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Industry: Trump plan can happen ... not soon.

While the uncertainty of the approval process is over for Donald Trump and his $3 billion Riverside South project, the question remains -- will he ever get the financing to make it a reality. Among real estate professionals last week the feeling seemed to be that eventually, when market conditions improve, he will be able to demonstrate demand to lenders.

The New York City Council last week approved the major West Side development, stretching from 59th to 72nd Streets along Riverside Drive, by a margin of 40 to 8. Trump will need to commence the plan, which includes 16 residential towers and a 21.5-acre park, within six and a half years. If the project is properly zoned, he will probably sell parcels to other developers who want to take part in the vision.

To City Council members and many in the real estate industry last week the prospect of financing was insignificant. Trump's project to them is a symbol of hope for the downtrodden real estate industry and the recession-weary city.

With virtually no construction underway and little else planned, Riverside South holds the promise of much needed jobs and contracts.

The project also has going for it a developer who, though he has had his own troubles, is still admired for his vision, his creativity and his nerve. In an address to the Associated Builders & Owners last week, Trump noted that, after a hiatus of building in the city in the late 70's, he was a trailblazer in the early 80's with his Grand Hyatt Hotel.

Trump has said he is confident he can erect the first cornerstone building at 72nd Street and the new Riverside Drive by next year.

Peter Haeffner, president of Sonnenblick-Goldman Company, is one who believes Trump will some day get the required funds.

"My guess is it can't happen quickly but it will happen primarily because the supply and demand factors will be in balance," he said.

Haeffner also stressed the value of the project for the industry and the city, and he anticipates Trump will get a lot of help.

"The best minds in the city will figure out how to get it," he said.

The project, Haeffner said, should not be thought of as 16 residential towers. There will be a number of phases, he said, as well as a number of developers.



Since Trump will most likely be under pressure to begin the residential portion of the project first, said Bill Shananhan, director of the Financial Services Group at Cushman & Wakefield, his prospects for financing are relatively better.

"Residential is looked at as one of the most favored by the lenders today," he said.

In regards to office construction, Shanaban said, Trump will not get a significant involvement from a lender without a major commitment from a tenant. It is not likely, he said, that the industry will see a scenario like Times Square where Prudential and Park Tower stepped in and committed funds for the four office towers.

"It's going to be a lot more selective," he said.

As for the tremendous infrastructure work Trump has promised -- the highway, park and subway, and sewer system, Shanahan said, he may need some help from the city in the way of municipal offerings.

Residential Outlook Bright

With almost no new construction due on line, there was optimism in the Manhattan residential brokerage community that in a few years there could be demand for new product.

"I think three to five years out from now, you'll be able to start absorbing something new," said Rana Williams, president of Island Homes New York. Inc.

While a group of new residential buildings seems "inconceivable" to many, Williams said, she is confident that there is always a market for quality product in Manhattan.

"This is an island and I think we absorbed an incredible amount of property in the last 10 years," she said.

She shared the belief that Trump is the most likely of developer to achieve this massive task.

"I think that Donald Trump has had foresight in many things," she said.

Barbara Corcoran, president of the Coreoran Group, agrees that normal demand will probably return before the doomsayers predict. "By the time his building gets up and running, there will definitely be a demand," she said.

"All new construction has virtually stopped," she said, "and we're selling what's currently available now."
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Title Annotation:real estate professionals foresee availability of financing for Donald Trump's Riverside South development project in New York, New York when real estate market conditions improve
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Dec 23, 1992
Previous Article:Equitable appoints HQ.
Next Article:Trump says jobs key to approvals.

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