Trump
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TRUMP
TRIUMPHS!
TRUMP
THE ART OF THE DEAL
“THE GAMESMANSHIP OF DEALMAKING IS HIS SPORT.… Like him or hate him—just don’t ignore him … Cary Grant had his accent; Clark Gable his pencil mustache. Donald Trump has his money and power, and like the other romantic heroes, he knows what to do with them … we are swept into the romance.”
—Chicago Sun-Times
“FASCINATING … WHOLLY ABSORBING … conveys Trump’s larger-than-life demeanor so vibrantly that the reader’s attention is instantly and fully claimed.”
—Boston Herald
“A CHATTY, GENEROUS, CHUTZPA-FILLED AUTOBIOGRAPHY AND HOW-TO GUIDE.… As Trump defines deal-making—something he clearly loves more than anything else in the world—one of the most important factors is the ability to deliver the goods. And he does in The Art of the Deal.”
—New York Post
“THE MAN HAS FLAIR.… It should be read because Trump is one of the Great Characters who help define New York’s peculiar urban style.”
—The New York Times Book Review
“A COMPELLING ACCOUNT of a man who used what he gleaned from his father to become one of the richest and highly visible men in the nation.”
—Chattanooga News-Free Press
“TRUMP UNVARNISHED—AMBITIOUS AND UNAFRAID. I found it fascinating all the way.”
—MIKE WALLACE, CBS News
“ONE OF THE MOST STREETWISE BUSINESS BOOKS I HAVE EVER READ. An unguarded look at the mind of a brilliant entrepreneur. Donald Trump is blunt, brash, surprisingly old-fashioned in spots and always an original.”
—Milwaukee Journal
“FAST-PACED PROSE ABOUT A NO-NONSENSE COMER. Want to make a deal? Or be a big-time real estate tycoon? If so, here is a handbook by a master wheeler-dealer and consummate real estate entrepreneur that might give you some ideas.”
—Virginian-Pilot and Ledger-Star
“DONALD TRUMP IS A DEAL MAKER. HE IS A DEAL MAKER THE WAY LIONS ARE CARNIVORES AND WATER IS WET.”
—San Diego Union
“THE HOW-TO MEMOIRS OF A MODERN MIDAS.”
—The Boston Globe
“READS LIKE A NO-HOLDS-BARRED ACCOUNT.… The world it reveals—the world of ‘doing deals’ and moving casinos and hotels around like so many pieces on a Monopoly board—is wonderfully glamorous.”
—New Woman
“IF YOUR GOAL IS TO MAKE A MILLION, READ THIS BOOK.”
—Times Picayune, New Orleans
“BOASTFUL … BOYISHLY DISARMING … THOROUGHLY ENGAGING … offers an inside look at aspects of financing, development and construction in big-time New York real estate.”
—Publishers Weekly
“TRUMP WRITES CANDIDLY AND AT TIMES BRASHLY OF HIS WORLD OF HIGH DEALING. The result is a fascinating look at a hustler who credits success to hard work, the art of persuasion and creative imagination.”
—Worcester (MA) Sunday Telegram
“HIS LIFE STORY IS WORTH WRITING AND WORTH READING.”
—Tulsa World
“AN ENGAGING ACCOUNT OF LIFE AS A MAJOR-LEAGUE HUSTLER.… Candid (to the point of bluntness), Trump offers insights as well as intelligence on what it takes to succeed in big business.”
—Kirkus Reviews
“OFFERS A PRIMER FOR THOSE WHO WOULD FOLLOW HIS PATH TO THE TOP.… Trump’s life is dramatic proof that the rewards are there for those who dare.”
—The Berkshire Eagle
“HE IS THE LATEST OF A BREED UNIQUE TO THIS DECADE—A SUPERSTAR MEMBER OF THE BUSINESS WORLD. Trump: The Art of the Deal may be worthwhile just for the insight it gives on life in the big league.”
—Toledo Blade
“A CANDID LOOK AT HOW THIS ENFANT WONDERFUL OF REAL-ESTATE DEVELOPMENT DOES IT ALL.”
—Cosmopolitan
“A SIZZLING READ.… He names names, spells out the zeros and fully reveals the deal-maker’s art.”
—South Bend Tribune
“TRUMP DEALS A WINNER … WORTH READING.”
—Wilmington Evening Journal
“AMERICA’S MOST GLAMOROUS YOUNG TYCOON REVEALS HIS SUCCESSFUL GAME PLAN … [and] even those who have little interest in real estate, New York politics or get-rich formulas will have to admit that this book is fun to read.”
—San Antonio Express and News
“THE MOST DOWN-TO-EARTH … GUIDE TO MAKING A BILLION YOU WILL EVER READ.”
—The Washington Times
Also by Donald J. Trump
Surviving at the Top
The Art of the Comeback
The America We Deserve
How to Get Rich
Think Like a Billionaire
The Art of the Deal is a commonsense guide to personal finance. In practical-advice books, as in life, there are no guarantees, and readers are cautioned to rely on their own judgment about their individual circumstances and to act accordingly.
A Ballantine Book
Published by The Random House Publishing Group
Copyright © 1987 by Donald J. Trump
All rights reserved.
Published in the United States by Ballantine Books, an imprint of The Random House Publishing Group, a division of Random House, Inc., New York, and simultaneously in Canada by Random House of Canada Limited, Toronto.
Ballantine and colophon are registered trademarks of Random House, Inc.
www.ballantinebooks.com
eISBN: 978-0-307-57533-3
v3.1_r3
To my parents—Fred and Mary Trump
Acknowledgments
I owe special thanks to several people who made it possible for me to complete this book in the face of my other responsibilities. Ivana Trump, my wonderful wife, and my three children were understanding about the many weekends that I spent working on the book. Si Newhouse first came to me and convinced me to do a book despite my initial reluctance. Howard Kaminsky, Peter Osnos, and many others at Random House have been enthusiastic, energetic supporters of the book.
Tony Schwartz wishes to thank the many people who gave generously of their time, in particular, Robert Trump, Der Scutt, Nick Ribis, Blanche Sprague, Norman Levine, Harvey Freeman, Tony Gliedman, Al Glasgow, John Barry, and Dan Cooper. For typing, photocopying, copyediting, research, and fact checking, thanks to Ruth Mullen, Gail Olsen, Adina Weinstein, Deborah Immergut, and Nancy Palmer. Without Norma Foerderer, sweet Norma, running interference for me, I never could have gotten the time and access I needed. My agent, Kathy Robbins, is the best at what she does, but also much more: editor, cheerleader, confidante. Ed Kosner, the extraordinary editor of New York, has long been a source of ideas, inspiration and sage counsel. My children, Kate and Emily, are a joy, a challenge, and an inspiration. My wife, Deborah, is the most supportive person I’ve ever known, my first editor, my best friend, and—after ten years still the love of my life.
Contents
Cover
Other Books by This Author
Title Page
Copyright
Dedication
Acknowledgments
1. Dealing: A Week in the Life
2. Trump Cards: The Elements of the Deal
3. Growing Up
4. The Cincinnati Kid: Prudence Pays
5. The Move to Manhattan
6. Grand Hotel: Reviving 42nd Street
7. Trump Tower: The Tiffany Location
Photo Insert
8. Gaming: The Building on the Boardwalk
9. Wynn-Fall: The Battle for Hilton
10. Low Rent, High Stakes: The Showdown on Central Park South
11. Long Shot: The Spring and Fall of the USFL
12. Ice Capades: Rebuilding Wollman Rink
13. Comeback: A West Side Story
14. The Week That Was: H
ow the Deals Came Out
About the Author
1
DEALING
A Week 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. Deals 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. I wake up most mornings very early, around six, and spend the first hour or so of each day reading the morning newspapers. I usually arrive at my office by nine, and I get on the phone. There’s rarely a day with fewer than fifty calls, and often it runs to over a hundred. 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 fifteen minutes. I rarely stop for lunch. I leave my office by six-thirty, 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
9:00 A.M. My first call is to Alan (“Ace”) Greenberg, on the trading floor of Bear Sterns, a major Wall Street investment banking firm. Alan 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 Inns. It was selling in the 50s. As of this morning, Alan tells me, I own just over one million shares, or slightly more than 4 percent of the company. The stock closed Friday at $65 a share, mostly, Alan 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 control of Holiday, which I think is somewhat undervalued. At the current stock price, I could get control for less than $2 billion. Holiday’s 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 jobs.
9:30 A.M. Abraham Hirschfeld 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 hand-picked candidate, Stan Lundine. Cuomo led a court fight to get Hirschfeld off the ballot on technical grounds, and sure enough, halfway into the campaign, the court ruled Hirschfeld 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.
10:00 A.M. I call 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 Brokaw about this adorable little lady from Georgia, Mrs. Hill, who was trying to save her farm from being foreclosed. Her sixty-seven-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. Tramp.” Mrs. Hill and Frank Argenbright 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 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’ve 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 U.S. 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 one dollar. I’ve already let the better players on my team, the New Jersey Generals, sign with the NFL. But the ruling was 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 Gerry Schoenfeld, head of the Shubert 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 Gerry 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 Gliedman stops by to discuss the Wollman Rink project. Gliedman was housing commissioner under Ed Koch. 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 Wollman 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’s 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 n
ews organizations have RSVPd yes. So much for my news judgment.
2:00 P.M. I get deposed in a lawsuit we’ve brought against a contractor on Trump Tower. Halfway into the job we had to fire 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’ve 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.
3:00 P.M. I ask Norma Foerderer, 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 Iacocca 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. I own a house in Palm Beach—a spectacular place called Mar-a-Lago—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 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.