Business career of Donald Trump Real estate
Harrah's at Trump Plaza opened in Atlantic City in 1984. The hotel/casino was built by Trump with financing by Holiday Corp.[31] and operated by the Harrah's gambling unit of Holiday Corp. The casino's poor results exacerbated disagreements between Trump and Holiday Corp.[32] Trump also acquired a partially completed building in Atlantic City from the Hilton Corporation for $320 million. When completed in 1985, the hotel/casino became Trump Castle. Trump's wife, Ivana, managed the property.[33]
Trump acquired the Mar-a-Lago estate in Palm Beach, Florida, in 1985 for $5 million, plus $3 million for the home's furnishings. In addition to using the home as a winter retreat, Trump also turned it into a private club with membership fees of $150,000. At about the same time, he acquired a condominium complex in West Palm Beach with Lee Iacocca that became Trump Plaza of the Palm Beaches.[34]
In 1980, repairs began on Central Park's Wollman Rink, with an anticipated two-and-a-half year construction time frame. Because of flaws in the design and numerous problems during construction, the project remained unfinished by May 1986 and was estimated to require another 18 months and $2 million to $3 million to complete.[35][36] Trump was awarded a contract as the general contractor in June 1986 to finish the repairs by December 15 with a cost ceiling of $3 million, with the actual costs to be reimbursed by the city.[36] Trump hired an architect, a construction company, and a Canadian ice-rink manufacturer and completed the work in four months, $775,000 under budget.[36] He operated the rink for a year and gave some of the profits to charity and public works projects[37] in exchange for the rink's concession rights.[38][36] Trump managed the rink from 1987 to 1995. He received another contract in 2001 which was extended until 2021.[39][40] According to journalist Joyce Purnick, Trump's "Wollman success was also the stuff of a carefully crafted, self-promotional legend."[39] While the work was in progress, Trump called numerous press conferences, for example for the completion of the laying of the pipes and the pouring of the cement.[41] In 1987, he also unsuccessfully tried to get the city to rename the landmark after him; the Trump logo is prominently displayed on the railing encircling the rink, on the Zamboni,[39] on the rental skates,[40] and on the rink's website.[40][42]
Trump unveiled a plan to construct a miniature city within New York City on the "largest available undeveloped tract" of land on the island of Manhattan on November 30, 1984.[43] The Television City proposal, later called Trump City, would consist of "nearly 8,000 apartments and condominiums for up to 20,000 people, almost 10,000 parking spots, some 3.6 million square feet of television and movie studio space, and some 2 million square feet of 'prestigious' stores."[44] To stand above all other buildings would have been an uncommonly tall skyscraper for the time, to be twice the height of the 76-story buildings beneath it.[44] An organization of celebrities called Westpride, consisting of such individuals as Jerry Seinfeld, Christopher Reeve, and others, was formed and fundraised in opposition to the proposal.[44] Mayor Ed Koch denied Trump tax breaks to help him develop his proposal, instead giving them to NBC to thwart the possibility of them relocating from Rockefeller Center to Trump's concept.[44]
Trump acquired the Plaza Hotel in Manhattan in 1988. He paid $400 million for the property and once again tapped Ivana to manage its operation and renovation.[45]
Later in 1988, Trump acquired the Taj Mahal Casino in Atlantic City, New Jersey, in a transaction with Merv Griffin and Resorts International.[46] The casino was opened in April 1990, and was built at a total cost of $1.1 billion, which at the time made it the most expensive casino ever built.[47][48] Financed with $675 million in junk bonds[49] at a 14% interest rate, the project entered Chapter 11 bankruptcy the following year.[50] Banks and bondholders, facing potential losses of hundreds of millions of dollars, opted to restructure the debt. In late 1990, Trump and Westpride negotiated an alternative proposal to scrap Trump's original concept for Trump City and instead build Riverside South, devoid of Trump's tall skyscraper and instead consisting of a park and shorter buildings than the originally proposed 76-story ones.[44][51] Architecture critic Paul Goldberger wrote for The New York Times in August 1991, "Mr. Trump knew that it would be a freezing day in August before his own plan could ever win approval and, like any skillful politician, he jumped on the opposition bandwagon so deftly that he made it look like his own."[44][51]
The Taj Mahal emerged from bankruptcy on October 5, 1991, with Trump ceding 50% ownership in the casino to the bondholders in exchange for lowered interest rates and more time to pay off the debt.[52] He also sold his financially challenged Trump Shuttle airline and his 282-foot (86 m) megayacht, the Trump Princess.[49][53][54] Trump would gain the financial backing for Riverside South from Hong Kong-based businessmen for around $90 million, which would help pay for dues on the property Trump owed to banks and on back taxes, with Trump collecting a 30% ownership stake and maintaining daily construction.[44] According to a lawyer close to the negotiations, the agreement almost fell apart after Trump "used a string of foul language, including racial epithets regarding Asians" during the negotiations.[44] The agreement helped Trump avoid personal bankruptcy after having to file for corporate bankruptcy four times prior.[44]
The Taj Mahal property was repurchased in 1996 and consolidated into Trump Hotels & Casino Resorts, which filed for bankruptcy in 2004 with $1.8 billion in debt, filing again for bankruptcy five years later with $50 million in assets and $500 million in debt. The restructuring ultimately left Trump with 10% ownership in the Trump Taj Mahal and other Trump casino properties.[54] Trump served as chairman of the organization, which was renamed Trump Entertainment Resorts, from mid-1995 until early 2009, and served as CEO from mid-2000 to mid-2005.
Real estate
Early career
Trump began his real estate career at his father's company,[3] Trump Management,[4] which focused on middle-class rental housing in the New York City boroughs of Brooklyn, Queens, and Staten Island. One of Trump's first projects was the attempted turnaround of the troubled Swifton Village apartment complex in Cincinnati, Ohio, which his father, Fred Trump, had purchased at foreclosure for $5.7 million in 1962, equivalent to $46 million in 2017.[5] Fred and Donald Trump became involved in the project. By the time Trump graduated from college in 1968, he was receiving the 2019 equivalent of $1,000,000 a year in untaxed gifts from his father.[6] At age 23, he made an unsuccessful commercial foray into show business, investing $70,000 to become co-producer of the 1970 Broadway comedy Paris Is Out![7]
He was made the president of the company in 1971 and began using "The Trump Organization" as an umbrella brand.[8][9] In that year, at the age of 25, he also moved to Manhattan, where he took part in larger construction projects and used glitzy architectural design to foster media attention.[10] In 1973, the Justice Department alleged that the Trump Organization discriminated against prospective black tenants, rather than just screening out low-income applicants as they said. The Department of Justice said that black "testers" were sent to more than half a dozen buildings and were denied apartments, but a similar white tester would then be offered an apartment in the same building.[11] Ultimately the Trumps' company and federal officials signed an agreement under which the Trumps made no admission of wrongdoing, and under which qualified minority applicants would be presented by the Urban League.[12][13]
By 1973, Trump as president of the Trump Organization oversaw 14,000 apartments across Brooklyn, Queens, and Staten Island. In 1978, the city selected his site on the West Side of Manhattan as the location for its Jacob Javits Convention Center, after finding that he was the only bidder who had a site ready for the project.[12] He received a broker's fee on the property sale.
Trump's first major deal in Manhattan[14] was the development of the Grand Hyatt Hotel in 1978 next to Grand Central Terminal. The aging brick facade of the Commodore Hotel was sheathed in glass, and the existing lobby of the hotel was replaced by an atrium.[15] The Commodore was thus presented as a remodeled Hyatt hotel at its opening in September 1980, helping to bring Trump to public prominence.[15][16] Part of this deal was a $1 million loan Fred Trump's Village Construction Corp. made to help repay draws on a Chase Manhattan credit line Fred had arranged for Donald as he built the hotel, as well as a $70 million construction loan jointly guaranteed by Fred and the Hyatt hotel chain. Fred was a silent partner in the initiative, due to his reputation having been damaged in New York real estate circles, after investigations into windfall profits and other abuses in his real estate projects, making Donald the frontman in the deal. According to journalist Wayne Barrett, Fred's two-decade friendship with a top Equitable officer, Ben Holloway, helped convince them to agree to the project.[14] Donald negotiated a 40-year tax abatement for the hotel with the city, in exchange for a share of the venture's profits. The deal helped reduce the risk of the project and provided an incentive for investors to participate.[17]
In 1981, Trump purchased and renovated a building that would become the Trump Plaza, on Third Avenue in New York City.[18] Trump made this into an apartment cooperative, in which tenants partly owned the building.[18]
Trump Tower[edit]
In 1983, Trump completed development of Trump Tower, a 58-story skyscraper in Midtown Manhattan. The project involved complicated negotiations with different parties for the Bonwit Teller building, the land, and the airspace above a neighboring building. When negotiations were completed in 1978, The New York Times wrote "That Mr. Trump was able to obtain the location ... is testimony to [his] persistence and to his skills as a negotiator."[19]
Trump Tower occupies the former site of the architecturally significant Bonwit Teller flagship store, which Trump demolished in 1980 after purchasing the site.[20][21] There was public outrage when valuable Art Deco bas-relief sculptures on its facade, which had been promised to the Metropolitan Museum of Art by Trump, were destroyed on the orders of the Trump Organization during the demolition process.[20][21] In addition, the demolition of the Bonwit Teller store was criticized for a contractor's use of some 200 illegal Polish immigrant workers, who, during the rushed demolition process, were reportedly paid 4–5 dollars per hour for work in 12-hour shifts.[22][23] Trump testified in 1990 that he rarely visited the site and was unaware of the illegal workers, some of whom lived at the site and who were known as the "Polish Brigade". A judge ruled in 1991 that the builders engaged in "a conspiracy to deprive the funds of their rightful contribution", referring to the pension and welfare funds of the labor unions.[24] However, on appeal, parts of that ruling were overturned,[25] and the record became sealed when the long-running labor lawsuit was settled in 1999, after 16 years in court.[22][23]
Trump Tower was developed by Trump and the Equitable Life Assurance Company, and was designed by architect Der Scutt of Swanke Hayden Connell.[26] Trump Tower houses both the primary penthouse condominium residence of Donald Trump and the headquarters of the Trump Organization.[27] The building includes shops, cafés, offices, and residences. Its five-level atrium features a 60-foot-high waterfall spanned by a suspended walkway, below a skylight.[28] Trump Tower was the setting of the NBC television show The Apprentice including a fully functional television studio set.[29] When the building was completed, its condominiums sold quickly and the tower became a tourist attraction.[30]
Expansion
Real estate
Golf courses
The Trump Organization operates many golf courses and resorts in the United States and around the world. The number of golf courses that Trump owns or manages is about 18, according to Golfweek.[83] Trump's personal financial disclosure with the Federal Elections Commission stated that his golf and resort revenue for the year 2015 was roughly $382 million.[84][85]
In 2006, Trump bought the Menie Estate in Balmedie, Aberdeenshire, Scotland, creating a golf resort against the wishes of local residents[86] on an area designated as a Site of Special Scientific Interest.[87][88] A 2011 independent documentary, You've Been Trumped, by British filmmaker Anthony Baxter, chronicled the golf resort's construction and the subsequent struggles between the locals and Donald Trump.[89] In December 2015, Trump's appeal objecting to an offshore windfarm (Aberdeen Bay Wind Farm) within sight of the golf links was denied.[90] Despite Trump's promises of 6,000 jobs, in 2016, by his own admission, the golf course has created only 200 jobs.[91] In June 2019, Scottish Natural Heritage ruled that the golf course had "destroyed" the sand dune system, causing permanent habitat loss, and recommended that the SSSI status be revoked.[92] The special status was removed in December 2020.[93]
In April 2014, Trump purchased the Turnberry hotel and golf resort in Ayrshire, Scotland, which was a regular fixture in the Open Championship rota.[94][95] After the 2021 United States Capitol attack, the organizer of the championship, The R&A, announced that The Open would not be held again at Turnberry as long as its links to the Trump Organization remain.[96][97]
Professional sports[edit]
In 1983, Trump's New Jersey Generals became a charter member of the new United States Football League (USFL). Before the inaugural season began in 1983, Trump sold the franchise to Oklahoma oil magnate J. Walter Duncan, and bought it back after the season. He then attempted to hire longtime Miami Dolphins coach Don Shula, but the deal fell apart because he was unwilling to meet Shula's demand for an apartment in Trump Tower. Trump ended up hiring former New York Jets coach Walt Michaels.[98][99][100] The USFL played its first three seasons during the spring and summer, but Trump convinced the majority of the owners of other USFL teams to move the USFL 1986 schedule to the fall, directly opposite the National Football League (NFL), arguing that it would eventually force a merger with the NFL, which would supposedly increase their investment significantly.[101]
Before the 1985 season, Trump signed Heisman Trophy-winning quarterback Doug Flutie to a $7 million 5-year personal-services contract. That made Flutie the highest-paid pro football player at the time, as well as the highest-paid rookie in any professional sport.[102] After the season, the Generals merged with the Houston Gamblers. Trump owned 50% of the newly merged team, which would stay in New Jersey and retain the Generals nickname. At the time, Trump boasted "it's probably the best team in football." (New Jersey and Houston both had good but not great seasons in 1985: they each made the playoffs but lost first-round games.)
The Generals never played another game.[103] The 1986 season was cancelled after the USFL won a pyrrhic victory in an antitrust lawsuit against the NFL: the NFL technically lost the suit, but the USFL was awarded just $3.00 in cash damages. The USFL, which was down to just 7 active franchises from a high of 18, folded soon afterward.[98]
Trump had expressed an interest in purchasing the Cleveland Indians for $13 million in a February 15, 1983 letter sent by Kenneth Molloy to team president Gabe Paul. Trump increased his offer to $34 million later that same year. His lack of commitment to keep the franchise in Cleveland beyond three years cost him any chance of completing the acquisition.[104]
Trump remained involved with other sports after the Generals folded, operating golf courses in several countries.[98] He also hosted several boxing matches in Atlantic City at the Trump Plaza, including Mike Tyson's 1988 fight against Michael Spinks, and at one time acted as a financial advisor for Tyson.[98][105][106]
In 1989 and 1990, Trump lent his name to the Tour de Trump cycling stage race which was an attempt to create an American equivalent of European races such as the Tour de France or the Giro d'Italia. The name was suggested by his business partner, basketball commentator Billy Packer, who originally planned to call the race the Tour de Jersey. The first stage of the inaugural race ended in the college town of New Paltz, New York where picketers greeted the riders with anti-Trump signs. The second stage began in New York City, and Mayor Ed Koch, who had denounced Trump as "one of the great hucksters", boycotted the event. The last stage of the 10-stage 837-mile race was even more controversial. Going into the last stage, Belgian rider Eric Vanderaerden was favored to win the tour championship, but lost at least 1 minute 20 seconds when he took a wrong turn on a poorly marked course in Atlantic City, riding a quarter-mile or more out of his way. He ended up finishing third overall, behind tour winner Dag-Otto Lauritzen (a Norwegian rider with the American-owned 7-Eleven team) and runner-up Henk Lubberding, who also took a wrong turn during the last stage. Trump withdrew his sponsorship after the second Tour de Trump in 1990 because his other business ventures were experiencing financial woes. The race continued for several more years as the Tour DuPont.[107][108]
Trump submitted a stalking-horse bid on the Buffalo Bills when it came up for sale following Ralph Wilson's death in 2014; he was ultimately outbid, as he expected, and Kim and Terrence Pegula won the auction.[109] During his 2016 presidential run, he was critical of the NFL's updated concussion rules, complaining on the campaign trail that the game has been made "soft" and "weak", saying a concussion is just "a ding on the head." He accused referees of throwing penalty flags needlessly just to be seen on television "so their wives see them at home."[110]