the building checking every refrigerator and sink looking over the boiler and the roof and the lobby nor would my father have been alone in his Horror in past situations opinion about deals I was considering had usually been split

in this case nearly everyone I talked to opposed the deal I was having enough trouble on the boardwalk with holiday ins they pointed out I had no management for this huge new facility scheduled to Open in two months I'd have to take on huge Financial Risk personally I had only a verbal commitment from Manny hany and it wasn't clear what conditions they might ultimately add to when documents were drawn or whether they'd have second thoughts about the whole deal there was even considerable doubt that the market could support another major facility particularly one that would

have to carry a huge debt service at a time when interest rates were still quite High Why everyone said to me would I even consider this deal for one reason only I believe that managed well it had the potential to earn a ton of money once we agreed on a price we still had a thousand other smaller points to negotiate before we could sign a formal purchase and sale agreement on April 14th 1985 we sat down in Jerry shrager's offices at 101 Park Avenue with the lawyers from both sides to get the deal Done often

the easiest part of a deal is price it's all the other points in this case guarantees about construction completion responsibility for defects size of deposit allocation of expenses between contract and closing that end up creating problems and killing deals Hilton from the very start was taking a fairly hard line basically they wanted to sell the hotel as is so when the contracts were signed they could walk away from Atlantic City with no further Obligations Baron by this time was almost rabid in his hatred of New Jersey and particularly Atlantic City the sooner he could put

this nightmare behind him the happier he'd be the problem for me was that if I if I didn't win some guarantees about completion of construction I risked getting killed later on say for example that it turned out there was a major defect in in the plumbing or the air conditioning system and I was forced to rip it out in a Building this size a major repair could easily run to many millions of dollars early on in the negotiations we seem to be winning on the deal points that we cared about but then about Midway through

the person in charge of Hilton's negotiations Gregory Dylan the Executive Vice President of the company got a call from Baron Hilton who was back in San Francisco when Dylan returned to the table the whole tenor of the negotiation suddenly changed I can't say for certain But it's my strong suspicion that Baron had decided he wanted out of the deal in all likelihood because he'd gotten a last minute offer for more money it's even possible that the offer came from Steve wi and the Golden Nugget in any case Dylan and the Hilton lawyers suddenly began to

raise questions about deal points that we'd agreed on I've been in a lot of negotiations and I sensed immediately that they were trying to use these points as deal breakers if We couldn't agree on completion guarantees for example then they could walk away from the table without appearing to have weled on the deal merely because they'd been offered a better price we reached something of an impass Greg Dylan made a suggestion we're not getting anywhere he said so let's break this up and we'll come back tomorrow and continue on the face of it the suggestion

made sense it was early on Saturday morning we'd been in the Offices around the clock for nearly 48 hours and everyone was totally exhausted and nearly incoherent but my fear was that if we put off the negotiations for a full day the deal would never get done as a compromise I suggested we take a break for several hours and get back together about 1 in the afternoon the Hilton people agreed and we broke up at that point my lawyers made one more attempt to convince me to let the deal die gracefully in particular Gary shrer

Was concerned about the financing even at that point we didn't have a formal signed commitment letter from manufacturers Handover but to me a verbal commitment from John Terell was as good as a signed commitment Jerry's point was that even if the commitment was firm the guarantees I was being asked to make might make it hard for me to borrow money for other large deals it was a very strange situation as I sat in Jerry's office I wasn't sure who was More eager to break up the deal my lawyers or theirs as it turned out the

Hilton team was more than two hours late in getting back which only confirmed my suspicions by the time they finally showed up around 330 I was convinced that the only way I'd get the deal done was to shame them into doing it I stood up and began my pitch how could they shake my hand and then not stand by the commitment how could they negotiate for three days and then walk Away how could they force me to spend hundreds of thousands of dollars on lawyers and not follow through it was a disgrace I said it

was immoral it was wrong it was dishonorable my tone was more hurt than outraged or angry I can be a screamer when I want to be but in this case I felt screaming would only scare them off much of the deal had already been negotiated and under the circumstances unless I gave Hilton a good excuse it would be hard Psychologically for them to walk away it's also possible of course that Hilton's hard line was all oppose a way of trying to ensure that they Clos the deal with as few contingencies as possible in the end

we reached a compromise they would use their best efforts to ready the hotel for opening and they'd agree to completion of a specific punch list of Unfinished items also they would allow me to hold back $5 million of the purchase price Subject to the facilities being delivered complete and In First Class condition as defined in specific terms in the contract I assumed the construction was sound if it turned out that I was wrong and the defects I discovered ended up costing an additional $30 million I believed Hilton would still be legally responsible at 900 p.m.

on April 27th 1986 we shook hands and signed a formal contract I turned over a non-refundable 20 million dollar deposit and we set our closing for 60 days later on May 1st I made my first visit to the facility I just purchased for $320 million as soon as I walked in I sensed I'd made a good decision much work remained to be done but it was a spectacular looking building immediately I began pushing all my people very hard over the next six weeks we managed to accomplish what it had taken most other casinos as much

as a year or more to do we got our Temporary certificate of occupancy we finished the vast paperwork for our licensing we hired 1,500 employees over and above those Hilton had hired and we got the hotel and casino ready for opening we also settled on the name Trump's Castle My First Choice had actually been Trump Palace but then Caesar's Palace filed for an injunction on the grounds that it had exclusive rights to the name Palace I decided it just wasn't worth a battle we needed to Get marketing and advertising campaigns under way and the last

thing I wanted was to be forced to make a name change after we'd already spent Millions promoting Trump Palace ironically no sooner did I announce my intention to call the facility Trump's Castle than holiday ins filed their own suit to prevent me from using the name Trump at all on a competitive Casino within weeks however the suit was Thrown out even before we opened Trump's C hastle I began discussions with several Investment Banking firms about floating a bond issue to replace my bank financing from manufacturers Handover I wanted to take myself off the hook personally

even if it meant paying a higher interest rate to do so the major problem with floating a bond issue was that Trump's Castle had no performance record by which anyone could calculate how much debt it could reasonably handle Also the Trump organization had no track record running a casino since we'd yet to manage one ourselves in short anyone who bought Trump's Castle bonds was making a leap of faith they were betting that we'd make the facility highly successful from the start that was the only way we could meet a Debt Service in the range of

$40 million a year to put that in context there were several existing casinos in town that couldn't come close to supporting that kind of Debt Service somewhat to my surprise several Investment Banking firms bid for the right to handle my offering in return for a percentage of the total offering they would guarantee to find buyers for the bonds at a specified price among the biders was Drexel Burnham which invented the concept of high yield junk bond financing but Bear Sterns with whom I'd already done a lot of business offered to raise $300 million or nearly

95% of the total I Needed Alan Greenberg the chairman and Paul hallingby managing partner were willing to bet big on me and I liked that to attract buyers for a speculative offering like this one you generally have to offer the inducement of a high yield the bonds be Sterns prepared carried about the same yield as other casinos had offered on their own financings but those casinos had track records and offered far stronger Guarantees to buyers be Sterns did a fabulous job job I got a good deal but so did the buyers anyone who bought the

bonds is earning an exceptionally good return and the bonds are now selling at a premium the one thing I wanted to avoid above all was a repetition of the sort of problems we had from the beginning at the boardwalk facility rather than hire an outside general manager I decided to put my wife Ivana in charge I'd studied Atlantic City long enough to be convinced that when it comes to of running a casino good management skills are as important as specific gaming experience she proved me right by closing the deal with Hilton on June 15th we

were able to take advantage of the high summer season the next day we open without a hitch as Trump's Castle people packed the casino and we did extraordinary business way beyond our expectations on our first day we Earned gross gaming revenues of $728,000 for the slightly less than six months we were open during 1985 we grossed just over $131 million that was better than all but three of our competitors and far better than the boardwalk facility had done for the same period under Harris the one difficulty that arose in the early months had to do

with the clause in my contract with Hilton regarding delivery of the hotel in first class Condition under the contract $5 million of my purchase price was held back pending complet completion of all work as time went on however we discovered that there were numerous outstanding problems with the cooling tower the sewage system the computer system and the fire alarm among others during the first six months we were open my representatives and Hilton's quietly negotiated about exactly which defects Hilton was Responsible for and which they were not my people felt strongly that the items not satisfactorily

completed ran considerably more than five million on the other hand I was eager to resolve the matter amicably I liked Baron Hilton I felt sorry about his experience in Atlantic City and for months I was the first to defend him in any conversation as a result when the argument over who owed money to whom Seemed to be getting nowhere I decided to call Baron myself in January 1986 I got him on the phone and I said that since our disputes uh hadn't been resolved perhaps we should sit down together and work out some reasonable settlement

Baron seemed delighted that I had called he said that he would be in New York the following Monday or Tuesday and that he would call me then uh to set a date instead when I came into my office on Monday morning I was served With a lawsuit from Hilton seeking immediate payment of the $5 million the contract authorized us to hold back and I couldn't believe it the first thing I did was to call Baron again I don't understand this I said uh I've just been served with a lawsuit even though you told me we'd

sit down and work this out together this week Baron totally stonewalled me I don't know anything about a suit he said he suggested that I call Greg Dylan Hilton's Executive Vice President incredibly Dylan took the same position that he knew nothing about the suit not for one minute did I believe that both Baron Hilton and his top Deputy would be ignorant of a major lawsuit filed by the company I recognize that lawsuits are sometimes inevitable and I accept that as a reality of business but when a person tells me he's going to sit down with

me I expect him to honor that commitment if we still can't resolve the Situation that's another story from that day on I stopped defending Baron Hilton to anyone I also immediately ordered my attorneys to file a counter claim on April 2nd 1986 we did precisely that listing 94 separate deficiencies in the castle along with our estimated cost of repair the figure far exceeded the $5 million we'd been authorized to hold back both suits are still pending and I believe that will ultimately be Upheld but for that one sour note the story of Trump's Castle has

been almost entirely a positive one much of the credit has to go to Iana no detail escap escapes her she has systematically hired the best people in Atlantic City at all levels from crupes to host to her top Executives she oversaw the decoration of the hotel's public spaces which are now quite spectacular the facility is always spotless because she's meticulous even about that and great management pays off In 1986 we grossed $226 million a record for firste operations we are projecting revenues of $310 million and a gross operating profit well in excess of $70 million

it pays to trust your instincts chapter 10 low rent high stakes The Showdown on Central Park South sometimes by losing a battle you find a new way to win the war what you need generally is enough time and a little luck I had both at 100 Central Park South this is a story about a group Of tenants who fought very hard to keep me from tearing down the building they lived in and constructing a new one in its place they succeeded but by delaying me for several years during which real estate values soared and by

forcing me to totally change my original plans they inadvertently helped me come up with a less expensive and more profitable project ironically the easiest part of the whole deal was buying the property early in 1981 Louise sunshine my Executive Vice President at the time came in to say she'd heard there might be an opportunity to buy two adjoining buildings in a great location and the first was 100 Central Park South a 14 story residential building on the corner of Central Park South and Avenue of the Americas the other was the Barbizon Plaza a 39 story

hotel which fronted on Central Park and wrapped around behind 100 c Central Park South so that the east side of the hotel faced Avenue of The Americas the buildings were owned by a Syndicate that included Marshall lobe of the lob banking family the Lambert Brussels Corporation and Henry Greenberg by virtue of their location the buildings represented one of the best pieces of real estate anywhere in the world in addition to being on one of the Ci's widest and most elegant streets the buildings looked out over Central Park the barbazon Plaza was a somewhat rundown middle

price hotel earning a Modest profit at best 100 Central Park South was a building filled with rent controlled and rent stabilized Apartments meaning that the rent roll was barely sufficient to cover the operating costs of the building precisely because of these disadvantages I was able to negotiate a very favorable purchase price it helped that the properties hadn't yet been put up for sale on the open market as long as there were no other biders it was Much easier for me to make a case that the building's problems decreased their value it probably also helped that

the owners were a group of very wealthy men who had decided to sell not because they needed the money but because one of them was getting older and wanted to put his estate in order I'm not permitted to say what I paid but the sum wouldn't be enough today to buy a vacant lot one-third the size in a far less desirable part of man hatan I barely Looked at what the two buildings were earning I was drawn to the real estate value not the income I was buying a great location at a modest price and

I the way I looked at the deal there was virtually no downside almost immediately I was able to get a mortgage for the buildings which covered my purchase price in the worst case I felt I could always turn around and sell at a profit even in bad times there are buyers for first class locations another option was To do a modest renovation of the hotel and raise the rents on the ground floor stores to market levels as their leases came up in addition as tenants in rent controlled and rent stabilized Apartments passed away or moved

out of 100 Central Park South I could raise the rents on those apartments even by doing these relatively minor things I could earn at least a modest return on my investment but then modist isn't my favorite word the way to derive the most Value from the the site I believed was to knock down both buildings and to construct in their place one huge beautiful Modern Luxury condominium tower that posed two problems the first which I recognized from the start is that it's neither easy nor cheap to demolish a 44 story building such as the barison

still I was certain that the prices we'd be able to get for new apartments in such a premium location would more than justify any added Demolition costs the second problem which I didn't fully understand until much later is that it's almost impossible to legally vacate a building filled with rent controlled and rent stabilized departments I knew that some tenants were sure to resist moving but I figured time was on my side I could afford delay I was prepared to be as patient and as persistent as I needed to be what I underestimated was how much

the tenants stood to lose I soon came to Understand a simple Axiom the lower the rent the bigger the apartment and the better the location the harder people will fight to keep what they have it's no great hardship to consider moving if you're living in a mediocre apartment in a marginal neighborhood likewise if you're paying Market rent for a good apartment and you can find a comparable one at the same price a small Financial inducement will often prompt you to move but at 100 Central Park South many Tenants were fighting to protect the ultimate in

New York real estate beautiful apartments with high ceilings fireplaces and great views at an unbeatable location most important with rent control and rent stabilization they were enjoying one of the great windfall subsidies in the Free World on the open market their Apartments would have rented for as much as 10 times what they were paying if I'd been attendant at 100 Central Park South I'd have led the fight against anyone who tried to get me to move unfortunately rent control is a disaster for all but the privileged minority who are protected by it as much as

any other single Factor rent control is responsible for the desperate housing crisis that has plagued New York City for the past 20 years like a lot of failed government programs rent control grew out of a decent idea that ended up achieving exactly the opposite of its Intended effect rent control began as a temporary federal policy in 1943 the government government froze rent on every apartment in America as a way to provide affordable housing for returning veterans having achieved that the law was rescinded in 1948 but New York City adopted its own rent control law in

1962 under the city statute any dwelling built before 1947 was subject to rent Control in effect the city created an inalienable right for 5 million New Yorkers namely Lope price housing it sounds wonderful the only problem was that the city had no intention of underwriting it instead they forced landlords to subsidize tenants the costs of fuel labor and maintenance Rose steadily but the city refused to let landlords raise their rents to keep Pace with inflation much less the market itself when landlords simply couldn't Make ends meet anymore they began abandoning their buildings between 1960 in

1976 approximately 300,000 housing units in New York were abandoned the first Apartments to go either by abandonment or arson were the ones in the worst neighborhoods apartments in these buildings had the lowest rents landlords therefore earned the smallest profit margins and were least able to absorb Rising costs the other victims were the Poor tenants who had been living in these buildings whole neighborhoods in the South Bronx and Brooklyn turned into ghost towns the city in turn lost hundreds of millions of dollars in real estate taxes that landlords stopped paying once they'd abandoned their buildings perhaps

the worst thing about rent control is that it stopped protecting the people who needed it the most the best rent control departments have always been prized and difficult to Come by and people with power and money have always had an inside track on them during the past year an independent researcher and writer William Tucker has set out to document particularly egregious examples he cites buildings such as one on Central Park West at 73rd Street magnificently designed it has huge Apartments wonderful detailing a beautiful double height marble Lobby and of course gorgeous views it's no surprised

that people with money and Taste would want to live there Mia faroh for example has 10 rooms overlooking the park she pays about $2,000 a month for an apartment that might rent for Upward of $10,000 a month on the open market Carly Simon the singer and songwriter lives in the same building and pays about $2,200 a month for her 10 rooms overlooking the park down the street Tucker found that Suzanne Ferrell of the New York City Ballet has a 14 room Duplex near Lincoln Center for which she pays under $11,000 a month William ven horville

a very prominent attorney who served as ambassador to the United Nations under Jimmy Carter pays less than $650 a month for a six room apartment in a terrific building on East 72nd Street near Fifth Avenue Alistair Cook the TV personality pays about $1,100 for an eight room apartment on Fifth Avenue William Shawn former editor of The New Yorker lives in the same building and pays $1,000 a month for his eight rooms the most notorious example of all may be Ed Coke the mayor of New York Koch has a very nice three- room rent controlled apartment

with a Terrace in a beautiful part of Greenwich Village he pays $350 a month perhaps one5 what it's worth the worst thing though is that Koch doesn't even live in his rent controlled apartment he lives in Gracie Mansion the official residence of the Mayor unlike most developers I don't Advocate eliminating rent control I just think there ought to be a means test for anyone living in a rent controlled apartment people below a certain income would be permitted to keep their apartments at their current rent people with incomes above a certain sum would be given a

choice between paying a proportionally higher rent for their apartments or moving somewhere else the situation at 100 Central Park South is a perfect illustration soon after I purchased the building I did some research into the financial status of the tenants what I discovered was fascinating but not surprising there are three distinct groups the first who live in the largest Apartments overlooking the park on the higher floors are generally successful wealthy and in some cases quite prominent fashion designer Arnold scasi for example has a six room duplex facing The park for which he is paying $985

a month about what it cost to rent a one room Studio at Market rates Angelo deapo another wealthy tenant and an architect of some Eminence has the entire seventh floor facing the park nine rooms for a rent of $1,600 a month still another tenant owns a beautiful Brownstone on 63rd Street worth at least $5 million but also has four combined apartments at 100 Central Park South with fabulous views of the park from the 13th floor and a rent under two $2,500 a month all of these apartments could rent for many times what the current wealthy

occupants are paying the second group of tenants are what I'd call the yuppies younger professional people stock Brokers and journalists and attorneys while not necessarily millionaires these people are certainly Affluent a good number of them occupy one and two bedroom apartments facing the park the third group of tenants live in smaller apartment with tiny kitchens and windows facing the court not surprisingly these people are generally of modest means a number of them are elderly living on Social Security their rents are below Market but not nearly to the degree of their wealthier neighbors in the front

Apartments a comparable studio in the Neighborhood might rent for twice what most of these tenants are now paying the leader of the tenants John Moore was a man who didn't quite fit into any group in his early 40s this gentleman came from a family of money and social standing his grandfather was a major stockholder in Tiffany and Company before it was bought by Walter hoving but he himself had not been very successful I've always been convinced that leading the tenants gave him a way To feel useful and important of course he also had something very

valuable to protect a beautiful two-bedroom Park View apartment for which he paid a very modest rent vacating the Barbie on Plaza was easy all I had to do was stop renting hotel rooms before I gave up that income however I wanted to vacate 100 Central Park South too unfortunately I made a very critical mistake right at the start I should have gotten involved myself that's what I'd always done in The past and that's what always worked for me but frankly convincing tenants to move wasn't the kind of work I relished instead I decided to hire

a company that specialized in relocating tenants Citadel management was ready recommended to me by several top Executives at well-known companies who'd used the firm and vouched for its reputation I wasn't looking for tough guys this was a high visibility location and a lot of people were gunning for Donald Trump already the last thing I needed was to create controversy my original plan was very straightforward we'd let the tenants at 100 Central Park South know that we intended to eventually demolish the building along with the barbazon next door then we'd offer them help in finding suitable

new apartments as well as cash incentives to move very quickly however the tenants got organized they formed a tenants Association and decided to hire A law firm to represent them cost Was No Object the wealthiest tenants had the most money to lose and they were more than willing to underwrite any attorney fees several agreed to contribute as much as $8,000 a year to the cause that was cheap after all compared with the $10,000 a month they might have to pay for a comparable apartment elsewhere The Firm that the tenants chose had been somewhat successful representing

tenants facing eviction They made a better living than most landlord attorneys their approach was to resist eviction on every front and tie things up in court for as long as possible perhaps hoping to make as big a settlement as possible with the landlord I felt confident that I had every legal right to vacate 100 Central Park South for the purpose of building a new and larger building in its place to evict the tenants who lived in non-rent controlled Apartments all I had to show Was my plans to demolish the building and put up a new

one in its place to evict the tenants under rent control I had to meet stricter standards but none that seemed insurmountable first I had to demonstrate that my new building would provide at least 20% more housing units than the old one that was easy enough since it was obviously in my interest financially to put up a bigger building second I had to prove that the old Building was earning a profit after expenses of less than 88.5% of its assessed value by virtue of rent control the assessment was a poultry $1.5 million meaning the city got

almost no taxes from the building and although I wasn't permitted to include my debt Service as part of my expenses the building still didn't come close to earning an 88.5% margin if my debt service was included I was actually losing a substantial amount of money Either way if the city ruled purely on the merits I was convinced they'd have to approve our demolition application and order any remaining tenants out when Citadel took over management of the building early in 1981 I gave them two instructions the first was to try to find new apartments for as

many tenants as possible the second was to continue to provide all essential services to the tenants it happens to be very easy to vacate a Building if like so many landlords you don't mind being a bad guy when these landlords buy buildings they intend to vacate they use corporate names that are difficult to trace then they hire thugs to come in with sledgehammers and smash up the boiler rip out the stairways and create floods by cutting holes in pipes they import truckloads of junkies prostitutes and thieves and move them into vacant apartments to terrorize holdout

Tenants That's What I Call harassment I wouldn't have done that sort of thing for moral reasons nor would I have done it for practical reasons I buy buildings in my own name and I have a reputation to uphold the tenants at 100 Central Park South got an abundance of heat and plenty of hot water I made sure to deal with the building's outstanding violations however modest even though you'll find dozens of violations in elegant Buildings all over the Upper East Side the last thing I wanted was to give these tenants legitimate grounds for opposing me

what I didn't do was Run 100 Central Parks South as if it were a white glove Park Avenue building the rent roll which barely covered my basic expenses simply couldn't support luxuries nor did tenants paying tiny below Market rents have any right to expect them for example when we took over there was a telephone in the lobby Not a pay telephone but a free telephone it was supposed to be for emergencies it turned out that some tenants were using the phone to call their friends in gustad and St Moritz the doormen were taken out of

their fancy uniforms that saved a small fortune in dry cleaning bills to ensure security the doormen stopped leaving the door to meet tenants halfway down the street to carry their packages High wattage lights in the hallway were Replaced with lower wattage bulbs because as any costc conscious landlord will tell you that alone saves many thousand dollar a year in electric bills what we didn't anticipate was that the tenants would try to use the fact that we were running the building more efficiently as evidence that we were harassing them and making their lives intolerable in a

way it was fitting we were talking about at least some people after all whom hardship is not being Able to get a table on 30 minutes notice at lir if there's one thing I've learned about the rich it's that they have a very low threshold for even the mildest discomfort the tenants even figured out a way to turn our relocation offer into evidence of harassment we were they claimed using persistent and intense pressure to get people to move in reality each tenant was approached with an offer of help in relocation if our offer was turned

down which was usually The case since the tenants had agreed to oppose us on everything that was the end of it some tenants even told us that they had been warned by the tenants committee not to consider our offer the irony is that we might well have been able to offer better alternatives to the tenants who lived in the less desirable Apartments the one thing I can't deny is that claiming harassment was a clever tactic harassment is a virtual buzzword in New York it prompts instant images of Vicious landlords and victimize tenants if the tenants

attorney could somehow convince a sympathetic jury probably tenants themselves that a harassment case had Merit we'd automatically be denied our demolition application the tenants of 100 Central Park South wouldn't have to move in the meantime they could generate plenty of negative press about me merely by alleging that I was harassing them the fact that I denied the charges would only make it a Juicier story unfortunately we made several moves that played right into the tenants hands for example we decided to bring eviction proceedings against any tenant at 100 Central Park South who was in significant

areas on his rent or who wasn't using the apartment as a primary residence as required by law landlords all over the city bring these proceedings every day they are perfectly legitimate and we won in several instances stupidly we also brought Several cases that were flawed in one for example we claimed that a tenant hadn't paid his rent it turned out he had his cancelled check as evidence and the payment simply hadn't been recorded in citadel's books when they realized the error they told the tenant they dro the action if he produced the check by then

however the tenants lawyer saw a perfect opportunity to further demonstrate their case the tenant refused to produce the check and Obviously we lost this case in court in another situation we failed to give a tenant sufficient legal notice of an impending eviction proceeding our case was legitimate but the Court ruled that we should have known the law had been changed recently to require longer notice you know another mistake was tinning up the windows of vacant apartments it happens to be exactly what the city does with its own vacant apartments all over the city to protect

Them from vandalism you know but then the city doesn't own buildings on Central Park South it would have been smarter and it would have saved us a lot of trouble if we'd come up with a nicer way to deal with the windows from the start nothing generated as much controversy as my offer to provide housing for the homeless at 100 Central Park South by the summer of 1982 about a year after I took over the building the Problem of the homeless in New York was beginning to get a lot of attention one morning after passing

several homeless people sleeping on benches in Central Park I got an idea I had more than a dozen vacant apartments at 100 Central Park South because I still planned to demolish the building I had no intention of filling the apartments with permanent tenants why not I thought offer them to the city for use by the homeless would on a Temporary basis I'm not going to pretend that it bothered me to imagine the very wealthy tenants of 100 Central Park South having to live alongside people less fortunate than themselves for a while at the same time

I genuinely felt it was a shame not to make use of a few vacant apartments when the streets were filled with homeless people almost immediately the columnists and editorial writers criticized my offer City officials sensing a potential Controversy told me no thanks it didn't help make my offer seem sincere when one columnist wrote a story saying that I'd refused uh a subsequent plea by a group representing polish refugees seeking to use the apartments in fact by then I'd had second thoughts about the whole concept my attorneys had researched the situation and determined that if I

permitted anyone to move into the apartments even on a temporary basis I'd have a very hard time ever getting them Out legally that was all I needed saying so publicly however might just have made a bad situation worse instead I said nothing which wasn't much better it was not one of my best experiences with the media but it taught me something that you don't act on an Impulse even a charitable one unless you've considered the downside early in 1984 a group of tenants went to the state and officially filed charges of harassment virtually All of

the complaints were trivial but I told my people to take care of everyone nonetheless even that wasn't enough in January 1985 the state agreed to consider the tenants charges of harassment obviously we'd made our share of mistakes early on on but none had caused anyone real hardship in my view the tenants tactics were a clever form of reverse harassment they knew there had been no real harassment the case instead was app ployed to hold on to Their bargain apartments or at the very least to exact a rich settlement from me the tenants committee orchestrated the

campaign nearly 50 tenants were part of the harassment action and all of them submitted identical boilerplate lists of complaints they even ended their letters with the same phrase Donald Trump is a modern-day Scrooge when my attorneys did a little further checking they found out something very interesting several of The wealthier tenants had been submitting the same sort of complaints to City agencies for the past 10 20 and even 30 years invariably accompanied by a request for a reduction in rent the tenants of 100 Central Park South were World experts in The Art of Living very

high for very little what the tenants did didn't count on is is that I'm not one of those landlords who roll over to avoid bad publicity or save a few bucks particularly when I think the charges Are unfair fighting back might run up my legal bills and even make me rethink my strategy but the one thing I wasn't about to do was allow myself to be blackmailed into a ridiculous settlement a couple of things did go my way the most important was the value of New York real estate it had risen steadily every year since

1974 but but in early 1981 about the time I bought the two Buildings on Central Park South it finally took a pause you know over the next two years during which I'd originally hoped to get my new building finished the market actually declined a lot of people thought the big boom was over in 1984 however the market picked up again strongly the economics were staggering in the fall of 1981 the average price per room for a Cooperative reached as high as $93,000 by early 1983 it dropped as low as $67,000 but by January 1985 when

my confrontation with the tenants was reaching ahead the average price per room had jumped up to $124,000 in short while the tenants were doing all they could to delay me New York real estate was nearly doubling in value even by building only on the barbazon site which I decided was the easiest solution I'd earn more than if I developed the Entire site two years earlier in addition we now had numerous vacant apartments at 100 Central Park South and with time the number could only rise the law permitted us to rent some vacant apartments at Market

rates in effect I was sitting on gold the other thing that happened during this period is that architectural tastes and Trends began to shift at the time I purch purchased the buildings on Central Park South the style in skyscrapers was still very much the Sleek highly Modern Glass Tower Trump Tower was perhaps the ultimate example because that design was so well received and so successful it seemed to me only logical to design a similarly Sleek modern building on the Central Park South site by 1984 however I sensed a new wave in architecture was setting in

and it was the wave of the old the people who buy Topline apartments in New York tend to be Extremely fashion conscious in architecture as in everything else I'm a practical man if an older look is what people want that's what I'm going to provide I'm not interested in buildings that don't sell early in 1985 I commissioned an architect to design a new building for the barbes on Plaza site but one that incorporated older classical elements compatible with 100 Central Park South in truth my heart Wasn't totally in it I'd never been a big fan

of postmodernism the architectural movement that first mixed classical elements with modern design to me it often represents the worst of Both Worlds the materials and the craftsmanship are rarely first class because most Builders won't pay what that requires and the classical elements in postmodern designs almost always look imitative at the same time these elements interfere with the Sleek Look of the best modern design when my architect showed up with his model for an older looking building on the barbazon site the design was not the first thing that caught my eye the new building I noticed

was much smaller than the one it was intended to replace what I asked the architect was this all about it's the zoning he explained when the barbazon was built there were no restrictions on size now that the zoning is so much stricter it's no longer Permissible to build such a large building on that site do you mean I said but that if I totally gut and rebuild the inside and leave only the facade and the steel frame intact that is okay but if I tear down the old building I have to replace it with a

much smaller and less dramatic new one and he said yes Mr Trump that is correct if that's the case I said then why should we knock down an old building to build a new one that will be less Than half the size won't look nearly as good as the old one and will cost a lot more it's simple Mr Trump he said the reason is that the windows in the barbazon are much too small for a luxury Residential Building the solution was obvious leave the building intact but cut out bigger openings and enlarge the windows

coincidentally my own taste were changing I was beginning to appreciate the detailing and elegance of certain great older buildings among them were The two buildings I owned on Central Park South I also began to realize how much a part of the Central Park South Skyline these buildings were our preliminary estimate for ripping down the barbazon and putting up a new structure in its place was $250 million when we cost it out the job of gutting and rebuilding the interior and enlarging all the windows we came up with an estimate of $100 million for the entire

job the cost of trying to Replicate my favorite feature of the Barbizon the Magnificent Stone Crown at its top was $10 million alone even at that it would never have matched the original renovating wasn't only cost effective it was also a better design Decision One Last factor helped turn the whole deal around for several years I'd been trying to purchase the St meritz Hotel directly across the street from 100 Central Park South the sellers were Harry Helmsley and Lawrence Wan two of The greatest real estate men ever the problem had always been cost they wanted

a huge price for the hotel which I believed was more than its earnings Justified several times they made deals with other buyers presumably for what they were seeking only to have the agreements unravel before closing time and again I've seen that happen with people who offer a top price for a property their eyes prove bigger than their pocketbooks and they end up Backing out after watching this process repeat itself several times I called Harry Helmsley and said I'd very much like to buy the St Moritz and in my case you know the deal will go

through but I don't want to pay the price you have in mind and he said well what you're offering is too low we negotiated back and forth and finally we settled on a price that I think was fair based on the hotel's earnings but I had an Ace in the Hole the one 400 room bison Plaza one Door up the street I hadn't told anyone but my plan was to close down the barbazan as soon as I purchased the St meritz the logic was simple when I closed the barbazon I could move Charles frauenfeld a

great Hotel manager and all of his best people over to the St meritz in addition many of the barbon's customers would inevitably follow since the St meritz was the only auditor moderate price hotel on Central Park South while I'd obviously lose some Customers when I closed down the barbazon I'd pick up a lot of them at the St Moritz at the very least I figured occupancy and revenues at the St meritz would increase by 25% virtually overnight the banks apparently agreed when I went seeking financing for the purchase I was able to get an immediate

commitment for $6 million more than my purchase price in short I was able to buy the St meritz without putting up any money at all and I ended up with $6 Million to put in my pocket when we got to closing Harry Helmsley was leafing through the papers and he noticed the size of my mortgage he didn't look thrilled but the sale was also a great deal for Harry and Larry after all they'd paid practically nothing to purchase the hotel years earlier I took over the St Moritz in September 1985 and closed the barbazon soon

after during the first year business at the St meritz increased by 31% or slightly more than I'd predicted but by virtue of more efficient management the margin of profit nearly quadrupled the one remaining issue I faced was the harassment suit at 100 Central Park South because I no longer intended to vacate and raise the building a harassment finding no longer threatened my plans still several of my lawyers urged me to settle the case purely to resolve An unpleasant situation specifically they suggested I work out a deal under which the tenants would drop their harassment suit

in return for my selling them the building outright for $10 million on its face the deal wasn't a bad one for me based on my original purchase price I stood to earn a very substantial profit by selling 100 Central Park South for $10 million but in the end I said no temperamentally I just couldn't accept The idea that the tenants were using harassment charges as a lever against me so that they could buy a building for less than market value this is where the tenants and their lawyers caused themselves the loss of a tremendous windfall

today in New York almost everyone wants to buy their Apartments meanwhile the harassment case stalled in the courts a state supreme court judge ruled in August 1985 that there was no clear evidence that Harassment had occurred in December 1986 the appellant division of the state supreme court unanimously upheld the lower Court's ruling the lawyers kept talking settlement finally late in 1986 nearly all the tenants agreed to drop any further claims against me since I no longer plan to demolish the building anyway agreed to pay up the total figure exceeded $150,000 while the state dropped its

case the city insisted that it intended to continue pursuing the harassment case against me even John Moore the leader of the tenants group was surprised for the city to put pushed the casee he said to a reporter it's like beating the horse after the horse has come back to the barn the real victims were the taxpayers the city was choosing to spend money and Manpower on a non-issue that had been resolved at a time when many important Issues had not it is my opinion that this case continues purely because I beat the hell out of

edos on the Trump Tower tax abatement and embarrassed him with wol monring in the meantime I renamed the barbazon plaza Trump Park and began my renovation one of the first things I did was to hire a company called holes Inc talk about surreal specialization these people did nothing but cut holes for a living fortunately They did it very well in a matter of weeks they turned the barbon's tiny Windows into huge picture window openings those openings alone were immensely valuable because a great view is worth a small fortune in a market about to be flooded

with new buildings we had something unique to offer the best of the old and the new the detail and ornamentation of the buildings exterior remained including the crown so did features such as the 12-ft ceilings In the apartments which no developer would even consider in a new building because the cost is simply too great at the same time the new construction gave the building several advantages over most older ones new Plumbing smooth walls modern wiring fast elevators and of course huge thermopane Windows the building is scheduled to be completed in the fall of 1987 but

we put the apartments on the market in November 1986 within eight months we'd sold 80% Nearly 270 apartments one individual bought seven apartments for a total of $20 million when the building sells out in all likelihood before a single person has moved in will have grossed an excess of $240 million and that's before I do anything with 100 Central Park South and the stores along the street all's well that ends well the tenants at 100 Central Park South kept their Apartments Central Park South retained two of its Landmark buildings And and the city will soon

be earning far greater taxes from the property than ever before as for me I'll ultimately earn a profit of more than $100 million on a deal that many people thought that you know would turn out to be a total loser and it was largely because the tenants managed to delay me chapter 11 long shot the spring and fall of the usfl all my life I've believed in paying For the best but when it came to the United States football league I decided to go a different route entirely by the time I bought the New Jersey

Generals in the fall of 1983 the league was already failing badly it had lost nearly $30 million the generals alone under the ownership of an Oklahoma oilman named Jay Walter Duncan had lost more than $2 million not to mention nearly every game they' played in real estate terms I was buying the South Bronx instead of Fifth Avenue and 57th Street but I didn't look at the generals as a typical deal I viewed it instead as a long shot a lark that I could afford to take I've always been a football fan I love sports and

having my own team seemed the realization of a great fantasy I also like the idea of taking on the NFL a smug self-satisfied Monopoly that I believed was highly vulnerable to an aggressive competitor as long shots go I like the odds on the Usfl my initial investment was relatively small and the potential rewards were quite great for less than $6 million contingent on the leagues continuing compared with the $70 million an NFL franchise my cost I was able to purchase a professional football team in one of the greatest areas in the world if I could

help turn the team and the league around I stood to earn back many times my initial investment at the very least I would have a lot of fun Trying the main problems with the usfl seemed fairly clearcut and not all that difficult to remedy the first was that the league was playing its games in the spring Sports have their seasons and fans like their football in the fall the television networks which essentially underwrite professional sports won't pay large sums for the rights to televise Spring football at the time I bought the generals ABC was paying

$1 million a year for exclusive Network rights to the Usfl spring schedule meanwhile the three networks together were paying a staggering $359 million a year for rights to the NFL fall games the first thing the usfl had to do was move to the fall the Second Challenge was to build a first class product to me that meant spending whatever money it took to sign top players promote our teams and create the sort of excitement that would make us a legitimate competitor for the NFL's fans and TV dollars two leagues had been Launched previously in competition

with the NFL and the outcome in each case was highly instructive the American Football League was formed in 1962 by eight very wealthy entrepreneurial men they signed top players and absorbed substantial losses in the service of of building the League's credibility during the early years by 1966 the AFL had signed away dozens of the NFL's best players and was widely seen as the more exciting of the two Leagues with the AFL raids Escalating NFL commissioner Pete Rosel surrendered he suggested suggested a merger of the two leagues and today those original AFL teams are among the

NFL's most successful franchises but even without a merger the AFL would have prospered the other Venture that tried to compete with the NFL was the world Football League it was launched in 1973 but by men of much less wealth and more limited Vision in contrast to their AFL counterparts the wfl owners signed very few name players placed their franchise in smaller cities and failed to attract any kind of Television contract within two years the wfl was bankrupt its Founders didn't lose a fortune but only because they didn't invest a fortune I foresaw two possible outcomes

if we moved the usfl to the fall and began to build quality teams and both of them were potentially good the first was that At least one of the three networks would offer us a substantial fall television contract which would help us continue to build an even stronger League fully competitive with the NFL the second was that the three networks all fearful of alienating the Monopoly NFL would refuse to give us a Fall television contract no matter how strong a product we had to offer in that case I believed we'd have strong grounds for an

Anti-Trust case against the NFL if we went the latter Route obviously we could lose and then our league would be dead but I believed the more likely outcome was some sort of Victory if the suit went to a jury and we were awarded reasonable damages particularly given the fact that any damage award is trebled in an antitrust case we'd have the financial base we needed another possibility was that the NFL anticipating a costly and humiliating Court defeat would offer some sort of settlement much as they had Done 20 years earlier with the a I made

no Secret of My Views two years later the NFL would try to claim in court that my plan to move our League season to the fall was somehow secret and Sinister in fact within days of taking over the generals I told any reporter who called me exactly how I felt then on October 18th 1983 a month after purchasing the generals I attended my first owner's meeting in Houston Texas I wasn't shy there either when my turn came to address my fellow owners I stood up and explained that I hadn't bought into the usfl to be

a minor league owner playing in the offseason of spring I pointed out that the greatest number of fans and by far the biggest pool of network television dollars were concentrated in the fall I reminded my fellow owners that because the NFL had just gone through a long bitter player strike the past fall many fans were Feeling restless and alienated and finally I argued that we had a chance to put the NFL even further on the defensive by moving aggressively to sign top NFL players whose contracts were coming up as well as the best graduating college

players if there was a single key miscalculation I made with the usfl it was evaluating the strength of my fellow owners in any partnership you're only as strong as your weakest link several of my fellow usfl owners were Strong as hell financially and psychologically among them were Michigan Panthers owner Al Todman and Philadelphia Stars owner miles Tannon bomb both of whom coincidentally had made their personal fortunes building shopping centers as well as Memphis showboats owner Billy dunov and Jacksonville Bulls owner Fred Bullard unfortunately I quickly discovered that a number of usfl owners lacked the financial

resources and the Competitive vision to build the sort of top quality League necessary to defeat the NFL they shuddered at the prospect of any direct confrontation with the NFL they were quite content to play in obscurity in the spring and they spent much more time thinking about ways to keep their cost down then about how to build the league up my most immediate priority was the team I'd just purchased the New Jersey generals were a disaster They'd just come off a season in which they'd won only four games and lost 14 the the team had

one great athlete and Superstar Hershel Walker the Heisman Trophy running back from Georgia but even hersel had yet to play near his potential meanwhile although the generals had just completed a full season of playing professional football across the river from the media capital of the world they had attracted virtually no press attention and very Few fans the best way to turn that around was to turn the generals around fans like winners they come to watch St great exciting players who do great exciting things hersel was obviously one but in football the team Rises or falls

on the quarterback nothing helped promote the AFL and the New York Jets as much as the signing of a University of Alabama quarterback named Joe namoth for a then unprecedented $400,000 a year namoth eventually led the Jets and the AFL to their first Super Bowl victory but even before that he earned his salary simply because he became the afl's most colorful charismatic drawing card the first player I went after was Brian cyp the quarterback for the Cleveland Browns cyp had been the NFL's Most Valuable Player a couple of Seasons earlier and he was a Bonafide

Superstar he was also in the option year of his contract meaning that he'd be available in a matter of months getting cyp was a Chance to help the generals and the usfl and simultaneously to hurt the NFL the negotiations proved to be long and difficult but on December 27th 1983 I held a press conference to announce we'd sign cyp to a long-term $800,000 a year contract with the generals by the time we got cyp we'd already lured away several other top NFL players the first was Gary Barbaro an all pro free safety from the Kansas

City Chiefs whom we signed on November 5th Signing Barbaro had a side benefit it showed other n players that we were serious about paying top dollar to build a top team on November 28th we signed Carrie Justin who'd been a starting quarterback for the Seattle Seahawks in December we signed a pair of linebackers from the Super Bowl champion San Francisco 49ers Willie Harper and Bobby leopole to protect ciper we signed a Veteran offensive guard from Cincinnati Named Dave lefan another negotiation that got some attention during that period was the one I conducted with Don Schuler

coach of the Miami Dolphins Schuler was one of the most successful coaches in NFL history but he was also vastly underpaid I immediately offered schula far more than he'd been earning I was willing to meet most of his demands but when he threw in a request for an Apartment in Trump Tower I drew the line I can afford to buy football teams in part because I don't give away Apartments still the negotiation ended ended up helping schula it forced the Dolphins to renegotiate his contract at a far higher salary which he certainly deserved we got

the most attention of all for signing Lawrence Taylor the all proo linebacker for the New York Giants and perhaps the best allaround player in the NFL on December the 31st 1983 we announced that Taylor had signed a four-year contract with the generals for a total of $3.25 million the catch was that it wouldn't take effect until 1988 when his contract with the Giants expired in a way that was even better than getting him immediately by signing a player of Taylor stature to a Futures Contract we were serving notice on the NFL that none of their

players not even those under multi-year contracts were beyond our Reach as it turned out when Taylor's deal was announced the Giants went nuts two weeks later on January 17th 1984 they offered him a six-year 6.5 5 million extension of his contract in effect I forced the Giants to increase Taylor's salary by $3 million just to prevent him from departing three years down the road then in return for my letting Taylor out of his General's contract the Giants agreed to pay me a penalty fee of $750,000 my aggressiveness in signing NFL players also seemed to inspire

other usfl owners the second usfl draft was held on January 4th 1984 the Pittsburgh franchise drafted Heisman Trophy winner Mike Rosier from Nebraska and signed him 5 days later the team's season ticket sales immediately jumped from 6,000 to 20,000 Brigham Young quarterback Steve Young a college Superstar signed a multi-million dollar contract with the usl's Los Angeles Express Don closterman the president of the LA Express also managed to sign 14 other draft picks every one of whom was a good NFL prospect altoe usfl teams signed nearly half of the top college players we went after Sports

Illustrated pose the obvious question in an article about the success of our draft how many more players like Rosier and young can the NFL afford to lose when our owners met in New Orleans on January 17th I pushed again to move our season to the Fall given our success in luring NFL players and signing top college prospects the time couldn't have been better I suggested a fall vote right then and there but The Reluctant owners managed to vote through a compromise instead appointing a long-range planning committee to study the springfall question to me committees are

what insecure people create in order to put off making hard decisions but at least I'd gotten the fall question on the Table as a serious issue I was made a member of the new committee and I was confident I'd ultimately persuade a majority of owners that the fall was our best hope meanwhile the NFL was beginning to run scared the best evidence was a meeting the league held in Cambridge Massachusetts in February 1984 to discuss its future and specifically the threat of the usfl the main seminar which we didn't Learn about until much later was

conducted by a highly respected Harvard Business School Professor named Michael Porter who had prepared a 47-page document entitled The usfl versus the NFL some 65 NFL Executives attended his presentation among them Jack donlin executive director of the NFL management Council as well as numerous team owners Porter bluntly outlined a multi-part plan for declaring Total War On our league by employing numerous anti-competitive strategies his two and a half hour presentation was divided into sections such as offensive strategies Guerilla Warfare and the Art of War China 500 BC Porter suggestions included trying to dissuade ABC from continuing

even its spring television contract with the usfl encouraging usfl players to unionize in order to drive up our costs and attempting to co-op the most Powerful and influential usfl owners by offering them NFL franchises as we launched our second season in the spring of 1984 we weren't yet aware of the NFL's secret campaign to destroy us but we were probably feeling its effects several of our more vulnerable owners most particularly those in Chicago Washington San Antonio and Oklahoma had begun to experience severe financial problems the danger to the league was less losing a couple of

Franchises than having our credibility damaged as long as we had problems it was difficult to get the press to focus on our stronger teams instead Sports writers wrote about declining attendance in the weaker cities and the personal financial problem some owners were having meanwhile as I feared the long range planning study dragged on a majority of owners had voted to hire an outside consultant McKenzie and Company to conduct the study McKenzie is Probably the best in its business but I like Consultants even less than I like committees when it comes to making a smart decision

the most distinguished planning committee working with the highest pric Consultants doesn't hold a c to a group of guys with a reasonable amount of Common Sense and their own money on the line McKenzie's study took three months and cost a princely $600,000 finally on the morning of August 22nd 1984 McKenzie executive Sharon Patrick presented her conclusions to the usfl owners who had gathered in Chicago the League's best hope she told us was to continue to play in the spring to limit expenditures severely and perhaps to consider a move to the fall somewhere down the line

among other things she reported that majority of fans who'd been surveyed in a poll wanted the usfl to stay in the spring you can probably Guess how much stock I put in polls the reality was that we just couldn't afford to adopt the McKenzie conclusions even if we cut our losses in the spring there was no foreseeable chance of making a profit and a lot of our weaker owners could afford to lose another dime we needed to take radical action and that's what I stood up and said within two hours of Patrick's presentation I managed

to get the issue of moving to the fall put to a vote it Passed by more than the required 2third majority that same afternoon we announced the decision to take effect following one last spring season the other thing we began to discuss at the meeting was bringing antitrust suit against the NFL specifically we authorized our commissioner Chad Simmons to send NFL commissioner Pete Roselle a letter putting the NFL on notice Simmons stated our views gently the position of the usfl as a new sports Enterprise and The market position of the NFL make it essential to

the survival of the usfl that the NFL and the NFL owners operate within the bounds of the laws and regulations which govern the conduct of a business having a dominant Market position put more bluntly our message was this if you try to hurt us we'll sue you by October it was clear that something had changed dramatically in the tenor of our discussions with CBS and NBC so long as we were just Considering a move to the fall both networks seemed interested in discussing a deal no sooner did we announce our move however then they both

backed off totally it was obvious to me that the NFL was putting enormous pressure on the networks not to do business with us in the fall partly on ABC with whom we already had a contract for the spring Pete Rosell later testified that he' never even discussed the issue with run Arledge the head of ABC Sports to me That was Preposterous Roselle and arge are longtime colleagues and good friends would anyone seriously believe that Rosel highly concerned about the implic ations of the usl's move to the fall wouldn't make his views known to his friend

arage and is it really possible that arage a man who made millions of dollars for ABC by inventing NFL Monday Night Football wouldn't be highly concerned with keeping Roselle happy the irony is that all three networks not Just ABC but NBC and CBS as well were actually losing money on NFL games after total fight's fees in excess of $350 million a year the networks by their own estimates lost many millions televising games during 1985 even so no network wanted to risk alienating the NFL football is the prestige TV Sport and in order to remain competitive

with one another the three networks were resigned to carrying the NFL as a lost leader as for the usfl we Were left with no option on October 17th 1984 we filed an antitrust suit in the southern district court of New York specifically we asked that the NFL be limited to contracts with no more than two of the networks and that we be awarded damages of $1.32 billion in the meantime we had a more immediate problem staying alive on January 3rd 1985 the usfl held its third draft of college seniors while the generals had improved greatly

too 95 and Averaged more than 40,000 fans a game other teams were falling more deeply into the red we very much needed a shot in the arm my own solution was to go after the best and most exciting college senior there was little doubt who that was Doug fluty of Boston College was a lock to win the Heisman Trophy in his final game playing against the University of Miami on National Television fluty capped his career by throwing a last second 50-yard bomb for A touchdown giving Boston College a 47 to 45 Victory very quickly the

pass became one of those instant replay Classics transforming fluty into an overnight sports legend I must have seen the pass at least two dozen times on various newscasts and sports shows I also like the fact that fluty had great media potential he was good-looking well spoken and Gutsy the sort of guy the Press loves to write about there were two minor problems one was that the Generals already had a very talented quarterback named Brian Cy the other was that Doug fluty stood just 5 feet 10 and weighed only 170 lbs a number of Scouts were

skeptical that he could make it in the pros where virtually every defensive lineman is 6'6 and weighs at least 260 pounds in the end I went with my instincts BR sight was a proven star but he was also 35 years old and his best years were probably behind him Doug fluty on the other hand had the Potential to become the usl's Joe namoth in the worst case he generate a lot of press which would help the General's season ticket sales and the image of the league generally in the best case he'd be a great player

too on February 5th we signed fluer to a 5-year contract at over $1 million a year which I personally guaranteed I don't like to do that but a player of fluty stature wasn't about to risk signing with a financially shaky League unless he had Some guarantees if the league ever did go under I figured I could sell his contract to an NFL team on February 6th I solved the issue of Brian site by trading him to the Jacksonville Bulls I wasn't about to have a very highly paid quarterback sitting on the bench fluty made his

debut on February 24th in an away game against the Birmingham stallions he started slow but came on very strong and almost pulled out a victory by Leading The generals to three touchdowns in the fourth quarter as for his box office value it was even greater than I expected the game was televised by ABC and Drew a nine rating nearly twice what we'd averaged the previous season two other notable events occurred that first weekend of the Season both having to do with quarterbacks one was the opening game performance of a quarterback named Jim Kelly of the

Houston Gamblers Kelly threw for 574 yards and five touchdowns proving that he was as good as any quarterback in either League unfortunately the other quarterback news was not good Brian syy playing his first game for Jacksonville suffered a separated shoulder which seemed almost certain to end his season and perhaps his career on March 10th we had our home opener against the LA Express if I had To pick a high point for the usfl it was probably that game over 60,000 fans turned up and anticipating a duel between the newcomer fluty and the usl's best proven

quarterback Steve Young both players put on dazzling shows and better yet the generals came out on top fluty threw for two fourth quarter touchdowns to give us the victory 3524 the day after flu's great game I wrote a letter to Harry Usher our new commissioner suggesting that the cost of Floody's contract be shared among all usfl owners on the grounds that floody's promotional value was League wide I knew it was highly unlikely that the other owners would go along and they didn't but my attitude is that you can't get hurt asking fluty Kelly and young

represented the the good news about the usfl and the bad news was that we were still stuck with a lot of weak teams led by mediocre quarterbacks my worst fears about the Consequences of having weak Partners came true Midway through our 1985 season John Basset was the owner of the usfl franchise in Tampa Bay previously he had been one of the founders of the ill-fated World Football League from the very start Basset and I had been on opposite sides of nearly every issue and specifically the move to the fall I'd managed to bring the majority

of my fellow owners over to my way of thinking but Basset never stopped Fighting me though he finally reluctantly did vote with the majority despite our disagreements I liked him personally and I felt sympathetic to his situation on this Sunday afternoon in late March it was widely known within the league that Basset had cancer that he was fighting for his life and that his behavior had become increasingly unpredictable during the previous few months what I'll never know is whether Bassett's illness affected his judgment that day in any case Basset agreed to be interviewed by ABC

announcer Keith Jackson who began by asking what he thought was wrong with the usfl What followed was a tirade before a national TV audience Basset viciously criticized the concept of moving the usfl to the fall he called the league Its Own Worst Enemy he said the usfl was guilty of mismanagement and virtually every other horrible sin he Could conjure up I caught the interview on a TV monitor in the Press Box and I couldn't believe what I was hearing my first thought was that Basset would make a great witness for the NFL in our antitrust

suit my second thought was that he was just a terribly frustrated man thoughtlessly venting anger if any one person had the potential to offset the damage wrought by Basset and our other weaker owners it was probably Harvey meerson the attorney we hired in The middle of 1985 to to take over our antitrust casee Myerson was the head of the litigation department at the firm Finley kumble and he was an expert in antitrust litigation he also had the sort of pugnacious confrontational attitude you need when you're the underdog taking on the establishment most of the other

usfl owners had long since written off the possibility that we'd win the antitrust suit the NFL they believed was just too entrenched but From the first time Myerson met us in April 1985 he told us he felt we had a very strong case he said that we should pull out all the stops to bring it to trial and that there was a better than even chance we'd win in the meantime one bright spot amidst all the usl's troubles was the fact that the generals and specifically hersel Walker were playing so well for the first two

weeks of the Season hersel simply wasn't being utilized he'd call me up in my office Depressed and say Mr Trump I can run over these guys if they'd just give me the ball I ranted and raved to our coach Walt Michaels but it wasn't until I literally threatened to fire him that he got the point in the seventh game of the season hersel was finally let loose he ran the ball 30 times for almost 250 yards setting a league record in each of the next 10 games he ran for more than 100 yards by the

end of the season he'd Racked up 2, 411 yards that broke the all-time professional football rushing record held previously by Eric Dickerson of the NFL I got a great kick out of that unfortunately Doug fluty was injured late in the 1985 season and that almost certainly cost us the usfl championship in the playoffs we lost by three points to the transplanted Baltimore Stars while fluty stood on the sidelines in February 1986 we agreed to Reduce the number of usfl teams from 14 to 8 in the process we weeded out the owners with the biggest financial

problems we also Consolidated our strengths the Houston Gamblers for example merged with my generals as a result we created a dream backfield that I'm convinced had no equal in professional football hersel Walker at running back and Jim Kelly at quarterback the other teams that survived the consolidation were also all Among our strongest and most popular Memphis Baltimore Jacksonville Tampa Orlando Arizona and Birmingham in April we got more good news when a federal judge named Peter Leisure set a jury trial to begin the next month in our Anti-Trust suit against the NFL that ensured us a

verdict before the start of our first fall season if we won the suit we'd be in great shape to launch if we lost I considered it highly unlikely that the usfl could survive but at least We'd finally be able to cut our losses the future of the usfl now rested in the hands of the six jurors chosen to hear our case the jury system is designed to ensure the fairest possible trial the problem is that a pool of randomly selected jurors isn't necessarily qualified to make judgments on complicated issues sometimes that isn't bad particularly if

you have a case that's weak and lawyer who is very persuasive the problem is Unpredictability you can have a great case and come out a loser and you can have a terrible case but come out a winner we got to present our side first and very quickly a consensus formed in the courtroom that Harvey meerson was beating The Living Daylights out of the NFL he put commissioner Pete Rosell on the stand and almost literally took him apart for 26 years Rosel had been running the NFL very successfully and very smoothly of course you don't Have

to be a genius to run a monopoly put that same man up against a tough competitor and it may be a whole different story Myerson pressed and Roselle got flustered he mumbled stumbled and spoke badly he turned red and he took back statements at times he appeared to be flat out lying halfway through his week of cross-examination Roselle had become physically sick his performance was so weak that I found myself actually feeling sorry for him in Retrospect however I realized that the jury probably felt at least as sorry for Roselle as I did and that

may well have helped save the NFL's case Rosell was least credible I thought when he talked about the Harvard seminar entitled The usfl versus the NFL the lynchpin of our case Rosell claimed he hadn't known anything about the seminar and that he got physically ill when he first heard about it weeks after the fact to your stomach sir asked Harvey meerson Totally dead panes said Rosel I see said meerson how long did it take you to recover about half a day Roselle replied I doubt that a single person in the courtroom believed Roselle during that

exchange at another Point meerson introduced some devastatingly incriminating comments that Roselle had made before a congressional committee back in 1961 w at the time the NFL's games were being shown on just one network CBS if all the networks were tied up by one football league a senator asked Roselle during his testimony wouldn't the other league possibly be at a major competitive disadvantage I should certainly think so Rosell said quickly adding there is no intention on our part of using more than one network by 1987 of course the NFL had all three networks tied up didn't

that put our Le League at a major competitive Disadvantage Roselle could only him and HW the one time I myself directly contradicted Roselle's testimony was over his description of a meeting the two of us had in March 1984 at the time the usfl owners were still debating whether to move to the fall the porter seminar at Harvard had taken place several weeks earlier and one of Porter's main strategies for destroying the usfl had been to try to co-opt the Strongest usfl franchise owners by promising us NFL franchises at Roselli's suggestion I rented a suite at

the Pierre hotel for a meeting on March 12th I like to keep every option open in life and I was certainly interested in what the commissioner of the NFL had on his mind Roselle testified at the trial that during our meeting I told him I was interested in purchasing an NFL franchise and that I'd get out of the Usfl if I could get into the NFL it was ridiculous on the face of it I never had any interest in owning a football franchise outside of the New York area and I had long since determined that

neither of the two new york-based NFL teams the Giants or the Jets was up for sale what really happened at the meeting is that Rosel tried to woo me plain and simple he said he considered me a good candidate for an NFL franchise whether it was the generals through merger or an NFL team which he said he could help me get in return he said he wanted two things that the usfl not moveed to the fall and that the league not bring an antitrust suit against the NFL I had no doubt about what Roselle was

up to he was testing the waters if he could get rid of the usfl merely by absorbing a couple of our teams into the NFL he was prepared to do that I'm certain at the same time by merely dangling an offer he gave himself deniability in the event That I turned him down that's exactly what I did sure enough he rewrote the story of our meeting we called 18 Witnesses in all during the first month of the trial and we scored a lot of points Myerson showed how the NFL had bullied the three networks into

refusing to consider giving the usfl a TV contract he showed why the usfl could not survive without such a contract he offered endless evidence led by the porter study that the NFL had Consciously and illegally set out to destroy the usfl by the time we'd finished presenting our Witnesses even the Press was beginning to sense the possibility that we might win the case the headline of a story in Sports Illustrated caught the mood best give the first round to the usfl it said followed by an even more devastating subhead the embattled younger league has scored

tellingly against the NFL in the trial of its $1.32 billion antitrust suit now the NFL has the ball looking back I think our strength may have backfired just as the NFL's weakness ended up prompting the jury sympathy meerson style the silk handkerchief in the pocket of his perfectly tailored suit his theatrical way of speaking the methodical relentlessness of his attack may have come off as too aggressive and too slick by contrast I think the NFL came off as the beleaguered underdogs Like Roselle who became sick and was so unconvincing during his cross-examination the NFL lawyer

Frank Rothman was so weak and Ash and face the last days of the trial that everyone including me felt very bad for him many didn't even believe he would be able to finish and in fact he was rushed to a hospital for a major operation shortly after the trial's conclusion I believe rothman's troubles elicited further sympathy from the jury I was part of the Problem as a witness I was well spoken and professional I think very much a contrast to Pete Rosell but that probably played into the NFL's hands from day one the NFL painted

me as a vicious greedy Makey a valiant billionaire intent only on serving my selfish ends at everyone else's expense the usfl attorney Frank Rothman told the jury in his opening remarks it's control R and dominated by Donald Trump who can Buy and sell many of the owners in the NFL in truth of course the wealthy powerful NFL owners cowed only to the extent that it served their ends in retrospect we might have been better off to put on the witness stand several of the smaller usfl owners who'd lost their shirts and had genuinely sad stories

to tell the other way the NFL beat us was in pure public relations I've got to give this to Roselle he's always been great at promoting his League his chief Spokesman is a guy named Joe Brown and Rosel deserves credit for using him well after each day's testimony Brown would go to the halls and Lobby the Press masterfully telling them what a great day it had just been for the NFL it drove me crazy I'd say to Harry Usher our commissioner why aren't you out lobbying the press and he'd say it isn't important it's the

jury we've got to convince unfortunately that's not the way it works although the jury is is Instructed not to read any newspaper coverage or watch any television reports about the trial it's nearly impossible to resist reading about a case you're part of particularly one that's getting massive attention even if some jurors did resist they undoubtedly heard about the trial coverage from their friends and family why else after all would Roselle assign Joe Brown to Lobby reporters every day for 6 weeks for all that when the jury finally began Deliberations on July 25th 1986 I was

convinced we'd made the more effective case and that they'd find in our favor what I never anticipated was that we could win and end up losing anyway after four days of deliberation the six member jury concluded on July 29th that the NFL had violated antitrust laws by conspiring to monopolize professional football and that they did illegally damage the usfl but then they voted to award us only a Token $1 in Damages it was a hollow Victory without damages the decision had no teeth since the NFL didn't get punished for breaking the law when the jurors

were interviewed by reporters immediately after the verdict was announced it turned out that they'd been deeply divided at least two of them had wanted to award us substantial damages one a school teacher named Miriam Sanchez had favored giving us damages of $300 Million but said that she'd misunderstood the mechanism for doing so I didn't understand the instructions she told reporters so I had to put my faith in the judge hoping he would give the usfl more money I wasn't happy about the outcome but in a way I was relieved my attitude is that you do

your best and if it doesn't work you move on to the next thing by the time time the trial took place I had lost quite a lot of money on the generals and the usfl had lost many Times my number without the prospect of a fall Network television contract there wasn't any point in investing more money most of my fellow owners agreed one week after the decision the usfl owners met and voted to suspend the season at the same time we voted to appeal the jury's ruling unfortunately the fans come out the biggest losers the

NFL's monop power is secure again and the owners have less reason than ever to consider adding new teams In cities that have long been seeking franchises yeah meanwhile the best usfl players have been picked up by NFL teams uh hersel Walker was signed by the Dallas Cowboys because i' personally guaranteed Walker's contract he could have collected $1.2 million from me for each of the next six years and never played football but Hershel's a competitor and the money was secondary as it turned out I made a very good deal with Dallas they could have refused to

Pay for his big contract but figuring that Dallas was under intense fan pressure to sign hersel I told them I was interested in letting hersel go only if they picked up the full cost of his contract sure enough they agreed it was good for me it was good for hersel and it's even turned out to be good for Dallas hersel joined the team in August and although he had virtually no time to practice he finished the season as the Cowboys leading combined rushing and Receiving yardage Gainer Jim Kelly also immediately became a star as quarterback

for the Buffalo Bills Freddy Gilbert one of our defensive linemen went to Atlanta and established himself as one of the team's best players even Doug fluty who everyone said was too small for the NFL was signed by the Chicago Bears dozens of usfl players were signed to NFL contracts and many have become stars on their new teams watching players like herel Walker and Jim Kelly play in the NFL does sometimes make me wish our league could have survived I'm convinced that if the usfl had played last season the generals would have fielded one of the

best teams in professional football not that I've ever given up entirely I'm a big believer in comebacks and the usfl is appealing this ridiculous verdict in recent months I've received numerous calls from a very smart very presistent guy who is trying to put together an entirely new fall league he wants me to Take the New York franchise and I'm seriously considering it chapter 12 icecapades rebuilding wman rink never had a master plan I just got fed up one day and decided to do something about it on the morning of May 22nd 1986 there was a

story on the front page of the New York Times saying that New York City officials had decided to start all over in their effort to rebuild the wolman scap skating rink in Central Park If everything went well said the city the rink would be ready to reopen in approximately 2 years I couldn't believe it first of all there was no reason to believe anything would go well much less everything the wolman rink built in 1950 had first closed for renovations in June 1980 the work was scheduled to take two and a half years even that

seemed like a long time to rebuild an ice skating rink coincidentally in June 1980 I broke ground for Trump Tower a 68 story Skyscraper with six floors of shopping thousands of square feet of office space and 263 residential apartments two and a half years later we completed Trump Tower on time and on budget from my new apartment I had a view of wolman rink it was not a pretty side although millions of dollars had already been spent on its renovation it was obvious even from a distance that the rink was nowhere near finished three more

years passed Millions more dollars Were spent and things just got worse so bad in fact that on this may morning in 1986 the city felt compelled to announce it was starting the whole process over from scratch I knew absolutely nothing about building ice skating rinks but I did know something about construction if it took me two and a half years to put up a major skyscraper surely it was possible to build a $2 million ice skating rink in a matter of months two years earlier when the job Was already a disaster I'd called Henry Stern

Commissioner of parks and offered to take over construction from the city for no fee he turned me down now after reading about this latest debacle I called Henry again and repeated my offer he had the same respon no thanks he said we can do it ourselves that's great Henry I said except that you told me the same thing two years ago and look what happened I decided to write a very strongly worded Letter to Ed coach the mayor of New York I was appalled by the city's incompetence I genuinely felt I could get the job

done and I believed the rink was something hundreds of thousands of New Yorkers including my own children had a right to enjoy whatever anyone may think my motive was that simple dear Ed my letter began for many years I have watched with amazement as New York City repeatedly failed on its promises to complete and open the wolman skating Rink building the rink which essentially involves the pouring of a concrete slab over coolant piping should take no more than four months time to hear that after six years it will now take another two years is unacceptable

to all the thousands of people who are waiting to skate once again at the wman rink I and all other New Yorkers are tired of watching the catastrophe of wman rink the incompetence displayed on this simple construction project must be Considered one of the great embarrassments of your Administration I fear that in two years there will be no skating at the wman rink with the general public being the losers then I got to the real point I am offering to construct and pay for a brand new Walman ice skating rink and have it open to

the public by November of this winter I would lease the rink from the city at a fair market rental and run it Proper after its completion I uh sent the letter to Ed kooch on May 28th 1986 he wrote me a response by return mail somewhat to my surprise he belittled my offer the city wasn't about to let me operate the rink he said but they'd be delighted if I donate the $3 million to rebuild it and supervise the construction he made a few more sarcastic comments and ended by saying with baited breath I await

your Response the tone of the mayor's letter irritated me fortunately I wasn't the only one who was put off by it and I have Coke himself to thank for that I hadn't released my letter to the Press because I didn't want to be accused of grandstanding kooch however decided to release his letter apparently he figured that if he made fun of my offer publicly I'd just quietly slink away he totally underestimated the Press reaction first the Press thrives on Confrontation they also love stories about extremes whether they're great successes or terrible failures this story had

it all perhaps most important many reporters tend to see themselves as consumer Advocates almost nothing gets them as outraged as a boondoggle that victimizes average citizens the city's Fiasco at the wman rink was an absolute classic even I was surprised at how totally the Press took my side obviously That does always happen but this time within three days there were dozens of Articles and editorials attacking Coke for his reaction to my offer the coke Administration said the Daily News in an editorial is hemming and hawing over Donald Trump's offer to rebuild and operate wolman rink

in Central Park why the offer is genuine with no apparent strings attached Coke should grab it and heave a sigh of relief that a long running costly disaster is off his hands So far the mayor has raised a lot of phony objections maybe the problem is that coach and an po company are embarrassed that they've squandered $12 million on wman Trump is offering to take over the wman project to rebuild the rink and to have it opened by November at no cost to the city wrote the New York Post after the whole 13-year multi-million dollar

debacle you would think that they'd be jumping for joy not so City officials seem more Interested interested in thinking up reasons not to go forward than in making a deal the city should give Donald Trump a speedy hearing the wman farce has been running long enough let him have a go at it said Newsday after all the city has proved nothing except that it can't get the job done if there's one thing I've learned from dealing with politicians over the years it's that the only thing guaranteed to force them into action is The press or

more specifically fear of the press you can apply all kinds of pressure make all sorts of pleas and threats contribute large sums of money to their campaigns and generally it gets you nothing but raise the possibility of bad press even in an obscure publication and most politicians will jump bad press translates into potential lost votes and if a politician loses enough votes he won't get Reelected if that happens he might have to go out and take a 9-to-5 job that's the last thing most politicians want to do what you have to understand about Ed KO

is that he's a bully pure and simple bullies may act tough but they're really closet cowards the only people bullies push around are the ones they know they can beat confront a strong competent person and he'll fight back harder than ever confront a bully and in most cases he'll fold like a deck of cards sure Enough the tide turned overnight no sooner did the Press jump on Ko's case then he reversed field completely suddenly the city was virtually begging me to take on the wman rink job on June 6th I sat down in my office

with City officials including Henry Stern to negotiate the terms under which I'd rebuild the wolman rink until then the city had insisted on competitive bidding as is required on any City Finance construction job I suggested a Simple Solution I'd put up all of the money for the construction of the rink myself in turn I'd be reimbursed over as many years as it took from any profits the rink earned in other words I'd not only supervise construction I'd also lend the city $3 million for an indeterminate period and forever if the rink didn't prove profitable the

city in its Infinite Wisdom balked there's no way we're going to Allow that City officials told me there's no way we're going to allow you to make a profit on the rink no you you don't understand I said if the rink does make money I'll use it to reduce my loan I'm not looking for personal profit in fact if I ever do get my money back I'll give any subsequent profits to charity to my astonishment and to the astonishment of my own lawyers the city wouldn't budge instead they came up with a counterproposal I'd Still

put up the $3 million as a way of getting around the competitive bidding issue but on the day I finished the city would reimburse me in full it's fortunate for those City officials that they chose to go into city government rather than business the deal they were suggesting was far worse for the city than the one I'd originally offered I wasn't about to fight them at my own expense by the end of the day on Friday June 6th 10 days after my original offer We came to an agreement subject to final approval by the city's

Board of estimate I'd put up the construction money and agree to complete the work by December 15th at that point the city would reimburse me for my costs up to a cap of just less than $3 million but only if the rink worked if I came in under budget the city would pay me back only what I'd spent if I went over budget I'd cover the overruns myself that much the city was graciously willing to let me do I had just one challenge left building the skating rink fast and building it right if I failed

if I was even one day late or $1 over budget my plan was to pack my bags and take the next plane to Argentina there was no way Ed coach or anyone else would ever let me live it down since I myself knew absolutely nothing about building rinks I set out to find the best skating rink Builder I could logic suggested that the best place to look was Canada ice skating is to Canadians what base ball is to Americans the national Pastime the top Builders I figured were probably the companies that built rinks for Canada's

professional hockey teams sure enough everyone I talked with agreed that a company called Simco based in Toronto was the best of the best among other projects they built a rink for the Montreal Canadians I got their top guy on the phone and I began with a very basic question what does it take to Build a great outdoor skating rink he gave me a very quick course in rink construction the key Choice he said was which ice making system to use the city had originally decided to use a relatively new technology in which the freezing agent

is free on the rationale was that a freeon system requires less electricity which translates into some minor energy cost savings the disadvantage of the freon system is that it's far more delicate temperamental and Difficult to maintain particularly in a public facility where Personnel turns over frequently among ice skating facilities that use the freon system my friend from Simco told me at least onethird had experienced problems the other option which had been used in hundreds of skating rinks for decades was a brine system in which salt water is circulated through the pipes it costs a little

more to run than a Freon system but the advantage is that it's highly Reliable and Incredibly durable the Rockefeller Center skating rink is used a brine System since it opened in 1936 and has never experienced a major problem by the time I finished my first call I'd made up my mind to use a a brine system in rebuilding the wman rink the city in fact had finally come to the same conclusion the only difference was that they first wasted six years and millions of dollars I soon discovered that the city's incompetence On the wman rink

project had extended to every imaginable detail large and small on June 16th one week after I'd made my deal to take over rebuilding the rink a city report was released on mistakes made at the wman rink over the past six years the study had taken 15 months to complete four times what I'd given myself to totally rebuild the rink worse yet while the report provided endless examples of incompetence it came to absolutely no conclusions about who was Responsible for the Fiasco and what could be done to avoid such failures in the future the one thing

the report did provide was an astounding chronology of sloppiness indecision incompetence and sheer stupidity if it weren't so pathetic it would have been almost comical the city first closed the rink for renovations in June 1980 by the time plans had been drawn and the bidding process completed almost A year had passed in March 1981 work finally began on installing approximately 22 miles of the very delicate expensive copper piping used in a freeon cooling system in the meantime however the parks department had second thoughts about where to locate the compressor room and what sort of refrigeration

equipment to use even as the piping was being installed all work was halted on the Equipment that would eventually be needed to operate the rink's cooling system even if the ice making equipment had been finished and installed the design of the rink was such that it never had a chance of working specifically the base of the rink was designed on a pitch so that it was approximately 8 inches higher at one end than at the other the pitch had a purpose the fact that it ended up being 11 Ines was an accident the point of

the Pitch was that during the summer the city hoped to use the rink as a reflecting Pond and apparently a pond reflects light better if its base is sloped in the winter however that same sloped base would cause a problem it doesn't take a genius to realize that when you try to make ice under those circumstances there are only two possibilities the better one is that ice will form but that because the depth of The water varies the consistency of the ice won't be uniform the worse and far more likely result is that the water

at the deeper end of the rink simply won't freeze at all no matter how powerful the ice making Machinery even that issue soon became secondary in July two months after the laying of the pipes began a torrential rain flooded the rink depositing a thick layer of silt on the newly laid pipes it wasn't until September that the parks Department finally got around to hiring a crew to repair the damage in the meantime a new dispute had emerged within the parks department about how the concrete sidewalk surrounding the rink should be designed the result was that

the pouring of all concrete including the concrete meant to form the rink's base was held up nine months while a debate over the sidewalk raged on so unfortunately did winter for nine months the newly laid delicate copper Pipes were exposed to horrible weather there were major snowstorms and flooding in addition because copper is quite valuable vandals climbed over the fences and tried to cut off pieces of the pipe to resell by the spring it was as if those 22 miles of pipes had been through a war nonetheless not one person thought to check them for

possible damage in June of 1982 two years after the rink was first closed the concrete Was finally poured over the untested copper pipes contractors often use a vibrating machine when they pour over uneven surfaces since it help helps prevent bubbles from forming however the vibrating had an unforeseen result it began shaking loose the joints of the copper pipes at the same time the contractor had even bigger problems to contend with he had underestimated by a great deal how much concrete it would take to cover the rink The key to pouring concrete is to do it

all at once on a continuous basis because that's the only way to ensure it will adhere and mesh uniformly rather than interrupt his before the contractor decided to dilute his concrete mixture with water it was a recipe for disaster less than a week went by before cracks began appearing on the surface of the newly poured gear concrete slab not coincidentally the cracks were Concentrated at the end of the rink where the cement content had been diluted and where the vibrating machine had been turned off delays in deciding where to locate the refrigeration equipment prompted another

problem by the time the city made its decision after 16 months of deliberations the contractor originally hired to install the equipment insisted on a modification of his original agreement specifically he demanded more Money those negotiations took another 12 months and it wasn't until July 1983 that the city approved a new contract on the contractor's terms the completion date on installation of the refrigeration equipment was pushed forward yet again to September 1984 in the late fall of 1984 the system was finally tested for the first time it proved unable to sustain pressure for long enough to

create ice because it turned out that there were leaks in the Pipes beneath the concrete slab between October and December of 1984 six leaks were found and repaired no luck the system was tested again and still couldn't make ice it was at that point that I called Henry Stern and made my first offer to take over construction of the rink when he turned me down I said listen would you like to walk over together and take a look and perhaps I can at least make some Suggestions a few days later in the dead of winter

we walked over to the rink I was shocked by what I saw there were literally hundreds of tiny cracks in the concrete slab worse than that there were at least a dozen huge gaping holes cut into the slab at various places when I inquired I found out that the holes had been cut through the concrete in order to get at the leaks in the pipes underneath unfortunately the jackhammers used to make holes in Concrete are very violent and the pipes underneath are very delicate in the effort to get at the leaking pipes these Violent Men

with their violent jackhammers actually made the problem much worse right then and there I turned to stern and said you have a major problem you'll never find these leaks in the meantime you'll just create bigger leaks forget it start all over Henry tried to be polite but it was clear that starting over was the last Thing he'd consider in the spring of 1985 the city came up with a wonderful new idea at a cost of $200,000 they hired an outside engineering consultant to study why Freon was leaking from the pipes and to recommend Solutions The

Firm promised to have its report within 4 months 9 months later in December 1985 The Firm announced that they'd been unable to isolate the cause of the leaks nearly Six years had now passed since the wman rink was first closed for renovations nearly 13 million had been spent the parks department finally concluded that the freon system would have to be scrapped and replaced by a brine system on May 21st 1986 they announced the new 3 million renovation plan and the 18-month timetable that was when I finally convinced the city to let me take over by

mid June when the board of Estimate approved the deal IID negotiated with the city I had already begun work one thing I discovered was that the city had agreed to pay a $150,000 fee to yet another consulting company this time to provide recommendations about how to build the rink with a brine system the city's contract specified that the company St H Ruff associates also known as Sora would begin work on July 1st 1986 and deliver its report by the end Of December in other words I had agreed to finish rebuilding the rink before the city

was scheduled to get the report on how it ought to be done on the off chance that the Consultants might have some intelligent suggestions I decided to sit down with them I probably shouldn't have been surprised by what I discovered the two gentlemen who ran the firm were specialists in refrigeration but had never before been involved in building a skating rink they hadn't the Faintest idea what it entailed so much for their help I hired Simco to build the refrigeration and piping equipment for the system and to advise me generally to build the rink itself

I hired hrh the construction company that had already built the Hyatt and Trump Tower for me and had proved themselves high quality general contractors in this case they generously offered to do the work at Cost meanwhile Chase Manhattan with whom I had a long banking relationship stepped forward and offered to lend all the money for construction again at no profit it was the sort of project everyone could relate to and appreciate when I went to see the rink things were even worse than I'd imagined for example there were gaping holes in the roof of the

skater's house and the result had been massive water damage to the interior of the building but even the smaller things I Noticed reflected the city's approach to the job for example as I walked into the rink I Came Upon a row of canvas sacks abandoned and half covered by weeds when I looked inside I discovered that the sacks were filled with plants which were once intended to be part of the new Landscaping instead they'd been left on the ground un opened and had died just as I was making this discovery a city worker walked by

and stepped right on one of the few living plants on the site He didn't look back in a way it was a perfect metaphor the rink being trampled by one of the people who was being paid to fix it the incident reminded me of a Time several years earlier when I was walking by the rink on a beautiful summer day it was about 2: in the afternoon and there right in the middle of the unfinished rink were per perhaps 30 laborers not one of them was working I figured they were on coffee break perhaps an

hour later I walked past the Rink again the same men were there in exactly the same positions as if they were on a permanent Siesta I didn't fully realize the implications of the scene at the time now I saw it as a symptom of the bigger problem at wolman rink there was absolutely no one in charge leadership is perhaps the key to to getting any job done there wasn't a single day when I didn't check on the progress we were making on the rink most days I visited The site personally I'd given myself six months

to finish and based on the city's record meeting that deadline would be a minor miracle by my own calculations however six months actually left me a cushion of a month in case anything significant did go wrong if absolutely everything went right I felt it was possible we'd finish the job in four months one of the first decisions we made was to build The New Rink on top of the old One rather than rip it out all together by the 1 of August we were able to lay a level subbase for The New Rink on top

of which we would install the piping and pour the concrete the Simco was busy building two huge 35,000 pound Refrigeration units I hadn't realized when I offered to take on the job how big bman rink actually is at nearly 3/4 of an acre it is one of the largest man-made skating rinks in the Country even before we began construction we were besieged by calls from the Press seeking uh progress reports reporters who normally had no interest whatsoever in construction suddenly wanted to know the smallest details about the laying of pipe the pouring of concrete and

the building of a compressor room after the first dozen or so calls I decided to hold a press conference to answer everyone's questions in a single Forum on August 7th with only the subfloor in place we met the Press at the rink to my surprise perhaps three dozen reporters photographers and cameramen showed up including representatives from every local television station and both wire Services I had no earthshaking news to announce all I could report was that everything was proceeding right on schedule and that we expected to be open by December that was enough the next

day There were stories in every newspaper with headlines like Trump has an ice surprise for skaters and Trump puts the icing on wman cake there were those who said I went a little overboard holding press conferences about wolman rink perhaps they're right but I can only say that the Press couldn't get enough of this story at least a dozen reporters showed up for every press conference we held nor did the story of the rink generate Just local attention dozens of newspapers as far away as Miami Detroit and Los Angeles ran long pieces about the woolman

rink Saga Time Magazine devoted a full page in its Nation section to the story it was a simple accessible drama about the contrast between governmental incompetence and the power of effective private Enterprise from September 7th through 10 we laid 22 miles of pipes on September 11th a convoy of cement trucks arrived And we began a continuous pour that lasted 10 hours there was no shortage of cement the next day when the engineers checked to see how evenly the poure had turned out it was perfectly level on September 15th the newly built Refrigeration equipment was installed

in the renovated compressor room the only obstacle left was the Heat on the day we poured the concrete the temperature climbed to 87° it occurred to me that we were going To be ready for skaters before the weather was ready for us by the end of September all of our ice making equipment was in place all we needed to test our system was a succession of four days during which the temperature stayed below 55 degrees instead for two weeks one beautiful un seasonably warm day followed another for the first time in my life I found

myself wishing for winter finally on October 12th the temperature dropped below 55 and it Stayed down for several days on October 15th we conducted our first test of the new system sending brine through the piping there were no leaks and the pressure held that night following a rainfall ice formed on the rink beautiful clear long- awaited ice it was almost four months to the day since I'd gotten approval to renovate the rink we' also managed to come in more than seven $150,000 under our $3 million budget with the city's Blessing we used the leftover money

to renovate the adjacent skate house and restaurant during most of the construction the city stayed out of our way in large part because I instructed my men to keep Park officials off the site when they did try to interfere it invariably turned into disaster as an example after we'd finished the rink a crew from the parks department showed up cting a small tree which they Announced the city wanted to plant in my honor it wasn't enough for one or two guys to handle the job a a crew of perhaps a half dozen men came among

them a Parky culturist to supervise the job the tree itself was transported in a tractor with a backhole loader by total coincidence I walked up to the rink just as the men were beginning to plant the tree it happened to be one of the ugly scrawniest little trees you're ever Likely to see I could have lived with that what got me absolutely nuts was the way they were planting the tree just the previous day we' planted beautiful specimen sod all around the perimeter of the rink it had rained the night before and the ground under

the newly planted grass was soft what do these men do but drive their tractor right over the new grass completely trampling it in a matter of minutes these six men most of whom weren't needed in the first place Managed to totally destroy a beautiful planting job that had taken two days to complete and now would require three months to grow back in around this time I got a letter from Gordon Davis the parks commissioner before Henry Stern Davis wrote to say that as the person primarily responsible for the early problems at the rink he was

delighted and relieved to see how superbly his mistakes had been corrected I happen to believe that Davis was far from the only Person responsible but what struck me most about his gracious attitude was how radically it contrasted with that of Henry Stern throughout the wolman project Stern took numerous opportunities to minimize to reporters what we were accomplishing the uh Daily News noting one particularly snide comment Stern made snapped back in an editorial shot us so try saying thanks Henry they wrote it's more dignified under the circumstances coach himself Was not exactly effusive about what we'd

accomplished again I think the media may have been a factor in October all the local newspapers ran stories that surely must have made him a little defensive the times for example ran a lead editorial that began New York City bungled the job of reopening wolman skating rank for six years wasting millions and ended by saying the lessons of the wman rink ought not to be forgotten whenever they were asked both Koch and Stern told reporters that after the job was done the city intended to meet with me and my people to see whether the lessons

of woolman rink could be applyed to other City projects if I heard them make that statement once I must have heard it a dozen times including in several speeches on November 13 the day we officially open the rink to the public I've yet to get a call from any City official seeking a meeting I can't Honestly say I'm surprised the bad press has died down and that's all any of them were really concerned about still I believe there are some lessons the city could take away from what we accomplished at wolman rink at one point

kooch offered his own explanation for why we were able to do what the city could not Trump put in a cushion Coke said and then he was able to reduce it by working as hard as he could Within Elite crew who knew that if they screwed Up the job they would never work for Donald Trump again that explanation wasn't totally wrong what kooch didn't understand is that the city could have done some of the very same things I did I'm not suggesting they would have been able to complete the job in five months as I

did or even in six months but there is no conceivable excuse for not completing it in a year much less for failing for six years that's incompetence plain and simple and Incompetence was at the heart of this whole sad Saga City officials invariably cite two reasons why they can't move as quickly as private developers the first is that by law the city must award any contract to the lowest bidder regardless of whether that person is best qualified to do the work there is at least a partial solution objective qualifying standards ought to be adopted for

any bidder on a city job provable performance for Example should be required across the board in addition any contractor who does good work for the city coming in on time and on budget ought to be given priority on future city jobs again I think the media may have been a factor in October all the local newspapers ran stories that surely must have made him a little defensive the times for example ran a lead editorial that began New York City bungled the job of reopening Wilman skating rink for six years wasting Millions and ended by saying

the lessons of the wman rink ought not to be forgotten whenever they were asked both Koch and Stern told reporters that after the job was done the city intended to meet with me and my people to see whether the lessons of woolman rink could be apply to other City projects if I heard them make that statement once I must have heard it a doz dozen times including in several speeches on November 13 the day we officially opened The rink to the public I've yet to get a call from any City official seeking a meeting I

can't honestly say I'm surprised the bad press has died down and that's all any of them were really concerned about still I believe there are some lessons the city could take away from what we accomplished at wolman rink at one point kooch offered his own explanation for why we were able to do what the city could not Trump put in a cushion cach Said and then he was able to reduce it by working as hard as he could with an elite crew who knew that if they screwed up the job they would never work for

Donald Trump again that explanation wasn't totally wrong what kooch didn't understand is that the city could have done some of the very same things I did I'm not suggesting they would have been able to complete the job in five months as I did or even in six months but there is no conceivable excuse for not Completing it in a year much less for failing for six years that's incompetence plain and simple and incompetence was at the heart of this whole sad Saga City officials invariably cite two reasons why they can't move as quickly as private

developers the first is that by law the city must award any contract to the lowest bidder regardless of whether that person is best qualified to do the work there is at least at least a Partial solution objective qualifying standards ought to be adopted for any bidder on a city job provable past performance for example should be required across the board in addition any contractor who does good work for the city coming in on time and on budget ought to be given priority on future city jobs the other disadvantaged City officials site is the so-called Wix

law it requires that on any public Construction job budgeted over $50,000 the work must be divided among at least four separate contractors the law was designed to increase competition and reduce building costs but it does just the opposite no single general contractor is permitted to have overall responsibility and the result is frequent delays disputes and overruns I don't deny that these laws put a crimp on the city but I believe a far bigger problem is leadership I know From my own experience that the only way to get even the best contractor to finish a job

on time and on budget is to lean on him very very hard you can get any job done through sheer force of will and by knowing what you're talking about as it is now a contractor will come in and say to a city official I'm sorry but we've run into this problem and we're going to need another one million or $2 million to finish the job no one argues back because virtually no One in city government knows anything about construction worst of all no one in the city government bureaucracy is held accountable for failure I'll

give you what I consider the classic example back in 1984 by which time the city had already spent four years trying to rebuild wman rink a man named Bronson Binger held a press conference at the time Binger title was assistant Parks commissioner and his primary responsibility was the renovation of Wolman rink Binger made a bold confident announcement to the reporters who showed up if the woolman isn't ready to reopen in time for next season he told them then he'd resign his job a year passed the rink obviously didn't reopen and Binger was true to his

word he resigned there was just one catch a short time later he was named Deputy Commissioner in charge of prison Construction for the state of New York uh I don't know much about building prisons but one thing is certain renovating ice rinks is a lot easier you don't reward failure by promoting those responsible for it because all you'll get is more failure the one group that does benefit from the city's incompetence are the contractors who do the work when a subway project or a new highway or a bridge goes over budget by millions of dollars

contractors clean up You won't read the names of these people on the Forbes 400 and they may not all speak perfect English English but I'll guarantee you this many of them have become immensely wealthy working for New York City they earn vast sums from huge unwarranted cost overruns that City officials approve and taxpayers underwrite the gala opening celebration for the rink was produced by former skating Champions dick button and AA zenova steindler they managed to bring Together for one show most of the world's best skaters Peggy Fleming Dorothy Hamill Scott Hamilton Debbie Thomas Robin cousin

Toler Cranston the teams of tville and Dean and Bloomberg and sabert and others it was a great occasion had the city then turned over the finished rink to a second rate operator this story might still have a bad ending but because Normal competitive bidding would have led to a new delay in opening the rink the city Asked me to operate the rink on a temporary basis for the first season again I just looked for the best rink managers available the answer I came up with was Ice capades besides doing great Ice shows ice capades operate

some of the best rinks in the country they've done an impeccable job with wolman rink it's not only beautifully run it's been highly successful during the 1970s when the rink was still open and run by the city It earned an average gross of approximately $100,000 a year and never took in more than $150,000 although we charged price prices below those of any private City rank $450 a session for adults $250 for children we earned 1.2 million in revenues during our first season profits exceeded $500,000 after expenses and all of it went to charity and the

parks department but equally important more than a half Million skaters enjoyed the wman rink even now as I write this in the spring of 1987 I get a real kick every time I look out the window of my living room room in Trump Tower and see hundreds of skaters on the Wallman rink however I won't be one of them people have been waiting for years to watch me fall but I'm not about to help the cause skating isn't my strong suit chapter 13 comeback a Westside Story the toughest business decision I Ever made was giving

up my option on the West Side yards 78 Riverfront Acres between 59th Street and 72nd Street in the summer of 1979 the easiest business decision I ever made was buying back those same 100 acres in January 1985 I have a tendency to get very enthusiastic about any deal I make but I suspect few people would argue that those 100 acres represent the single best undeveloped piece of property in America today it has been reported that I paid $95 million for the Westside yards or about $1 million an acre which is not far from the correct

figure taking the time value of money into account I paid less to purchase the site in 1985 than I would have if I'd exercised my option to buy them in 1979 during the intervening years the price of most Manhattan real estate increased as much as five times even before I put up a single building I'm Certain I could sell the property at a very substantial profit and I've turned down numerous offers already consider just one comparison very shortly after I bought the Westside yards another group of developers paid approximately $500 million for the Columbus Circle

Coliseum site a tiny property by comparison and just four blocks away I got the yards at a great price because a bank was foreclosing on a desperate seller because I made the Deal before the property was offered for sale on the open market and because I was one of the few developers both willing and able to pay millions of dollars a year in carrying costs for as long as it took to get the yards developed securing the option to purchase the wests side yards from the Penn Central Railroad back in 1974 was the first major

deal I made in Manhattan at the time as I've said the city was on the verge of bankruptcy and The west side was hardly considered a great place to live but I had a simple conviction I couldn't go very wrong buying spectacular riverfront property in the middle of Manhattan at a Bargain Basement price over the next 5 years however government subsidies dried up for the kind of middle inome housing I was proposing Community opposition to any development on the West Side reached a fever pitch and Banks remained reluctant to finance any large-scale Developments perhaps most

important I was launching other projects among them the Commodore Hyatt Trump Tower and my first Atlantic City casino nor was I eager to load myself down with huge carrying cost while my personal resources were still very limited by devoting myself to other deals instead I generated a cash flow large enough to support the carrying costs on virtually any project I also built a record of success That made Banks happy to lend me money for nearly any deal shortly after I gave up my original option in 1979 the Penn Central sold the Westside yards to my

friend Abe herfeld very quick Abe went out and got himself a partner on the deal Francisco MRE became wealthy in the 1960s Building Bridges for the government in his native Argentina under the deal with herfeld McCree agreed to take over the job totally herfeld retained a substantial Percentage of profits but no ongoing role in the project mree in turn gave the job of overseeing the project dayto Day to a man named Carlos varsavsky a former physics Prof Professor who'd been running mccree's Argentinian company ba Capital the McCree team had plenty of brain power what they

lacked was practical experience especially in New York City where it is so difficult to do any sort of real estate development the first key To developing any huge Manhattan site is getting the necessary approvals to build a job that is economically viable rezoning is a complex highly political and very timeconsuming process that ultimately in involves a dozen city and state agencies as well as local community groups and politicians MRE did finally manage to get his Zoning for the project he named Lincoln West but in the process he made far too many concessions to the city

being forced to sell out may Have been the best thing that ever happened to him if Macker had ever tried to build the project under the terms to which he'd agreed he would have lost hundreds of millions of dollars it was sad in a way because Franco is a wonderful and well-meaning man but he made a critical misjudgment from the start he assumed that in a project as big as the Westside yards he could afford to absorb nearly any costs and still end up with a huge profit the Truth is that unless you design a

project to be self-supporting as you build it you risk getting eaten alive before you've turned the corner into profit one of Mack's problems was that he tried to apply the principles of bridge building to a residential development when you build a bridge under contract to the government you calculate the cost and sign a contract for a set amount all you need to do to earn a profit is bring the project in on Budget in developing real estate it's a whole different ball game you can budget building costs but you can't truly project revenues because you're

always at the mercy of the market the variables include how much you get per unit how long it takes to sell out and what your carrying costs are along the way the less you commit to spend upfront the less you're at risk later instead Macky spent three years mostly in the business of giveaways the city eager to get all It could in return for approving the project asked MRE for concession after concession Macky began by agreeing to provide $30 million to refurbish the 72nd Street subway station nearest to the project even though the projected renovation

amounted to little more than widening a single platform by 4T for $30 million ought to be able to totally rebuild a station next Macker threw in a $5 million pledge for a Railroad Flat Car operation in the South Bronx to Replace the one he'd be eliminating in the west side yards then he promised to chip in $30 million for a public park within his development later he agreed to build a new public through Street connecting with the existing City grid a job that would have surely cost tens of millions of dollars when Conan Edison asked

Ma to underwrite the cost of rebuilding a smoke stack the company owned on the site he even agreed to that this I found particularly Preposterous Con Edison already gets one of the highest utility rates in the country when I met McCree I asked him why he'd agreed to do anything for conid wasn't it enough I asked that over the years he was going to be buying billions of dollars worth of electricity from them they told me they were going to oppose my project Macker explained and any anyway what's the big deal how much can a

smoke stack cost suddenly I understood Franco Macker hadn't bothered To check but I did to put a needle 500 feet into the air it turns out costs nearly as much as putting up a building it could run to 30 or even $40 million I told McCree he still didn't seem phased by the time he'd finished being generous to anyone who asked Marcy had committed more than $100 million in give ways worse yet he'd agreed to pay in full for much of it before he' erected any buildings much less sold a single apartment equally bad was

the zoning to Which Macker finally agreed by the time the process was finished he'd been negotiated down to less than 4,300 residential units on his 100 Acre Site a density lower than you find in some six-story apartment complexes in the suburbs more specifically McCree agreed to build just 850 units in the most valuable part of his site 68th Street to 72nd Street which was adjacent to an existing residential neighborhood the great majority of his Apartments he Agreed to put in the undeveloped industrial southern end of the site where the residential Market remained totally untested anti-development

forces on the upper west side barely had to fight with McCree he became His Own Worst Enemy the last major mistake McCree made was that he never set out to create any excitement about his Lincoln West project during the four years when he owned this terrific piece of property Virtually not a word was written about it even the name Lincoln West implied that despite the fact that this represented one of the largest and potentially most important developments in the United States it was merely a job located west of Lincoln Center an average 150 unit luxury

high-rise building in New York takes two years to sell out and that assumes a strong market and good promotion to sell literally thousands of Units in a new development requires that you have both something unique to sell and a very aggressive approach to selling it McCree had neither the Lincoln West development he had proposed two dozen relatively short brick buildings was as Bland and uninspiring as any of a dozen public housing projects that were thrown up around Manhattan during the 1960s it was scarcely surprising that not one of at least a dozen Banks McCree called

on Over three years was willing to lend him money for his construction even though Banks were practically throwing money at dozens of other New York City developments by late 1983 McCree also had personal cash problems the war in the fauland Apparently had hurt his business interests in Argentina by this point accounting outlays for architectural staff environmental impact studies and carrying costs Macker was probably into Lincoln West for more than $100 million caught in a crunch he began defaulting on the original loan he'd taken from Chase Manhattan to purchase the land in the spring of 1984

I got a call from ABE hersfeld he told me that MRE was in trouble and was interested in selling I went to see mree and we began a long negotiation he was eager to get out with a profit at the same time the bank was breathing down his neck sure enough in November we finally agreed to an all cash price of approximately $100 million and Chase agreed to finance a good part of the transaction one of the reasons Franco mree agreed to sell to me I'm convinced is that I'd done him a favor long before

we finally made a deal shortly after our first meeting in early 1984 we agreed on the term terms of a tentative deal under which maer would sell me the project he wasn't yet Certain that he wanted to sell but he was willing to consider signing at least a letter of intent one of the first things that anyone should learn about real estate and New York real estate in particular is never to sign a letter of intent years can be spent in court trying to get out of a seemingly simple and non-binding agreement MRE did not

fully realize this and in addition my lawyer Jerry shreer draft a letter of intent That was significantly more binding than most it was with an eye to getting this letter signed that Jerry and I sat down in mid1 1984 in a extraordinary apartment at the Sherry Netherland hotel along with macry his young son and a beautiful interpreter named Christina she was a true Latin Beauty and all of us were somewhat distracted I'll never forget Christina's stopping in the middle of translating a complex legal point in Saying to Macker you really should get a lawyer to

help you understand the meaning of this document it's very complicated no no Christina he said as long as I can get out of it it's not so important and he went ahead and signed as it turned out McCree retained his dream of proceeding with the project and several months later he called and asked me to let him resend his letter of intent I declined but he asked if we could meet and I agreed McCree explained That the project was killing him but that he desperately wanted to make one last effort to get his financing and

move forward I couldn't help feeling sympathetic having spent years myself working to launch difficult projects I also appreciated his openness I took the letter of intent out of a folder and tore it into two in front of Macker and then I said to him if you should ever again decide to sell I hope you'll think of me first in the meantime Good luck when I told shreer what i' done he wasn't happy but to this day I'm convinced that my ripping up that letter which may or may not have been binding is the reason that

MRE did come back to me instead of going to any of a dozen other potential biders when it finally became clear that he couldn't get his financing after all even before I signed the purchase papers in January 1985 I had the basic elements of my plan in mind I intended to build many fewer Buildings than McCree and all along a single block views were the site's single strongest selling point and I wanted every apartment to have unobstructed views either of the Hudson River to the West the extraordinary cityscape to the east or both I also

intended to build much taller buildings than MRE had planned to take full advantage of the views and also because I believe tall buildings would make the project more Majestic and alluring I Also envisioned a huge retail shopping prominade on the ground level along the riverfront in front of the buildings what the Upper West Side of Manhattan needs more than anything else I believe is basic shopping Services large supermarkets shoe stores pharmacies and hardware stores rents along Broadway Amsterdam Avenue and Columbus Avenue have gotten so high that small shopkeepers have been driven out it's easier today

to find a100 pair of Leather gloves on Columbus Revenue than a loaf of bread one advantage of my lowland cost is that I will be able to charge more reasonable rents to retail tenants my plans were contingent of course on what sort of zoning I could get I didn't have to undertake complex cost analyses to know that the only way to make the project feasible was to get approval for many more units and total square feet of buildable space than MRE got unlike Macker I was prepared to hold Out for as long as it took

even into another city Administration if necessary to win approval for a plan I believe can be economically workable my first goal was to put as much distance as possible between mccree's approved project and my own vision for the site any link to his project could only hurt me at the time he sold to me McCree had yet to sign any formal contract with the city and the city had yet to issue him a final building permit I was under no Obligation therefore to deliver on his many promises starting the process over from scratch meant I'd

have to spend much more time and money but I felt there was no other choice my first critical challenge was to make the project exciting and attractive to the city so that they'd be inclined to give me the zoning approvals I needed the key was to find a mutual interest deals work best when each side gets something it wants from the other by luck I picked up The newspaper one morning soon after purchasing the site and the answer came to me it turned out that NBC which had long had headquarters in Rockefeller Center was looking

to relocate Edward S Gordon a top New York real estate broker then confirmed this to me among the possibilities NBC had in mind was a move across the river to New Jersey where they stood to save considerable money by virtue of that State's lower taxes And land costs for the city to lose any large company is obviously bad but there could hardly be a worse blow than losing NBC pure economics are part of the issue the city's Economic Development agency has estimated that if NBC moves it will cost New York some 4,000 jobs and perhaps

$500 million a year in revenues the psychological loss would be at least as great it's one thing to lose a Manufacturing Company no one has ever Heard of it's another to lose a company that is a crucial part of what makes New York the media capital of the world the two other networks ABC and CBS now produce nearly all their programs in Los Angeles NBC still does the Today Show the NBC Nightly News Late Night with David Letterman The Cosby Show Saturday Night Live and other shows from New York you can't put a specific value

on the excitement and glamor of being home to the number one network and its Top rated shows it's like trying to assess what New York would be like without the Empire State Building or the Statue of Liberty with the Westside yards I had something to offer NBC that no other New York developer could possibly match enough space to build huge singl story studios in the style of Hollywood backlots NBC was making due at Rockefeller Center with a cramped 1.2 million square fet of space on my site I Could offer them 2 million square feet as

well as room for future expansion and I'd still have plenty of room left over to build the rest of the project I had in mind in addition because my land cost had been so low I was in a position to offer NBC uh a price per square foot far below what they might otherwise get in New York even at that to be truly competitive with a New Jersey offer I knew I'd need a tax abatement from the city But I also knew that it was in the city's economic interest to provide incentives for NBC to

stay the more I thought about it the better I like the idea even if NBC ultimately decided not to move to my site it was still a perfect place to build television and motion picture studios with or without NBC I felt Studios would be a good high-profile business before I got a commitment from the network I decided to design my project around the studio Concept the first step was the name television City my second challenge was to find a way to immediately capture the public imagination with my project the more awareness and excitement I could

create early on the easier it was going to be to attract buyers down the line a lot of developers build first and promote later if at all the world's tallest building was a project I'd considered undertaking even before I purchased the Westside yards I've always Loved very tall buildings I remember coming in from Brooklyn as a kid with my father and pleading with him to take us to see the Empire State Building which at the time was the world's tallest building but then Chicago built the Sears Tower and took away the tide I loved the

challenge of bringing the world's tallest building back to New York where I felt it really belonged in a way I saw the building as a loss leader when you build any structure Higher than about 50 Stories the construction cost escalate geometrically if maximum profit is your sole motive you're far better off putting up 350 story Towers than one 150 story skyscraper on the other hand I felt the building would ultimately pay for itself as a tourist attraction and an overall lure after all how many millions of tourists have come as I once did to see

the Empire State Building the next challenge was to find an architect who was as enthusiastic as I was about making such a building the centerpiece of this project in the end I interviewed only two architects the first was Richard Meyer who represents the epitome of the New York architectural establishment critics adore Meyer and he has a big following but what I discovered very quickly is that Meyer is not the sort of guy who jumps in with great energy and Enthusiasm he prefers to spend time pondering and analyzing and theorizing for weeks I waited for him

to bring me a scale model of a plan or at least some preliminary drawing nothing came in the meantime I also met with hmut John I liked him for very different reasons than I liked Meer John was an outsider German born Chicago based in no way part of the New York architectural establishment he was a bit of a Dandy personally a very good Promoter and he'd gotten very good notices for some very daring work among other things John designed the Xerox Center in downtown Chicago and the high-tech state of Illinois building at the time I

talked with him he had four major buildings underway in Midtown Manhattan what I liked most about helmet was that he believed as I did that big can be beautiful he liked spectacle less than three weeks after we first talked he arrived in my office With a scale model of a project that incorporated the basic elements I told him I wanted as as well as several of his own in the summer of 1985 I hired John to be the Project's Chief Architect by the Fall we batted back and forth a dozen possible designs for the site

both of us felt that the site was so big and so distinctive that it made no sense to try to create something that blended into the surrounding Community instead we saw this as a chance to build A self-contained city with a look and a character wholly distinct from the disperate surrounding neighborhoods on November 18th we held a press conference to announce our plan for the site for years while McRee pursued his Lincoln West plan the media had ignored him this time no fewer than 50 reporters local and National showed up for our announcement I ran

down the basic elements we were calling it television City and we hoped to lure NBC as our Prime tenant we intended to build a mixed use development totaling 18.5 million square fet of commercial residential and retail space the project would include approximately 8,000 residential units 3.5 million square fet of TV and motion picture studios and offices 1.7 million square fet of retail space 8,500 parking spaces and almost 40 acres of parks and open space including a 13 block Waterfront prominade at the center of the site we Direct the world's tallest building 1,670 ft high or

about 200 ft higher than the Sears Tower in Chicago to me the beauty of the plan was its Simplicity and its Grandeur in addition to the world's tallest building we' put up just seven other buildings three at the North End four at the South a decked over three level platform in front of the buildings including parking and enclosed shopping would permit us to put a pedestrian Prominade on top at a level slightly higher than the adjacent Westside Highway the result would be to provide an unimpeded view of the River from virtually any spot on the

site we'd also have enormous space for parks in all our proposal was about 50% bigger than mccree's but even at that the overall density was lower than that of many smaller developments squeezed onto tiny Midtown sites most reporters I find have Very little interest in exploring the substance of a detailed proposal for development they look instead for The Sensational angle in this case that may have worked to my advantage I was prepared for questions about density and traffic and the mix of housing on the site but instead all the reporters wanted to talk about was

the world's tallest building it gave the project an instant Mystique when I got home that night I switched on the CBS Evening News Expecting to hear news from the opening of The Summit between Ronald Reagan and male gorbachov Dan Rather was in Geneva anchoring the program but after summarizing the day's developments suddenly he was saying in New York City today developer Donald Trump announced plans to build the world's tallest building it demonstrated how powerful and intoxicating a symbol I'd found for my project the reaction to the world's Tallest building was hardly uniformly positive but I

fully expected that the controversy actually helped to keep the project in the news critics insisted that such a building was unnecessary that people wouldn't want to live up so high and that I'd never be able to build it anyway Newsweek did a full page story about the building headlined Donald Trump's lofty ambition the New York Times ran an editorial about my plan which probably added to its Credibility time alone the editorial said Can distinguish between great dreams and vain illusions it's too early to know which describes Donald Trump's desire to loom over New York and

all other cityscapes with a 150 Story Tower my favorite reaction to the world's tallest building came from columnist George Will I've always liked will in part because he's not afraid to challenge fashion Donald Trump is not being reasonable will wrote but then man Does not live by reason alone fortunately Trump who believes that excess can be a virtue is as American as Manhattan skyline which expresses the Republic's erupting energies he says the super skyscraper is necessary because it is unnecessary he believes architectural exuberance is good for us and he may have a point brashness zest

and El are part of this country's character my only regret was that George Will didn't have a seat on the City Planning Commission to my surprise As Time passed opposition to the world's tall building seemed to diminish critics focused instead on other aspects of the development which I'd expected to be less controversial in particular the times architecture critic Paul goldberger launched something of a crusade against television City a week after I announced my plans goldberger wrote a long piece entitled is Trump's latest proposal just a castle in the air His major criticism aside from the

fact that he simply doesn't like lik all buildings was that the project hadn't been sufficiently integrated into the rest of the neighborhood that of course was precisely what I liked best about it the worst thing I could do I was convinced was to build something that blended into the surroundings 10 years earlier I taken the same position on the rebuilding of the Commodore Hyatt Hotel the Grand Central neighborhood was dying And I felt the only chance at success was to build a spectacular new hotel sheathed in reflective glass so that it stood apart from the

dull older buildings in the neighborhood the hotel became an enormous success and eventually even the critics came around reading goldberger I felt I was reliving the Commodore experience I felt certain I'd get far better reviews from Paul goldberger and certain other critics simply by cutting my buildings in half And making them look more like the better known pre-war buildings on the West Side the problem was that my project would no longer be Majestic or distinctive and it wouldn't sell it irritates me that critics who've neither designed nor built anything themselves are given cart blanch to

express their views in the pages of major Publications whereas the targets of their criticism are almost never offered space to respond of course I can be irritated all I want and it won't do any good so long as a Critic writes for a newspaper like the New York Times his opinion will continue to carry great weight whether I like it or not by the spring of 19 1986 the project we'd proposed was at something of a standstill with City Planning much of the explanation was that city government itself had become almost completely paralyzed under the

mayoral administration of Ed Koch Koch has achieved something quite miraculous He's presided over an Administration that is both pervasively corrupt and totally incompetent Richard Daly the former mayor of Chicago managed to survive corruption scandals because at least he seemed able to operate his City efficiently under coch the problem of the homeless has grown far worse the vast majority of the city remains unwired for cable highways have gone unrepaired subway tunnels have been left Unfinished companies have continued to flee to other cities and city services have deteriorated inexorably meanwhile no fewer than a dozen Coke appointees

and cohorts have been indicted on charges of bribery perjury and accepting Kickbacks or have been forced to resign in disgrace after admitting various ethical transgressions the criminally indicted include Jay turov the former head of the taxi and limousine commission John mcclaflin the Hospital's Chief and Anthony amoruso the former Transportation commissioner Victor botnik one of Ko's closest personal advisers quit after it was revealed that he' lied about his educational background and had taken numerous unnecessary trips under the pretext of doing City business Bess meerson the cultural Affairs commissioner and one of kooch's best friends resigned in

disgrace and was eventually indicted after it came out That she'd given a job to the daughter of a judge she was seeking to influence and had then lied repeatedly about her involvement later it came out that kooch ignored evidence that meerson had acted improperly uh the irony is that kooch made his reputation by boasting about his integrity and incorruptibility it doesn't seem to occur to him that if the people he appoints prove to be corrupt then in the end he must take the Responsibility to the contrary at the first hint that any of his friends

might be in trouble coach can't run fast enough the other way for example when his close friend Donald Ms the late Queen's burough president came under investigation and tried to commit suicide kach immediately called him a crook even though manise had yet to be indicted for anything at the time manise was recovering in a hospital weeks later he did succeed in killing Himself as for the coach appointees who managed to avoid criminal indictment the Scandal is their sheer incompetence many just lack Talent others seem to have concluded that the safest approach to protecting their jobs

is to stop making decisions of any kind at least then they can't be accused of breaking the law the problem is is that when officials in a huge city government stop making decisions you get the bureaucratic equivalent of gridlock Dishonesty is intolerable but inaction and incompetence can be every bit as bad in any case the city was also stonewalling my project as a means of trying to force me to make changes in my view it was a form of economic blackmail so long as I resisted their ideas they held my approvals and my costs mounted

specifically City Planning wanted me to provide more direct access to the Waterfront add more East West streets connecting the project to the existing City street grid and move the world's tallest building South away from the existing residential neighborhoods I disagreed with their suggestions but I also recognize that zoning is always a matter of negotiation as hard as I push in the end I'm practical if if it took making some compromises to get the project moving forward and the result didn't undermine the Project's economic viability I was Prepared to make the changes in March I decided

to move the location of the world's tallest building South to 63rd Street the people at City Planning were immediately more enthusiastic around the same time the New York Times had made public an environmental impact study of the site some of its conclusions I felt would ultimately help my cause I'd always believed that any concerns about density were Unwarranted in truth the west side of Manhattan is relatively underpopulated according to the census the area declined in population from 245,000 in 1960 to 204,000 in 1980 only 3,100 new apartments went up in the neighborhood between 1980 and

198 four adding several thousand more hardly represents development runamuk the study also pointed out several benefits that would come from The project for example the study predicted that the Westside 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 solu 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 like the fact that Helmut Yan 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 helmet 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 Meyer Cooper was John's antithesis legendarily civic-minded he' built his reputation as an urban plan man served 5 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 exot 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 a 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 October 1985 shortly

before going public with The helmet John plan for the site there were already indications that the city might have problems with the way we designed our open space and I was interested in hiring Cooper to work with John 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 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 report later it's 3/4 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 smaller in front of the taller buildings Alex added tow houses as a way of varying the scale what Alex didn't do was substantially reduced 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 23rd 1986 even our toughest critics were more enthusiastic than they been about the original plan the head of the local community board John Cowell still objected to the super Skys scraper 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 anti-development 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 n BC 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 right 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 uh in addition to the one in New Jersey in January 1987 NB C announced that aside from the possibility of remaining at Rockefeller Center they narrowed their choice to just two sites ours and the Marshland owned by Harts Mountain Industries in salkus 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 uh 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 Mobile Oil one of the largest corporations in the world announced that it was abandoning New York and moving to Virginia a short time later JC 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 cck 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 Halls 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 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 jerseys Aller Townsen the city's head of Economic Development had said herself that without abatement NBC stood to save up to2 billion doar over a 20-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 30 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% of any profits television City earned for a period of 40 years in

return turn I'd get a 20-year tax 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 uh Robert Harvey Freeman and Norman LaVine felt that for me to 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 aure for the city it was no lose they put up no money at all to keep and BC and in lie 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 Coke didn't participate But the city officials under him seemed receptive to the general structure of the

plan on May 25th however after more than three weeks of intense negotiations Ed Coke 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 kooch 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'm tired of sitting back quietly and watching new 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 kooch the great protector against Trump the greedy developer so for months he'd been looking for a way to get back at me for embarrassing him by building wolman 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 kooch 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 Coke Ally herb sturs until joining the times editorial board only a few weeks earlier sturs had been head of the City Planning Commission with specific responsibility for

television City in my view letting herb sturs write editorials about New York City is analogous to permitting Casper 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 kooch offered NBC a half-ass

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 Coach make his suggestion than an NBC spokesman said that Network wasn't interested in considering more sites in the meantime The executives at Harts Mountain Industries weren't sitting idly by recognizing an opportunity to force NBC's hand they announced on June 1st that the network had 30 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 coke 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 kooch is so incompetent and destructive to New York that someone has to stand up and say so publicly when the Daily News pulled its readers as to whether they agreed with Ko'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 riverv viiew 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 Compx I'll do very very well just with that my time and television cities 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 KO has moved out of Gracie Mansion chapter 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 cross my desk in the week I chose to describe have since turned out holiday ends 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 Bal Manufacturing Corporation in a short time I accumulated 99.9% of the stock Bal 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 counter sued two days after I initiated my suit Bal 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 Bal 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 B could only serve to increase the value of all casinos in town including the two I already owned in the end B offered me a settlement I couldn't refus I agreed not To stand in the way of their purchase of the Nugget in return they agreed to buy back my 99.9% 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 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% of the voting stock in the company at $135 per share several other biders 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 balet or holiday ins might be interested Annabelle hill we ended up raising more than $100,000 for the Annabel Hill fund which was 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 atriums 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 $1 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 wman 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 all almost $500,000 in profits all of which went to charity Palm Beach Towers Lee aoka 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 SL least nearly 50 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 chiani owner of Harry's Bar Sir Charles Goldstein was dismissed as Council to Lee before the deal was concluded the Australian C although we were among the finalists being considered to operate the second largest casino in the world after the Taj Mahal in Atlantic City I I thought better of it at the last Moment the idea of running a business which is a 24-hour plane trip from New York City just didn't make sense particularly when I have so much to occupy my attention in my own backyard

shortly before the decision was to be announced by officials in New South Wales I let them know that I was withdrawing my bid the Beverly Hills Hotel the hotel was finally sold to the highest bidder oilman Marvin Davis for a Price far in excess of what I was willing to pay after having the property inspected I kept my own bid low of course should Davis ever choose to sell I'm sure he'll earn a profit Marvin Davis subsequently became me of the biders for Resorts International as well after I had already made my deal he not

only offered a higher price but also tried to get the Murphy and Crosby families to reneg on their agreement with me they refused and The court approved my deal after which the New Jersey casino Control Commission also approved it by a -0 vote right around the same time I happened to be at a fabulous party in California thrown by Merv adelon and Barbara Walters and a reporter asked me about Marvin Davis's bid for Resorts kiddingly I said that Davis who happens to be terribly overweight should focus on losing 200 pounds instead of wasting time trying

to break my deal With Resorts I heard later that Davis was insens by my remark but I can't say I felt bad I don't go out of my way to be cordial to enemies the parking garage in October 1986 several months after construction on our new parking garage had begun I got an emergency call one morning just before I was scheduled to make a speech to a group of businessmen in New York my construction manager Tom pippet Was calling it seemed that the operator of a huge Megaton crane had reached his boom out too far

for a pickup and the result was the crane and a 22-ton beam toppled over onto the garage pippet told me that a huge section of the garage had literally collapsed what about the workers I asked was anyone hurt he told me that at least a 100 men had been working on the site and that a headcount was underway I told him to keep me posted and went off to make my Speech trying to put the issue out of my mind while I spoke as I was walking out after the speech I was handed a message

from Tom I called back immediately you're not going to believe this Mr Trump he said but we've accounted for everyone and no one was hurt losing even one life would have been horrible and devastating in this case only the sheer luck that the men at the site happened to be working on another part of the garage at that Moment saved their lives it goes to show you how fragile it all really is those men were very lucky and so was I the job was finished without further incident in May 1987 we opened 1,200 new spaces

in the parking facility connected by a walkway to Trump Plaza on the boardwalk during the week that followed our slot machine revenues more than doubled mostly from The increased pedestrian traffic through our facility by July we had all 2,700 parking spaces opened along with the bus terminal and the limousine drop off all on on time and on budget Las Vegas I withdrew my application for a gaming license in Las Vegas between Resorts and my two other casinos in Atlantic City I had enough to occupy me in the casino business closer to home my focus now

is on Atlantic City but I don't rule out building or buying in Nevada at some point in the Future the car a decision has been made to go into production on two Cadillac body limousines using my name the Trump golden series will be the most opulent stretch limousine made the Trump executive series will be a slightly less lavish version of the same car neither one has yet come off the line but the folks at Cadillac Motors division recently sent over a beautiful gold Cadillac alante as a gift perhaps they Felt I needed more toys to

keep me busy The Drexel deal I decided not to go forward with the hotel company deal that Drexel Burnham Lambert brought me and I have continued to keep all my Investment Banking business with Alan Greenberg and Bear Sterns it's been a rough time for Drexel Trump's Castle I said you can't bet against Avana and she proved me right even sooner than I expected when the Figures were announced For the first 3 months of 19 1987 Trump's Castle had the biggest increase in revenues among all of the 12 casinos in Atlantic City and was the most

profitable hotel in town the castle took in $ 76.8 million in those three months a 19% gain over the comparable period during the previous year good as that performance is there is no way Iana will be happy until she's far out distance the field Golf and Western I've been continuing to talk to Martin Davis the chairman of gulf and Western about the theaters in addition I've since purchased a great deal of stock in the department store chain Alexanders the chains Flagship location between 58th and 59th streets and third and Lexington Avenues next to Bloomingdales is

another perfect site for theaters as well as for a mixed use commercial and residential Skyscraper maralago the pool and the tennis court are finished and both are as beautiful as I'd hop they would be as little as I'm interested in relaxing I enjoy maralago almost in spite of myself it may be as close to Paradise as I'm going to get Moscow hotel in January 1987 I got a letter from Yuri dubinan the Soviet ambassador to the United States that began it is a pleasure for me to relay some good news From Moscow it went on

to say that the leading Soviet state agency for International tourism gsam and tourist had expressed interest in pursuing a joint venture to construct and manage a hotel in Moscow on July 4th I flew with Ivana her assistant Lisa kandra and Norma to Moscow it was an extraordinary experience we toured a half dozen potential sites for a hotel including several near Red Square we stayed in lenen suite at the national hotel and I Was impressed with the ambition of the Soviet officials to make a deal Trump fund I decided again setting up a separate fund to

buy distressed real estate using money raised from outside investors uh I don't mind taking risk myself but the idea of being responsible for the money of a lot of other people particularly when they're bound to include some friends just wasn't appealing in the end for the same reason I've never been tempted to take any of my companies public making choices is a lot easier when you have to answer only to yourself my apartment the renovation on my apartment was finally finished in the fall of 1987 I could afford to take my time and I'm happy

that I did there may be no other apartment in the world like it airplane I finally found a plane I happened to be Reading an article in business week in the spring of 1987 about a troubled texas-based company named Diamond Shamrock the article described how top Shamrock Executives were enjoying incredible perks actually living like kings among the examples cited was a lavishly equipped company owned 727 which Executives flew around in at will I sensed an opportunity on Monday morning I called the office of the Diamond Shamrock executive who had been Pictured on the cover of

the business week article it turned out that he was no longer there and a new chairman Charles Blackburn had just been named I was immediately put through to him we talked for a few minutes and I wished him well then I said that I'd read about the company 727 and that if he had any interest in selling I was interested in buying sure enough Blackburn said that as much as they all loved that plane Selling it was one of the first things on his agenda he even offered to send it up to New York so

that I could take a look at it the next day I went out to Laguardia Airport for a look I had to smile This Plane could seat up to 200 passengers but it had been reconfigured for 15 and it included such luxuries as a bedroom a full bath and a separate working area it was a little more plain than I needed but I find it hard to Resist a good deal when the opportunity presents itself a new 727 sells for approximately $30 million a G4 which is 1/4 the size goes for about $18 million however

I knew that Diamond Shamrock was hungry to sell and that not very many people are in the market for 727 I offered $5 million which was obviously ridiculously low they count at $10 million and at that point I knew I had a great deal regardless of how the negotiation ended Still I haggled some more and we finally agreed on a price of $8 million I don't believe there is any other private plane in the sky comparable to this one what's next fortunately I don't know the answer because if I did that would take half the

fun out of it this much I do know it won't be the same I've SP the first 20 years of my working life building accumulating and accomplishing things that many said could not be Done the biggest challenge I see over the next 20 years is to figure out some creative ways to give back some of what I've gotten I don't just mean money although that's part of it it's easy to be generous when you got a lot and anyone who does should be but what I admire most are people who put themselves directly on the

line I've never been terribly interested in why people give because their motivation is rarely what it seems to be and it's Almost never pure altruism to me what matters is the doing and giving time is far more valuable than just giving money in my life there are two things I found I'm very good at overcoming obstacles and motivating good people to do their best work one of the challenges ahead is how to use those skills as successfully in the service of others as I've done up to now on my own behalf don't get me wrong

I also plan to keep making deals big deals and right around the clock