It may not come as a surprise to you, but Donald Trump has no tact. He lacks grace when he speaks in front of a crowd, poise when he tweets and now, Timothy L. O’Brien has let it a little more known that Trumps lacks the ability – or rather, finesse – to make deals. And he knows it:
“If I’m president,” he announced at the most recent GOP debate, “there won’t be stupid deals anymore.”
Back in the 80s Donald Trump lost a lot of money – but luckily he had his dad to overcome the setbacks. Instead of making deals, he became a reality TV star, golf course developer and “human shingle” who licensed his name on everything from “real estate and vodka to mattresses and underwear.”
But there was one dream he tried to keep alive: Television City.
It was a deal that would have put him at the top of New York real estate, but his inability to make deals screwed up everything.
The deal involved Manhattan’s West Side Yards, a sprawling, 77-acre tract abutting the Hudson River between 59th and 72nd Streets and at the time the largest privately owned undeveloped stretch of land in New York City. The Yards were a vestige of the Penn Central Transportation Company, a failed railroad enterprise that, in 1970, filed what was then the biggest corporate bankruptcy in U.S. history. In the wake of that collapse, Trump leveraged his father’s ties to New York’s Democratic machine and local bankers to acquire pieces of Penn Central’s holdings, including the Yards, in the mid-1970s.
Yet he was unable to reach agreements with the people he needed the most: the city and community groups. He wouldn’t accept their opinions on how to build the plot so as to work for everyone in the surrounding areas:
Trump’s plans for the property included office and residential space; a new broadcasting headquarters for NBC; a rocket-ship-shaped skyscraper that would have been the world’s tallest building and cast shadows across the Hudson River into New Jersey; and a $700 million property tax abatement from the city as an incentive to build it. The $4.5 billion project would have been New York’s biggest development since Rockefeller Center.
All he had to do to get it off the ground was to bring together various stakeholders. Everything was in place, yet Trump’s lack of consideration for others held him back. Locals wanted more parks and less developments while the mayor wanted to balance the city’s redevelopment with the longtime resident’s needs.
Instead, the author of The Art of the Deal quickly became entangled in an epic, only-in-New-York round of public fisticuffs with the mayor in the spring and summer of 1987. The brawl devolved into name-calling and ultimately helped doom a deal that could have had vastly different results if Trump chose different tactics.
After learning that the mayor was going to turn down his request for the $700 million abatement for Television City, Trump dashed off a letter to the mayor.
For you to be playing ‘Russian Roulette’ with perhaps the most important corporation in New York over the relatively small amounts of money involved because you and your staff are afraid that Donald Trump may actually make more than a dollar of profit, is both ludicrous and disgraceful.
The mayor wrote back to Trump – and held a press conference – warning him to “refrain from further attempts to influence the process through intimidation.”
In true Trump style, he held his own press conference and called upon the mayor to resign. the battle filled the front pages of newspapers and television news stations.
The mayor said Trump was “squealing like a stuck pig.”
Trump said the mayor’s New York had become a “cesspool of corruption and incompetence.”
The mayor said Trump was a “piggy, piggy, piggy.”
Trump said the mayor had “no talent and only moderate intelligence” and should be impeached:
Ed Koch would do everybody a huge favor if he would get out of office and they started all over again. It’s bedlam in the city.”
After things settled down, Koch announced he would zone the yards for half the size Trump wanted and gave NBC tax breaks which persuaded it to remain in the Rockefeller Center.
Although Trump made a promise to build Television City, he never did. Maybe this is the reason he is wanting to become president.
Only in 1994 when Trump was paying around $23.5 million a year to cover costs of keeping the Yards did Trump let go of his dream on the request of his bankers.
The property went to a group of Hong Kong investors, including New World Development, for $82 million and the assumption of about $250 million in debt Trump had amassed.
The Hong Kong investors later broke ground on the site with a series of high-end condominiums known as Riverside South, and the group used Trump’s name on some of the buildings there (they also paid him management and construction fees). The Hong Kong group sold the entire project for about $1.8 billion in 2005 – the largest residential real estate transaction in New York City’s history at the time.
Because of the terms of Trump’s involvement in the project, he was entitled to a portion of the profits so sued the Hong Kong group over a claim that they could have gotten more money. Lag.
They went ahead and sold, and Trump eventually ended up with minority stakes in a pair of office buildings now worth about $640 million, according to Bloomberg data.
(The $550 million Trump could have gotten for the Yards in 1989 would be worth over $1 billion in 2016 dollars, and that figure excludes any more money he might have made by subsequently investing those funds 27 years ago.)
Although Trump became a major television star, he wasn’t – as he told viewers of the show – “the largest real estate developer in New York.” If he had kept the Yards, however, he just might have been.
Unfortunately, Trump lacks the ability to make deals – and if that’s the case, what’s he going to do as president. No diplomacy whatsoever.
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