Trump Never Give Up

by Donald J. Trump

  I wanted a big operator, and the big names then were Hilton, Hyatt, Sheraton, Holiday Inn, and Ramada Inn. To me, the top of the line was Hyatt. Their hotels were contemporary and light, which would be the perfect antidote to the dark and dreary Commodore. It was also a fact that they didn’t have a presence in New York City, though Hilton did. They might be interested.

  I was correct—they were. I called up the president, and we discussed a partnership. However, he was prone to changing his mind after we’d negotiate, and this was seriously interfering with any progress. So I called another executive at Hyatt who suggested I call the guy who really ran the company, Jay Pritzker of the Pritzker family, who owned a controlling interest in Hyatt, so I did. He seemed eager to meet me and came to New York. We made a deal quickly, as equal partners. Hyatt would manage the hotel after I had it built. I was thrilled. We announced it to the press in May of 1975.

  I still needed to get financing—and a multimillion dollar tax abatement from the city. At least with a hotel partner, an architect, and rough cost estimates, I had something substantial to bring with me along with my big ideas. So I hired a real estate broker who had a lot of experience, and who was in his sixties. I was only 27 years old at this time, and having a mature, accomplished presence with me worked to my advantage. We’d be making the pitch together for financing and we’d make a good pair. That’s a good point to remember—get the right people to work with you. When dealing with Hyatt, it was critical that I had gone around the president who was slowing things down and called Jay Pritzker directly. Now, finding a dedicated broker who added the right balance to my image was a smart move. Am I tooting my own horn a bit? You bet.

  Getting financing quickly became a catch-22 situation: Without financing, the city wasn’t about to consider a tax abatement, and without a tax abatement, the banks weren’t too keen on financing. It seemed like a brick wall at every turn, so we decided to change our approach. We appealed to the bankers’ guilt about the decaying city and the fact that they were choosing to look the other way when someone (like me) had a great idea to change things for the better. I’d be changing a prime area that was headed toward becoming a slum into a vibrant new place. How could they not want to be involved? Of course, that didn’t work.

  THE LOW POINT

  Here was the moment of truth. We finally found a bank that appeared to be interested. We went far with them, putting in endless hours and effort, when a key guy suddenly changed his mind and brought up some inconsequential issue in order to kill the deal. We came up with every conceivable argument, but the guy was implacable. He would not budge. It was at this point that I said to my broker, “Let’s just take this deal and shove it.” I had had it.

  You’re probably surprised to even hear me say it, but it’s one of the few times I just wanted to throw in the towel. It was my broker and my lawyer, George Ross, who convinced me to keep going, pointing out how much time and effort had already been devoted to this project. I quickly resolved to stick it out and see this through. I’m not a quitter by nature, but I’m telling you this so you’ll know there have been times when the difficulties seemed greater than the rewards. That was definitely the low point, but because I hung in there, it became a turning point. Afterward my resolution became even stronger.

  I decided to approach the city, even without financing, and explain the situation: the Hyatt hotel organization was anxious to come to New York, but the costs were too high—unless the city gave us a break on property taxes. I was blunt and to the point, and it was effective. The city agreed to a deal that would essentially make us partners, and I would receive a property tax abatement for 40 years. It was a deal that benefited everyone. I would buy the Commodore for $10 million, with $6 million going to the city for back taxes. I would then sell the hotel to the city for one dollar, and they would lease it back to me for 99 years.

  Was this complicated? Yes, but it worked, and we eventually got financing from two institutions. One of them was directly across the street from the Commodore. I don’t think they wanted their neighborhood to continue into decline, which they knew it was headed for. They knew a new and beautiful hotel could bring their area back to prime time, prime space, and prime business.

  THE RESULT

  I don’t know if you have seen the Hyatt at Grand Central, but it has four exterior walls of mirrors as a façade—which reflect all the wonderful architecture of the area. Incredibly, this at first made people furious because it didn’t fit in with the existing neighborhood design. What they didn’t realize is that the reflections of the surrounding buildings emphasized their beauty and importance to the Manhattan skyline. Now, people and critics love this building. It started the revitalization of the Grand Central area and opened in 1980 to great success. Today, it’s a hub of New York City—thriving and beautiful. I’m very happy for my sake and for the city of New York that I didn’t decide to give up on this one.

  COACH TRUMP

  MAKE IT HAPPEN IN YOUR LIFE

  Expect problems and setbacks. It’s all part of the game. If you’re not running into major challenges, you’re doing something easy, and probably not that valuable—and it’s probably not going to make much money for you. A big problem often signals a big opportunity. Be prepared to work long and hard for it.

  Don’t be afraid to pursue multiple options, or multiple people, at the same time. If one thing doesn’t work out, you’ve got back-up options. I promise you, not everything is going to work. In fact, you may have to try a lot of things to get just one thing to work. That’s tenacity, and it’s critical to success.

  15

  CULTIVATE A SENSE OF DISCOVERY

  A Letter from My Kindergarten Teacher

  I receive a lot of mail every day—piles of it. Not too long ago I received a letter from my kindergarten teacher. It was a big surprise for me to come across that in one of those piles of letters. She mentioned that what she remembered most clearly about me is that I never stopped asking questions. I was the most inquisitive student she had ever had. I wrote back to her that some things never change—I still ask a lot of questions—but that my curiosity and sense of discovery has served me well for all these years. I also thanked her, belatedly, for her patience many years ago, listening to all my questions.

  I started thinking back to those early days. Every one of my questions was the beginning of a new discovery back then, and that’s how it is with me today. I hope it’s the same with you. Maybe your own sense of discovery is one reason you’re reading this book.

  Emerson’s quote, “What lies behind us, and what lies before us, are tiny matters compared to what lies within us” is a good thought to keep in mind. It allows your mind to think big because there are big reservoirs of ideas inside all of us. It’s a way to open the channels of creative thought, which leads to discovery and achievement. It’s also a reminder that no matter how much you’ve accomplished already, there’s still more waiting for you to get done.

  Maybe I’m a naturally curious person, but I think it’s a good attitude to cultivate. I like hearing what other people have to say, and I learn a lot that way, too. My interests are reflected in the diversity of businesses that I am involved in—real estate, the entertainment industry, golf course development, and so forth. Keeping yourself as diverse as possible can open you up to many more opportunities than you might imagine. Sometimes one thing can lead to another.

  You already know I’m not big on complacency, and I’m also not big on know-it-alls. The more you know, the more you realize how much you don’t know. Having this attitude is a great way to set yourself up for some big success. To be any other way is to sell yourself short. How can you possibly discover anything if you already know everything?

  People who come into my office for the first time are often surprised by how many questions I ask. I remember when I had three bathroom sinks on a couch just outside my office for a few weeks. I had to decide which one I liked the best, so I asked every person who came in fo
r their opinion and the reasons behind their choice. You’d be amazed at how much that opened up conversation and discussion, and I learned some very insightful things about these people and their tastes.

  Give yourself a chance—cultivate a sense of discovery.

  16

  KNOW WHEN TO CUT YOUR LOSSES

  TRUMP SHUTTLE

  How do you decide when it is smarter to bail out than to keep paddling?

  As businesses go, I’d rate the airlines as a great idea if you want a lot of trouble, too much competition, too much work, and all for too little profit. Recently, we saw what happened to JetBlue. They’d had a great record, very pleased passengers, and one ice storm knocked their reputation and their credibility completely off the runway. Their popularity plummeted and they had to issue a public apology to passengers for their mismanagement. I thought, “that’s the airline business for you.” Even Delta Airlines, which has been established for a long time, is just recently coming out of bankruptcy.

  The reason I can wince knowingly about these episodes with airlines is that I owned one, from 1989 to 1992. It was known as the Trump Shuttle, and it was originally a part of Eastern Air Lines. We had flights from LaGuardia Airport in New York City to Boston and Washington, DC, on an hourly basis. I got into the business initially because Eastern Airlines was having trouble in the late 1980s and it began selling its routes, including its northeastern air shuttle. This route was heavily traveled and I knew it could be successful. It just needed to be buffed up a bit, to make the travel time a bit more luxurious for the passengers.

  My previous experience with air travel was that I owned a helicopter service that provided flights to Atlantic City, La Guardia, Manhattan, the Hamptons, and Hartford and I also had a private jet. I knew the conveniences that a traveler would want to have. I made the new shuttle top of the line and technologically savvy, with one of the first self-service check-in kiosks, and it had laptop computers available to rent. The 727s were completely redecorated with maple wood trim inside and beautiful fixtures. I was the first to provide real luxury for shuttle passengers, who had been used to no-frills transportation.

  THE LOW POINT

  We hit a perfect storm. I went into this business knowing that Eastern Airlines was in trouble, and in fact I acquired the shuttle during a threatened mechanics strike. Let’s just say there were problems, but I’m used to problems, right? Well, airline problems are another story entirely. The labor strike happened, and it went on long enough that we lost a lot of passengers to Amtrak as well as to the Pan Am Shuttle. In addition, we were entering into a recession, and then in 1990, jet fuel prices sky-rocketed due to the Iraqi invasion of Kuwait. If it wasn’t one thing, it was another. It’s such a delicate business that the slightest tremor in world politics, economics, labor, or the weather—and a hundred other variables—can make a bright future suddenly tumble.

  As you know, I was having some financial problems around this time that would begin to escalate, not diminish, due to the recession that had hit. My total demise was predicted in 1991 by the Wall Street Journal and the New York Times. I had several big things falter, but this wasn’t 1991 yet, it was 1990. I was sure Trump Shuttle would take off and avoid the recession. I was wrong. Trump Shuttle never turned a proper profit, and as my other business interests started to fail, my creditors were less than enthusiastic about my latest venture. In September of 1990, the ownership of the airline went to Citicorp, the airline’s creditor bank. It’s a complicated story, but to make it short, Trump Shuttle finally ended as such in April of 1992, and it was merged into a new corporation, which US Airways bought.

  I have to admit I was relieved to be out of that business. The timing wasn’t right, but as I’ve watched the airline industry, I wonder if the timing is ever right. Making a profit isn’t easy, and it’s a demanding and volatile business. That’s why I find it hard to believe that Richard Branson, the owner of Virgin Air, has made any money at all with his airline. Fortunately he has other businesses, or I don’t think he’d be where he is today financially.

  In the instance of Trump Shuttle, I know I did what was right to make it a successful and desirable business. I made the experience better for the traveler and introduced some innovations. It didn’t matter—the outside forces were too great. It’s one of those instances when you know the best decision is the decision to leave, to cut your losses and move on to something else. It was a great learning experience—of what business not to go into. I’m perfectly happy now with my own planes. I rarely fly on commercial airlines and I can’t say I miss it. I certainly don’t miss the business.

  COACH TRUMP

  MAKE IT HAPPEN IN YOUR LIFE

  Sometimes you work as hard as you can on something, and it doesn’t work out. The question is: How do you know when to give up? I usually tough it out longer than most people would in a similar situation—which is why I often succeed where others have failed. I also know that sometimes you have to throw in the towel. Maybe you failed, but you probably learned something valuable. Chalk it up to experience, don’t take it personally, and go find your next challenge!

  17

  BUSINESS IS ABOUT KNOWING THE WORLD

  There are probably a million definitions of what business is, what it isn’t, what it’s about, how it works, and so forth. Years ago, I realized an important thing: Business is about knowing the world. That’s a big assignment. That realization opened me up to a myriad of great opportunities I hadn’t seen before.

  I started to see the world as an emerging market. That insight alone can improve your vision almost automatically (and vision is necessary for great success). In fact, if you can begin to see your neighborhood, your town, your state, as an emerging market, you will be surprised at how creative you will become. New ideas will come to you even though you know every street, every house, every tree. Newness of vision can be invaluable when it comes to business.

  When you suddenly get some great idea, ask yourself, “What am I pretending not to see?” That’s a good test for blind spots. Don’t throw out those sudden lightning-like ideas, but be circumspect about them.

  Knowing the world means seeing the whole picture. That is definitely preferable to seeing a narrow slice of life and being content with a small amount of local knowledge. What we don’t know can be as important as what we do know. If that thought doesn’t make you endlessly curious about the wide world, I don’t know what will. It’s imperative to keep the big picture in mind and stay hungry for learning more, if you want big success.

  I have had a “think big” attitude for a long time, even when I was determined to succeed in Manhattan as a young man. That was an immediate goal. The ultimate goal was a bit more universal. However, you have to do first things first. Now I am developing in many countries throughout the world, and the Trump brand is known globally. That’s no accident.

  Aside from great determination and a strong will, I have to say that understanding the realities of how the world works, including a sense of world history, is a necessary ingredient for wide-ranging success. There may be flukes that will occur that catapult individuals to fame or fortune, but most often you will find that people who have operated on a large scale and remained diligent and successful for a long time also have a broad understanding of world.

  I think the way technology drives business around the world today is an example of this. Visionaries saw all of this happening before most of us had given it a thought. The Internet has brought the world together in an exciting and efficient way, and all of us, worldwide, are affected. Technology is growing so rapidly that it’s hard to keep up with the changes, even if you’re in the industry. People have said, “but is all this change really necessary?” My answer is that refrigerators aren’t really necessary, the world functioned without them for many centuries, but they sure were a great invention. In fact, for many years, countries’ reputations were in part based on whether they had refrigeration or not.

  Emerging markets is a
term very often associated with Wall Street firms. They have entire departments dedicated to fast-growing markets in developing countries around the world. Places like China, Brazil, Russia, Korea, and so on are making a big impact on the world economy. If you live in this world, it’s a good thing to know something about it because it will most likely affect you and your business goals.

  My advice is to change your compass from local to global—while minding your local business. It may take an extra hour a day, but I can assure you it will be well worth your time and effort. How do I know this? What country do you live in? Have you ever heard of Trump? There’s your answer.

  18

  IF YOU THINK YOU CAN COMPLETE A SIX-YEAR PROJECT IN SIX MONTHS, YOU PROBABLY CAN

  Wollman Rink, Central Park, New York City

  Very often, what I want to do involves a lot of other organizations and a lot of bureaucracy. They say you can’t fight city hall, but I have no problem going against conventional wisdom. Think for yourself and go ahead and fight, especially if it means enough to you. This particular fight had a personal element to it—the view out my living room window.

  My apartment in Trump Tower overlooks the historic and scenic Wollman Rink in Central Park. It’s a beautiful winter scene to look out and see it filled with ice skaters—except that for six years it was closed, and to look at the empty rink for six winters in a row finally got to me. This is a story about doing something that wasn’t going to be easy, in fact it was deliberately walking into a mess, but the end result would be a happy story for a lot of citizens in New York City as well as thousands of visitors. It was a labor of love that also turned out to be one of my favorite accomplishments.