Step Right Up, The Donald Has a Deal for You

By Sydney H. Schanberg

First published  in Newsday, April 4, 1995

Step right up, cries the barker with the jaunty derby and twirling cane, don’t miss out on your chance of a lifetime. Donald Trump has a deal for you. Please come closer, folks, I have to whisper this: If you act quickly, Donald is willing to sell you $285 million in casino stocks and bonds. And, oh yes, before I forget, the Securities and Exchange Commission has asked me to advise you that the odds are you’ll never see this money again.

That’s right, Young Donald is offering anew to let you buy the heirloom lint that is the last remaining occupant of his pants pockets. He’s still buried in a mountain of debt, more than $100 million of it personally guaranteed. So naturally, being a man of the people, he would like you to bail him out before he has to do something vulgar, like filing for personal bankruptcy.

Such an act could shut him down as the gambling king of Atlantic City, since New Jersey law requires casino owners to have “financial stability.” The Trump Organization “owns” three heavily debt-burdened casinos there. All three have been losing money. That’s of course why Donald, as a financial sage, wants to expand them — with other people’s money.

As you know, Donald has been running these hustles for years, conning local governments into subsidizing his projects (e.g., Trump Tower got about $40 million from New York City in tax reductions) and conning banks and insurance companies into loaning him the construction costs. In case you still think that big-name bankers are an intelligent race, just look at the customer money they’ve thrown away on their judgment that Donald Trump was a stable businessman.

It’s helpful not to lose touch with Donald’s unstable history. Remember how he reneged on his agreement to renovate the subway complex below the Grand Hyatt hotel? Remember how, after trying the usual strong-arm tactics to roust legal tenants out of a building on Central Park South so he could tear it down, he then offered — surely out of profound humanitarianism — to put homeless people in the apartments that were vacant? And remember how, when he served as chairman of the New York committee to build a local Vietnam memorial, he offered to pick up most of the cost if only the veterans on the committee would agree to name it the “Trump” memorial?

More recently on Donald’s history channel, in 1990 he and his companies defaulted on $3 billion of debt. The banks put him on an allowance. Unfortunately, from his early days as a school truant, Donald has never been able to live within his allowance. Nothing has changed, so he’s always short of the cash he requires to keep his name on the party lists and in the gossip columns. As a result, he has had to resort to his legendary hustles.

According to an interesting story by David Cay Johnston in yesterday’s New York Times, Donald has met his personal needs only by drawing unusual fees from his main gambling joint, the Trump Plaza Hotel and Casino. Last year, he took a $572,000 fee for negotiating a lease of space to Time Warner in a planned expansion of the hotel — an expansion that was halted by a judge’s ruling last week. Time Warner has yet to pay anything for the lease and may never do so; it has the right to cancel the agreement within two years.

On that same planned expansion, Trump was also personally paid a $1-million “construction management services” fee to supervise demolition of the building next door.

Even this expansion is being financed with other people’s money — in this case, the public’s dough. There’s something in New Jersey called the Casino Reinvestment Development Authority (CRDA), and this body awarded Donald $14.6 million in tax credits, which represents more than a quarter of the $55-million expansion price tag.

CRDA also invoked eminent domain in condemning three privately owned parcels of land that Trump wants for the expansion. Last week’s decision by a New Jersey judge threw out the condemnation, noting that Trump had, after the fact, altered his expansion plan to include additional gambling space, instead of just additional hotel rooms. In essence, the ruling said that the condemnation of the $14.6-million award violated state policy because it represented a use of public monies for a private person’s benefit. Trump’s lawyers said they would appeal.

Meanwhile, in the event any of you are contemplating throwing some mad money at Trump’s proposed stock and bond offerings, I suggest you read the fine print of the documents he submitted to the SEC last week for review.

These papers, for example, caution potential buyers that “there can be no assurance that Trump will be successful in repaying or rescheduling his indebtedness or that his assets will appreciate sufficiently to provide a source of repayment for such indebtedness.”

Another chilling sentence reads: “Any failure by Trump to repay or reschedule his indebtedness or otherwise maintain financial stability may have a material adverse affect” on the payment of interest or return of principal.

Donald never wrote sentences like these in the heady days before he was under surveillance. He just took other people’s money and bought a yacht with gold fittings and cruised around as if he was something more than a hustler.

 

 

 

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Trump’s Latest Deal: Finagling Atlantic City

By Sydney H. Schanberg

First published in Newsday, September 9, 1994

Donald Trump is cheating at cards again, appropriately in Atlantic City. He’s trying to fleece some of their property so he can expand his Trump Plaza Hotel and Casino.

And not for the first time, he has managed to stack the deck: He has found a way to get the local governmental agencies to do his dirty work for him. As chiseling schemes go, it’s a doozy.

Here’s how the scam is structured. Trump is trying to buy up a while block adjacent to Trump Plaza to put up new hotel rooms, a parking lot, limousine pickup area and the like. He wants to cash in on the business generated by a $254-million convention center scheduled to open in 1996 a short distance from the Plaza, one of the three casinos he runs in Atlantic City.

But instead of negotiating with the owners of the private parcels he needs on the block, he got the Atlantic City Planning Board and the state Casino Reinvestment Development Authority (CRDA) to move in on the properties by edict. The planning board began issuing approvals for the project and CRDA started condemnation proceedings under the law of eminent domain.

CRDA’s rationale is that the casino expansion serves the community interest because it will support the new convention center. It’s not clear how Trump won the allegiance of these public officials — that will probably come out later, in some court proceeding, as often happens with Trump — but the result is a familiar one: Trump, the property shark and deal-maker is in line to get another freebie.

In short, the state (CRDA) plans to seize the private land at fire-sale prices, pay for it with taxpayer dollars and the hand it over to Trump for nothing, to profit from as he pleases.

Not surprisingly, two of the property owners facing condemnation have stood up to cry foul. One is Vera Coking, who has a small three-story house where she lives with her daughter, Barbara Torpey, under the shadow of Trump’s casino. The other protester is the Sabatini family, whose restaurant has sat for 30 years a little ways down the block on the prime corner of Columbia Place and Pacific Avenue.

Six years ago, the Sands casino company, which was then trying to develop the block, made an opening offer to the Sabatinis for $1.5 million. But that project died aborning. Now, though Atlantic City is bustling with development activity, CRDA says the property is worth no more than $700,000, setting that as its final figure.

CRDA’s appraiser reached this figure by comparing Sabatini’s restaurant to four other restaurants. The curious part about the comparison was that the four restaurants are all empty and out of business and none of them was in the busy casino district.

As for Vera Coking and her weatherbeaten house, CRDA set its price at $251,000. Penthouse’s Bob Guccione, another who tried to develop the block and failed, says he offered her $1 million. When she refused, he decided to build around her narrow lot and got the steel superstructure up before he pulled out. Now, several years later, CRDA says its condemnation price is $251,000. Coking’s lawyer says the property is worth $2 million.

Trump and his attorneys have tried to portray Coking, a widow, as a person who has put her personal gain above the interests of the city. Coking, responding, said: “There’s a lot of memories in here. I raised my kids in here. I’m not greedy. I just want a fair price.”

The Sabatinis are also pretty upset. “We’re not blocking progress,” said son Louis, 37, a doctor. “You can call it eminent domain and you can call it public good, but they’re trying to steal our property, and it’s rotten.”

“We’ve been good neighbors and good community members,” said his mother, Clare Sabatini. “We’ve been here for 30 years, in lean times as well as good ones. We made sacrifices to put four kids through college. All we want is a sensible offer.”

The Sabatinis and their own appraiser came in with a property value that was at least three times the $700,000 price set by CRDA.

When CRDA held a meeting last month on the condemnation decision, Trump’s cozy relationship with the government officials became quite clear. Instead of sitting in the public seats, he entered at CRDA’s end of the room and stood directly behind the board members, facing the audience. Trump and CRDA were one. 

Another tip-off: Under the law, it was supposed to be a public hearing with questions allowed from anyone, but when the attorneys for Coking and the Sabatinis tried to raise several issues, they were cut short and the meeting was quickly adjourned with a bang of the gavel.

There are still some innings to go, among them a review process to examine the legality of the condemnation and the fairness of the money offers. If dissatisfied with those results, a landowner can seek a jury trial to set the price on the property. Judging from the rigged deal we’ve seen so far, Coking and the Sabatinis may have to go all the way.

In civics class way back when, we were always taught that eminent domain could be invoked only for a public purpose. In Atlantic City, we are watching it being used to benefit a private person, Donald Trump. 

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It Takes a Big Man to Make Big Promises

By Sydney H. Schanberg

First published in Newsday, September 11, 1987

Every time you look up, there he is — the world’s most successful public relations man. He’s in Moscow trying to talk the Communists into luxury-hotel capitalism. He has become the gambling king of the East Coast and is now reaching for a casino in Australia. He says he is John Cardinal O’Connor’s adviser on real estate, and according to one published account, gave the cardinal as a character reference on his application for a Nevada gaming license. He has issued a kind of press-release foreign policy, and a Republican operative in New Hampshire is trying to draft him for presidency.

That’s not even the quarter of it. He recently bought his own private Boeing 727 with two bedrooms and a sauna, after which he commissioned the world’s longest limousine. He continually makes big rolls on the stock market, manipulating certain prices higher, at which point he sells for impressive profits. For all his wealth, he manages to get big tax abatements on his luxury apartment projects in New York City. He feuds with the mayor and calls him a moron and worse. His autobiography, “Trump by Trump,” is due out this winter. And there’s got to be a sequel, because he’s only 41 years old. 

The part I like best about Donald Trump is his deep and abiding concern for the homeless and the poor. He never misses an opportunity to tell us — in print, on radio and on television — how every upset he is about the working-class people who can’t afford decent apartments at the going rates and about those who end up completely shelterless, living on the streets. It’s terrible, he says, as he dedicates his latest condominium tower for the moneyed, with his name in giant letters on it. 

And even last week, when he purchased full page ads in The New York TimesThe Washington Post, and The Boston Globe calling for more “backbone” in America’s foreign policy, he took care to include an expression of his pain over the plight of the troubled among us. He said we ought to stop carrying wealthy nations like Japan and Saudi Arabia on our backs and instead make them pay us for defending them militarily in the Persian Gulf and elsewhere. Then we could take these billions of dollars and use them to “help our farmers, our sick, our homeless.”

It cane as no surprise that Mayor Edward Koch, another public-relations virtuoso and thus a rival of Donald Trump’s for the world title, sneered at the foreign-policy ads and said that as a politics, Trump was “a flop” and “a schoolboy.” Trump responded by calling Koch a “jerk” and “a loser who will go down as the worst mayor in the history of the city.”

They’ve gone through this routine before, so it’s quite polished by now. In their last go-around, which had something to do with Trump’s grab for big tax abatements, the mayor called him “Piggy, Piggy, Piggy” and Trump purred back with “moron.” It’s not always easy to understand their splitting matches, given that they’re so much alike in their religion: Mirror Worship. Not only that, but Koch is just as verbal a champion of the downtrodden as is Trump — so that’s something else they have in common.

Nonetheless, yesterday brought a new chapter in the sandbox war. Trump, smarting over Koch’s barbs about his international views, volunteered some insults about Koch’s plans to visit Nicaragua as head of a fact-finding group. “How can our idiot mayor go to Nicaragua,” Trump asked, “when he can’t even run New York City? The man is totally incompetent…” and more of the same.

The only thing Trump left out this time (he must have been so overwrought he forgot) was a sentence about poor people.

After he got through reading his anti-Koch remarks to a New York Newsday reporter, he said, “I know you guys like this kind of stuff.” He’s right. That’s what makes him the master of public relations that he is.

He can deny all he wants any designs on the White House, but Trump has the kind of instincts that are perfect for the age we live in — the age of stage smoke and magic mirrors and imagery. He looks out and sees public-relations mayors and public-relations senators and a public-relations president. In short, he sees the kind of men we admire and elect these days and he naturally asks: Why not me?

For example, he offered us a couple of years ago his belief that he could do a better job at negotiating arms control with the Soviet Union than “the kind of representatives that I have seen in the past.” Blowing high-grade smoke, he added: “It would take an hour and a half to learn everything there is to learn about missiles. I think I know most of it anyway.”

When Trump bought Resorts International’s casino and extensive properties in Atlantic City earlier this year, he said he felt a sense of social responsibility to the slum-ridden New Jersey casino city and was therefore going to build housing there for families with small pocketbooks. “With the vast land holdings we now have, we want to create some moderate and low-income housing on a private basis,” Trump said. “So far, nobody has been able to do it, but we have an opportunity now and we are making a commitment to do it.”

That was on March 19. On July 23, he amended his pledge. He said that Resorts had big financial pressures and “must straighten out its affairs” first. This meant, he said, that until he completes the costly Taj Mahal — a new casino that he has under construction, which will be the world’s largest — the low-income housing will have to wait.

The March commitment got substantial news coverage; the July pullback was hardly noticed.

In an age where smoke is everything, Donald Trump can blow it with the best of them.

 

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It’s Time For Trump to Leave Havelot for Camelot

By Sydney H. Schanberg

First published in Newsday, October 23, 1987

Some people think it was bad taste for Donald Trump to announce that he had just made $175 million on the stock market and gotten out early, before Monday’s great crash. It was callous and unfeeling, they said, to boast about your high-rolling profits while little people, small investors, were holding their heads and watching their modest nest eggs shrivel and fade into painful puniness.

These critics just don’t understand Donald. He wasn’t rubbing it in. Sure, he asked his public relations representative, Howard Rubenstein Associates, to call all the newspapers and tell them Donald had been smarter than the rest, that he had not only avoided loss but had walked off with a fifth-of-a-billion gain. But all Donald was trying to do by bringing his good-fortune story to the attention of the media was set an example. That’s all he ever wants to do. He wants to show us what brains and competence can accomplish.

Just follow my lead, he keeps saying to all of us. Heaven knows we need role models. I have only one beef. We would have appreciated this stock market escape a lot more if he had told us about it while he was bailing out, when we too could have grabbed a bailing can, instead of after the fact, when we were no longer afloat.

But this probably never occurred to Donald, what with all the foreign affairs and social issues that are on his mind. Last month, when he took out full-page ads in The New York Times and other major papers to criticize American foreign policy for its lack of “backbone,” a Trump aide explained: “Donald is drifting toward a greater social role, that’s why he purchased the ads. It’s that perfectionist thing in him. He sees things that could be better and asks why not.”

Could it be that Donald, the builder of castles, is dreaming of leading us back to Camelot? Or is it Havelot?

You see, as outlandish as this may sound, there are people who think Donald behaves ostentatiously and crassly, flaunting his wealth, boasting about his deals, asking the public to measure his self-worth by his net worth. Then, too, he throws major tantrums when he doesn’t get his way — suggesting an errant child more than an incipient national leader.

Yesterday, he was in New Hampshire, the state of the first presidential primary, addressing a group of Republican leaders on cosmic issues — the trade deficit, the Persian Gulf, etc., etc.

But in New York earlier this week, his lawyers were in court trying to evict an old lady from one of his buildings. He’s been trying to throw her out since he bought the place in 1981. There’s nothing very cosmic about a landlord trying to force a tenant out; it’s known as good old greed. The two bedroom apartment at 100 Central Park South falls under rent control, so the monthly rent is only $203 — and Donald, if he gets the woman out, can sell it as a condominium for a very large amount. 

It’s hard to reconcile $175-million scores on the stock market with grubby attempts to evict old ladies. I guess that’s why the Howard Rubenstein public relations company didn’t mention the eviction proceeding when it called the newspapers to report Donald’s Wall Street winnings.

For the record, the tenant’s name is Suzanne Kaaren Blackmer. She’s 74. She’s been in the apartment since 1945. She is the widow of the actor Sidney Blackmer and was an actress in her own time. She says her income is mainly from Social Security and a small pension from the actors’ union. She is represented by a lawyer from a legal services office for senior citizens.

Trump contends that her primary home is in North Carolina; she says the apartment has always been her home. The case will be decided in the courts, but one wonders why Donald, with assets maybe as high as $3 billion, engages in such petty pursuits. Is it because he can’t stand losing, no matter how small the issue? Or is it because he thinks we are so blinded by the rays from his piles of gold that we simply won’t see the seamy side of his activities? Given the state of national manners and our worship of profit and those who amass it, maybe he’s right. The cover stories that lionize him would suggest this.

My guess, however, is that Donald Trump’s almost desperate search for public approval will have no lasting result until he actually does something of social value. People may envy a Midas, or even someone who has built a Midas image through hype, but envy does not necessarily carry respect or liking with it.

Donald has passed up all sorts of opportunities to win the respect of New Yorkers. For example, he expresses constant distress about the homeless problem, but makes no move to build housing for the homeless, or even low-income housing. 

But he has not run out of chances to be remembered positively forever. Right now, on the largest undeveloped tract in Manhattan, a 76-acre stretch along the Hudson River on the Upper West Side, he wants to erect the world’s tallest building at 150 stories, plus 11 other skyscrapers, plus a hotel and a giant shopping mall. The project — with the thousands of people and vehicles it would draw — would quite simply drown the surrounding community.

Donald Trump, with all his winnings, could donate the land to the city as a great park. It could be an extension of historic and important Riverside Park. New York hasn’t seen a gift like this in ages. A grateful city might even name it Trump Park.

Talking about his material successes in his forthcoming autobiography, Donald Trump writes: “I don’t do it for the money. I’ve got enough, more more than I’ll ever need. I do it to do it. Deals are my art form.” 

Do the biggest deal of your life, Donald. Create a work of art, create a great park.

 

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