Donald climbs off the deck; profile
An inspired gamble has resurrected the fortunes of New York's most colourful property magnate.
Sunday 18 August 1996
True, Trump is not the mighty player he once was. On most days at New York's La Guardia airport you can spot parked close to the perimeter the shiny black Boeing 727 airliner that is his own private jet (replete inside with red velvet armchair seats and chocolate-box oil paintings). The fleet of planes that used to make up the Trump Shuttle has long gone. Nor can he any longer call the luxury Plaza Hotel in Midtown his own.
But if the Donald Trump of the Nineties is not the extravagant model of a decade ago, he is diminished only in relative terms. A reminder of his new-found confidence came with the unveiling last week of a characteristically ambitious plan to offer new digs to the New York Stock Exchange. The NYSE has admitted that it would like to abandon its landmark Renaissance home on the corner of Wall Street and Broad Street, which has grown too cramped and dilapidated.
Trump's proposal is a stunner. His complex would include a 250,000 square foot pavilion that would house the NYSE's new trading floor and an adjacent tower that would soar 1,792 feet into the Manhattan skyline, making it the biggest occupied building in the world, 424 feet taller than the towers of the World Trade Center. It would also dwarf the Petronas Towers in Kuala Lumpur, which, at 1,476 feet, recently claimed the title of the world's biggest building.
The comeback offers a new volume in what was already an extraordinary life story. Recently turned 50, a teetotaller and non-smoker, Trump was born with property business in his veins - as well as some feisty Scottish spirit. The latter came from his 87-year-old mother, Mary MacLeod Trump, a native of Isle of Lewis in the Hebrides. When, a few years ago, she was admitted to the emergency unit in a New York hospital after a mugging incident, nurses and doctors were baffled by her semi-conscious speech. It transpired that in her anguish she had reverted to speaking in Gaelic.
Mary met Fred Trump, Donald's father, during a holiday in New York just after World War One. She later returned to marry him, and the young couple quickly built a rental empire in New York's outer boroughs of Brooklyn and Queens. A milestone of their success was the introduction of the first coin-operated laundry facilities inside their apartment blocks. Friends have often said that Donald derives his energy and enthusiasm for mega-buck deals partly from a need to outstrip the achievements of his millionaire parents.
Less sympathetic critics would point to the scale of his ego as the principle motivator of his ascent to become, by the mid-Eighties, New York's most opulent and talked- about property magnate. His assets ranged from the Trump Tower on Fifth Avenue - which housed (and still does) his private triplex apartment - the Plaza, the airline, a $10m (pounds 6.5m) mansion in Palm Beach, Florida, a luxury private yacht, the Trump Princess, and the Grand Hyatt in New York.
In 1989, Forbes Magazine estimated Trump's personal worth at $1.7bn. He was also the husband of the super-glamorous Ivana and father to their three children, Donny, Ivanka and Eric. Adding to the legend were stories of impulsive generosity - one such (probably apocryphal) tale had him paying off the mortgage of a stranger who helped out when his limousine broke down in open country - as well as his Howard Hughes-like phobia of catching germs and consequent obsession with washing his hands when among the public.
Still more dramatic, however, was his subsequent tumble into financial and marital mayhem. The saga of how Marla Maples, the blond model, slowly displaced Ivana from Donald's bed (the "best sex I have ever had" she famously said of his bedroom performance) became this city's tabloid obsession for half a decade. Donald and Ivana were divorced in 1990 (she making off with $10m and his Connecticut mansion). Marla produced a child in the summer of 1993 and finally spliced with Donald in December of that year.
His financial nadir came at the turn of the decade. Massively over-extended with loans and caught by the spiralling decline of New York property values, Trump found himself at the mercy of a consortium of banks that was threatening to seize his every asset, from the Manhattan properties to his Atlantic City casinos. His personal debts totalled almost $1bn and the consensus emerged that he, like the other icons of the runaway Eighties, Ivan Boesky and Michael Milken, was finished. Another Trump myth describes him spotting a beggar one lunchtime outside the entrance to the Plaza. "That bum isn't worth a dime, but at least he's at zero," the fallen tycoon is alleged to have remarked to an adviser. "That puts him $900m ahead of me."
Guided by Stephen Bollenbach, who was hired from Holiday Corp in 1990 to be his chief financial officer, Trump set about his resurrection. Assets were quickly disposed of, including the East Coast Trump Shuttle that was sold to USAir. (The Plaza was sold more recently, although Trump still retains a 10 per cent interest.) Meanwhile, he launched a relentless campaign to win back from the banks his equity in his Atlantic City casinos. It was a battle he eventually won in part because he, not the banks, had the hard-to-get gambling licences to operate in New Jersey as well as the familiarity with the murky culture of the gambling world that most bankers would naturally shy away from.
With his bet on Atlantic City, Trump essentially saved himself. The seaside resort, within driving distance of Philadelphia and New York, now takes in $3.7bn annually in gambling revenue, 20 per cent more than the better- known strip in Las Vegas. With his three Atlantic City casinos - the Trump Plaza, the Trump Castle and the Taj Mahal - Trump accounts for almost a third of those takings. "It was all luck," he conceded. "I could have been wrong. But I was right."
Trump's resurrection matured with a public offering of shares in his company, Trump Hotels and Casino Resorts, in June last year. He now holds almost 40 per cent of the company and he is enjoying new-found personal wealth - his net worth is estimated at least $700m. His old thirst for trophy properties wholly owned by himself has given way, meanwhile, to a strategy of franchising his brand name to projects financed by others. No one is laughing now at anything Trump proposes. "Why not?" asked New York analyst Marvin Roffman, at Roffman Miller Associates in New York. "He literally came back from the dead in 1990. He is the king of Atlantic City."
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