(1946–)
Chairman, president, and chief executive officer, Trump Organization
Nationality: American.
Born: June 14, 1946, in New York City, New York.
Education: University of Pennsylvania, BA, 1968.
Family: Son of Frederick C. Trump (real estate developer and builder, self-made millionaire) and Mary (MacLeod) Trump (homemaker who raised five children); married Ivana Zelnickova Winkimayr (a New York fashion model), 1977 (divorced 1991); children: three; married Marla Maples (an actress), 1993 (divorced June 1999); children: one.
Career: Trump Organization, president, chairman, and CEO, 1975–.
Awards: Entrepreneur of the Year, Wharton Entrepreneurial Club, 1984; Ellis Island Medal of Honor, 1986; Developer of the Year, Construction Management Association of America, 1999; Hotel and Real Visionary of the Century, UTA Federation, 2000.
Publications: Trump: The Art of the Deal (with Tony Schwartz), 1987; Trump: Surviving at the Top (with Charles Leerhsen), 1990; Trump: The Art of the Comeback (with Kate Bohner), 1997; The America We Deserve (with Dave Shiflett), 2000.
Address: Trump Organization, 725 Fifth Avenue, New York, New York 10022-2519; http://www.trump.com.
By the early 2000s the American real estate development and construction businessman Donald John Trump had designed a billion-dollar empire with his name branded on luxury properties to identify them as international symbols of wealth and privilege. Trump even summoned a court to protect his surname from being used by anyone else in connection with real estate. He built his empire in a big way, making his name synonymous with the hustle, money, and glamour of New York City and other U.S. locations.
Learned from His Father
Trump learned his deal-making and entrepreneurial skills from his father, Frederick, who was forced at eleven years of age—upon his father's death—to run the family business. acquired the ability to recognize good deals when he constructed and operated 24,000 affordable housing units in Brooklyn, Queens, and Staten Island.
As a child, Trump assisted his father with the rental property business; at age five he was taken along to inspect building sites, and at thirteen he drove a bulldozer. Even at this early stage, Trump was described as self-assured, determined, and positive. He was strongly influenced by his father in his decision to make a career in real estate, but he envisioned buying and selling rather than collecting rents. He learned showman-ship and how to advertise himself from his mother, Mary, who liked to be in the center of the spotlight.
Growing Up Trump
Trump spent his high school years at the New York Military Academy, where his energetic aggression and competitiveness were encouraged. He performed well academically and socially, but he never formed close relationships because his drive to win repelled friendships. After graduating in 1964, Trump entered Fordham University, where he learned a valuable lesson. With his father he attended the opening ceremonies for the Verrazano-Narrows Bridge, which connects Brooklyn and Staten Island, and noticed that the bridge's designer was not being honored. In Gwenda Blair's biography, Trump is quoted as saying: "I realized then and there, that if you let people treat you how they want, you'll be made a fool. I realized then and there something I would never forget: I don't want to be made anybody's sucker."
Trump left Fordham to study at the University of Pennsylvania's Wharton School of Finance because it possessed one of the country's few real estate departments. He studied accounting, finance, money and banking, and mortgages while working with his father during the summers. He learned construction details and paid close attention to detail, even noticing that his father kept busy with paperwork while on coffee breaks. The Trump family soon realized that Fred and Donald were happiest when they were talking real estate.
Upon graduation (with a degree in economics) in 1968, Trump joined his father's company, with a clear view of what he wanted to do: develop real estate in the biggest way possible. He persuaded his father to expand the company's holdings by taking loans against their equity, which then stood at $200 million. Trump became president in 1975 and changed the company's name to Trump Organization. The climate in Queens was competitive, and profit margins were narrow, so Trump decided that he could make more money in elegant Manhattan.
Influential Manhattan
Without much money, Trump was still able in 1971 to use his negotiating skills to join an exclusive social club. He was introduced to many influential people and leaped at the opportunities given to him. Trump convinced himself that his wealthy Manhattan clientele would provide him with both money and power. Trump entered the stagnant Manhattan real estate market in 1974 after becoming interested in large, attractively designed buildings. When the Pennsylvania Central railroad entered bankruptcy, Trump quickly learned to outmaneuver the opposition, obtaining the option on Grand Central Terminal, abutting the unprofitable Commodore Hotel. The 1975 deal included the dilapidated 119-acre railroad yards located on the west side of Manhattan along the Hudson River from West 30th Street to West 39 Street and West 59th Street to West 72nd Street. Although his initial plans to build apartments proved to be economically unfeasible, Trump promoted the location for a convention center. Trump was responsible for the designation and construction of the complex, subsequently named for Senator Jacob Javits.
During his early wheeler-dealer days, Trump learned well how to combine his father's political connections, his advisers' wisdom, and his growing knowledge of real estate development. Trump made up his mind, delved totally into a project, acted like a salesman, and never doubted himself. In addition, it was common for Trump to work out no formal business plan or development strategy for new projects, storing ideas and preliminary calculations in his head. He also viciously controlled his employees, so that those who stayed the longest learned not to argue with him.
Seeing Opportunities Everywhere
One of Trump's strengths was recognizing opportunity where others saw nothing. Trump looked past the bleak Commodore Hotel and realized that many wealthy people passed by it every day. To everybody except Trump, the redevelopment seemed impossible. Nevertheless, he purchased the hotel from Penn Central for $10 million and began negotiating his first big deal. Regarding the excellent location next to Grand Central Station, Trump and Hyatt Hotel brokered a deal with the city, which included critically needed and brilliantly secured 40-year tax abatements.
Trump arranged financing and completely renovated the exterior of the Grand Central Terminal and the entire hotel. The Commodore, renamed the Grand Hyatt Hotel, opened in 1980, by which time Trump was regarded as the city's best-known developer. But Trump was far from satisfied. He wanted to create unique buildings that people would talk about and admire, and he wanted to place his name on these buildings. In 1979 Trump leased a site on Fifth Avenue adjacent to Tiffany's on which to build a $200 million apartment-retail complex. In 1982 Trump's world-renowned 58-story skyscraper, Trump Tower, was finished. When the building attracted well-known retail stores and celebrity renters, Trump received national acclaim.
After legalized gambling arrived to New Jersey in 1977, Trump investigated the lucrative casino business. He began buying up properties in Atlantic City in 1980, a complex project that involved acquiring land, winning gambling licenses, and obtaining permits and financing. Trump attended regulatory hearings and hired local attorneys to ensure the success of his ventures. Holiday Inn, the parent of Harrah's casino hotels, agreed to be a partner in the $250 million developmental complex, which opened in 1982 as Harrah's at Trump Plaza. In 1986 Trump bought out Holiday Inn and renamed it Trump Plaza Hotel and Casino. When Hilton Hotels failed to obtain a gambling license, Trump purchased the Hilton Hotels casino-hotel and renamed the $320 million complex Trump's Castle. Trump acquired the Taj Mahal, which at the time of its opening in 1990 was the world's largest hotel-casino.
Concurrently, Trump bought a 37-story apartment building and the adjacent Barbizon-Plaza Hotel, which overlooked Central Park. Unable to tear down the building due to tenant opposition, Trump changed direction and renovated the Barbizon into luxury residential buildings, renaming it Trump Parc. In 1988 Trump acquired the 37-story Plaza Hotel, at 59th Street and Fifth Avenue, for $407 million and spent $50 million refurbishing it. The Plaza's grandeur gave Trump added prestige.
Going Against the Business Norm
Competition was fierce during these developments. Even though Trump had studied business in college, he often went against basic economic principles when pursuing deals. One principle, for instance, is to lower prices with extreme competition. However, when competitors lowered prices to outmaneuver him, Trump saw through his clientele's psychology and instead raised prices, believing that the wealthy would pay for luxury.
Challenged With Bankruptcy
At his peak in the late 1980s Trump's estimated $1 billion empire was one of the world's most powerful real estate organizations, and Trump was well known worldwide as a rich entrepreneur who found, bought, and turned around losing properties. He was known in Manhattan as one of the world's most controversial builders, often called "the P. T. Barnum of Finance." In 1990 Trump drew up plans in Los Angeles for building a $1 billion commercial and residential project featuring a 125-story office building. Despite his experiences at making deals and recognizing good investments, however, Trump could not counter a downward real estate market. Trump faced bankruptcy when he was unable to make massive loan payments of over $2 billion. He had regularly convinced financial institutions that his name raised the worth of his assets, so they could ignore their usual lending and collateral guidelines. At that point, however, the market was contracting, and banks were not eager to agree to his demands and invest in what was then considered risky.
Trump lost control of some of his real estate to creditor banks and was forced to trade part of his empire to restructure debts. Although he secured emergency financing, his worth was reduced from an estimated $1.7 billion to $500 million. Perhaps worse, Trump's expertise was questioned. Trump found this uncertain period a challenge. Although disaster loomed, the skillful wheeler-dealer had his talents, experiences, personality, and name, and they were still valued. Trump remained optimistic as he secured favorable loan terms, renegotiated bond obligations, and sold his most unprofitable holdings.
Management Style That Worked a Comeback
Even though his empire was crumbling, Trump managed to bounce back with the help of revised bankruptcy laws that favored debtors. Maintaining his usual business decorum while talking with bankers and lawyers, he acted like a professional man who was still at the top of his game. Since creditors had no interest in losing their investments, they worked with Trump to broker deals. He was forced to appoint a chief financial officer, live on a budget, and standardize operations. In return, Trump was offered a bailout that lowered or suspended his debt interest and, in essence, allowed him to retain most of his valuable assets, namely, his casinos, the rail yards, his residences, and partial interest in the Plaza Hotel.
By the early 1990s Trump was reportedly worth $900 million, and by 1997 his worth was estimated to be almost $2 billion. In fact, Trump was making a comeback when he acquired the Trump Building at 40 Wall Street, a 72-story building located across from the New York Stock Exchange. Real estate experts said the purchase, which took place at the nadir of the 2000s financial downturn, was one of the best deals made in the previous 25 years. In 1998 Trump built a 52-story luxury hotel and residential building on Manhattan's Central Park West. The Trump International Hotel and Tower received some of the highest sale and rental prices in the United States.
The former West Side Railroad Yards, which Trump had secured in the early 1970s, became a $5 billion project known as Trump Place. The site comprised 5,700 residential units, more than five million square feet of commercial space, and 18 buildings. Trump Place was the largest development ever approved by the New York City Planning Commission. Trump also successfully converted into luxury condominium apartments the property at 610 Park Avenue (at 64th Street) formerly known as the Mayfair Regent Hotel. In addition, he completed construction on the Trump World Tower, adjacent to the United Nations, a 90-story luxury residential building. It was described as the most successful condominium tower ever built in the United States and reaped critical acclaim in architectural reviews.
Trump entered into a joint venture with the Chicago Sun Times to build a three-million-square-foot skyscraper directly west of Michigan Avenue, which was anticipated to be one of the biggest buildings in Chicago. In 2002 Trump purchased the Delmonico Hotel at 59th Street and Park Avenue in New York City. Developed in partnership with General Electric, the building was destined to be a luxury high-rise condominium, called Trump Park Avenue. Trump planned to make it the most luxurious building ever built in New York City. In 2002 Trump also entered into partnerships to build the $600 million Trump Grande Ocean Resort and Residences in Miami Beach, Florida, and a luxury condominium tower on the Las Vegas strip.
"The Donald"
Trump, or "the Donald," as he was nicknamed, finely crafted his persona over the years with an intense drive to place "Trump" on everything he bought. He issued a stream of news bulletins about his every move, putting himself constantly in the public eye. He was a hands-on businessman who liked to know every detail of his ventures. Considered driven, arrogant, and intelligent, Trump understood the psychology of real estate speculation. He made himself famous with his flamboyant skills at selling himself to the media and personified the American business success story. He thrived on conflict and the ultimate challenge, doing his best when problems seemed insurmountable to others.
Sources for Further Information
Barrett, Wayne, Trump: The Deals and the Downfall, New York: HarperCollins Publishers, 1992.
Blair, Gwenda, The Trumps: Three Generations That Built an Empire, New York: Simon & Schuster, 2000.
Hurt, Harry, Lost Tycoon: The Many Lives of Donald J. Trump, New York: Norton, 1993.
O'Donnell, John R. (with James Rutherford), Trumped!: The Inside Story of the Real Donald Trump—His Cunning Rise and Spectacular Fall, New York: Simon & Schuster, 1991.
Tuccille, Jerome, Trump: The Saga of America's Most Powerful Real Estate Baron, New York: Donald I. Fine, 1987.
—William Arthur Atkins
Sometimes by losing a battle you find a new way to win the war.
