As Donald Trump, the world's most famous multifamily developer, continues to his run to the Republican nomination for president, the editors of Multifamily Executive went through their archives to pull their interviews with Trump and stories about the developer and his family. Here's a piece that ran in the April 1998 magazine:
Listen to Donald J. Trump from behind his mahogany desk on the 26th floor of Trump Tower and you understand the drive that has made him one of the largest multifamily developers in New York City.
In the last 15 years, Trump has developed more than 1,100 of the city’s high-end multifamily units, leading the city’s residential comeback from the doldrums of the 80s. (An additional 6,300 units are under construction.) But the Trump name is more than brand identification.
“The Trump Factor,” a one-page addition to The Corcoran Group’s recently released 1997 report, backs up Trump claims that his properties command the highest prices in the market.
Trump’s sites sold for 76 percent higher than their Upper East and West Side counterparts, the report reveals. And in the fourth quarter of 1997, seven of the top 10 priciest condo sales in Manhattan were in Trump-owned buildings.
“We didn’t set out to do anything about Trump. What we found was that any building with the Trump name came up in the top 10,” says Anita Perrone, vice president and director of marketing at the Corcoran Group, New York-based market research firm which has no affiliation with the Trump Organization.
“They don’t even like me,” Trump says. But they gave him his due because “a phenomena has taken place that we’ve never seen before, he continues. “I think the primary reason for that is the quality of my construction, and people now know that my construction is so good, my locations are so good, the whole package is so good.”
This wasn’t the first time his properties have trumped the market, says Perrone. About eight years ago, the firm released a similar report. Chances are, it won’t be the last. Trump is in the process of developing the Trump Regent on the former site of the St. Moritz Hotel, building a 260-unit, super luxury condominium tower overlooking the Avenue of the American and
Trump originally bought the hotel for $70 million and sold it to Alan Bond for $180 million in the late 80s. But FAI insurance had to foreclose on the property. Now, the Australian insurance company and Trump have formed a joint venture for the redevelopment.
“I always like to go back to things that were good to me, and that was good to me,” he says. Sale prices for the development will be in the $900-plus per square foot range.
In partnership with Daewoo of South Korea, Trump is also developing the old Unit Engineering site, a block-long building across from the United Nations, into the 350-unit Trump World Tower. Prices for the condos, says Trump, will be similar to those at Trump international Hotel & Tower, where sales were more than $1,000 per square foot.
“I mean, these prices are unheard of as you know...you’re used to hearing $113.50,” he says.
And right now, Trump is also putting the finishing touches on the first two towers of his and New York’s largest multifamily development ever; the transformation of the abandoned West Side Railroad Yards.
“It’s a 5,700-unit job, a city within a city,” says Trump of the entire development. it’s going to be something truly spectacular. It’s the largest job ever approved by the New York City Planning Commission.
Rents for one-bedroom apartments are expected to be above the area average, for about $700 per square foot possibly the highest price in the area, says Michael Vargas, appraisal manager at Mitchell Maxwell & Jackson Inc., a New York-based appraisal firm.
“Trumps development tend to generate some of the highest prices because of his names,” says Vargas.
But the story of Riverside South, which Trump says will be called Trump Place, is a much about negotiation and compromise as it is about high rents and luxurious apartments.
It took the 52-year-old developer more than decade to make his way through New York City’s harrowing approval and zoning process.
“It took me years of zoning, environmental, all sorts of things,” Trump says. The normal development difficulties times 100 because of the magnitude of it, because of the impact of it, because of the size of the job.”
Trump originally bought the options to the West Side Railroad Yards, which run from 59th street to 72nd street along the Hudson River, in the early 70s, but at the time, he chose to work on other projects like Trump Tower and the Grand Hyatt hotel. The options expired in 1979. Then, in 1985, he bought the property again, this time from Argentinean developer Francesco Macri, for about $100 million.
Trump had lofty ambitious for the site, including the world’s tallest building and more than 18 million square feet of mixed-use developments. But community leaders balked at his plans.
“Lets face it, Trump has tendency to be outrageous,” says Richard T. Anderson, former head of Regional Plan Association (RPA) and current president of the New York Building Congress. “He originally started with a 150-story building, too much floor space, high density, blocking of views, five million square feet of nonresidential space, including a major shopping center that would have brought a large volume of traffic area...The plan was so flawed as to be incapable of revision.
Several community groups were considering litigation when a group composed of six civic organizations- including Anderson’s RPA- formed a coalition to come up with an alternative.
“Civic organizations always litigate,” explains Richard Kahan, who previously headed the New York State Urban Development Corp., and was asked to join the new coalition. “These groups came forward and said that it is not enough to stop the development. They said, “We need an alternative.”
That alternative, aptly called the Civic Alternative, was based on an old Robert Moses site plan the called for tearing down and rebuilding that elevated West Side Highway, says Linda Davidoff, former executive director of the Parks Council and member of the original coalition. The new highway would be an at-grade inward curving road crossed by pedestrian bridges, providing 22 acres of unfettered riverfront park.
The group commissioned a rendering of the site plan and presented it to the Trump Organization. But it was turned down because the company was already too far along with the original design, which had planned the building with the highway in mind, says Davidoff.
So, the coalition began lobbying officials to reject Trump’s plan, which required several zoning changes, and launched a lawsuit under federal environmental law to block the project, explains Davidoff. But as the coalition was beginning its litigation and lobbying efforts, Stephen Swid, head of the Municipal Art Society- also member of the coalition- made a personal appeal to Trump.
“Donald Trump recognized that he was facing years of litigation,” says Kahan. “He took visionary steps and went to negotiate with the civic organizations.”
After a few meetings reviewing the alternative plan and a “huge leap by Trump that said, 'Never mind, I’ll scrap the millions of dollars and time and energy I’ve spent on the original plan,'" retells Davidoff, Trump agreed to adopt Civic Alternative.
“He was the first person to ever recognize that the balance of power in New York City had shifted,” explains Kahan who has worked Trump on the Grand Hyatt project. “In the past, it was enough for developers to get government on their side. Trump realized that civic communities on his side were more important than government, because if the community approved the project, then government would have no choice but to get on board.”
Both sides attest that negotiations between Trump and the civic organizations were not easy. For me, the West side is a neighborhood with a strong voice.
It’s Seinfield land. It’s Woody Allen Country. It’s Bella Abzug’s old congressional district. It is an adamant, articulate, well organized, not easily intimidated group of people,” says Eleizabeth A. Cooke, executive director of the Parks Council and Riverside South planning Corp. board member.
So, Kahan - now a New York gubernatorial candidate- was selected as chair of the planning corporation, a go-between for the two sides, to deal with Trump one-on-one. “Kahan was a good person to be head because he is tough and knows when Trump is B.S.-ing us, and knew when we are overreaching with Trump,” says Kent Barwick, a trustee and former president of the Municipal Art Society.
Kahan agreed to chair the corporation in the one condition: with eight board members (and seven needed for quorum), he insisted that everyone- the leaders of the most powerful civic organizations in New York City and Donald Trump- had to be there in person. No stand-ins.
“The only way to work it out was if the individuals got to trust each other...if we worked hour after hour sitting around a table working out the details,” he says. “I’m going to pretend that there weren’t crosspoints when various people wanted to quit, but we held it together.”
The meetings continued for over two years, while both sides fleshed out the details. The result was a vastly dense site plan-with primarily only residential buildings. Plans for the world’s tallest building were scrapped.
In May 1992, the coalition began the unwieldy New York City approval process known as ULURP, the Uniform Land Use Review Process.
It’s an elaborate device for stage-managing dissent without giving communities any power,” says Barwick.
The project proposal must go through various city agency certifications and community hearings, as well as the borough president, the City Planning Commission and the New York City Council. “There are politics all through this phase,” he explains. And wants to extract a pound of flesh so they can say they did something.
Over the course, of the process, the group gave its presentation hundreds of times, to anybody who asked, says Catharine Cary former executive director of Riverside South Planning Corp. and WestPride, and the Westside residents’ coalition.
Initially, the Community Board voted- almost unanimously against it. So, Trump agreed to apply for federal 80/20 assistance, making 20 percent of the units of Riverside South affordable, in essence, a concession for the support of Ruth Messinger, Manhattan borough president, Trump says. If he does not receive federal loan guarantees, only 12 percent is required: 6 percent low-income, 3 percent moderate-income and percent middle-income.
Later, the City Planning Commission approved the project unanimously. And shortly thereafter the New York City Council approved the zoning of Riverside South 42 to eight.
“This was probably the toughest zoning change I ever had...Most people thought it was impossible to get it zoned because of the tremendous politics,” says Trump of the proceedings.
Victory At Last
Riverside South finally broke ground on the first building in February 1997; the second began in March. Mary Musca executive director of Riverside South Planning Corp., says about 12 acres of park will be built in the next year; two more towers will begin in the fall of 1998.
“Now, the only fly in the ointment is the highway not being moved because local congressman Jerry Nadler made a huge point of opposing “Trump’s evil project,” says Davidoff. He refuses to free up to the federal transportation money.” which the city needs to tear down the highway and rebuild it. (Congressman Nadler’s office declined to comment for this story.)
Musca and others close to the project say they are concentrating their efforts on securing money to move the highway. However, most of the involved parties were less than hopeful the funds would be released. “We have the support of Giuliani administration, the New York state senators and all major civic group,” says Musca. But we don’t have the local congressman.
And as a result of the local opposition, the project, funded by Trump and private investors in Hong Kong, is having trouble securing federal financing for subsidized units.
The first two buildings are entirely privately financed; one is all condos and the other is a rental building. Trump and his investors voluntarily contributed a 20 percent affordable component. HUD mortgage guarantees are being sought for the next two buildings.
In a way, says Kahan, the affordable housing component brings Trump back to his roots. “He and his family have created before he came to New York City, out in the boroughs more good housing for working-class people than probably anyone else in New York,” says Kahan.
The tragedy, say civic leaders, is that though the project is going forward, the two major civic components are being stalled indefinitely. But they are quick to point out that Trump who agreed to build the park and eventually deed the 25 acres of land to the city is not at fault.
“Trump stuck with the agreement and was ready to do battle with any forces that stood in the way,” says Davidoff. “He honored his commitment to the revamped project.”
Trump, for his part, seems happy just to have gotten the job done. “For 75 years, people have tried to build on that site and failed for various reasons,” he says. “And today, it’s tougher than it was 75 years ago, because today you have this whole new environmental hurdle much of it is nonsense and you have hurdles put in front of you that are bigger today than ever before. And I got it off.”