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Trump: 'let's galvanize an industry.' (On the record with: Donald Trump)

Superlatives flow easily off the tongue of developer Donald J. Trump. His hotels are "going great," his casinos are "terrific" and his New York properties are the "best."

Trump is emerging, after more than a year of negotiations and agreements, free of much debt and minus an airline and a yacht. He is now partners in some deals with his creditors, but is looking positively toward the future.

The license for the Taj Mahal in Atlantic City has been renewed to Trump's delight. The New Jersey Casino Control Commission cited a "dramatic financial turnaround" for the Taj Mahal as they voted unanimously to renew the developer's license last month. Trump said the casino is "awash with cash," and is expected to earn $115 million in net operating profits this year.

The fact that Trump reduced his personal guarantees on a variety of loans from $900 million to $125 million strongly influenced the Commission to make its unanimous decision. The $4 million in personal cash and a net worth estimated to be from $500 million to $1.2 billion was also impressive. The commissioners did, however, request monthly gaming reports on profits and cash flow at the Taj because $753 million in bonds will be outstanding in June of 1993.

His other two casino hotels, the Trump Castle and Trump Plaza are in a "pre-packaged" bankruptcy that was confirmed by the court. The New Jersey Casino commission has found all three casinos to be financially stable and the Castle and Plaza licenses were approved unanimously last week. Sales and prices of all three casino bonds have also picked up.

In New York City, the Trump Palace has seen a lot of purchasing activity. Out of 283 units, closings have taken place on just under a hundred units with closings on another three dozen scheduled.

Trump is eagerly awaiting the development of not only the massive Riverside South project slated for the former Penn Yards site on Manhattan's West Side, but his ocean-front private estate in Florida, Mar-A-Lago.

"Riverside South has turned into being an extremely popular development," Trump said recently over lunch at the Plaza Hotel, the jewel of his holdings.

When Riverside South was originally proposed, Trump noted, there was an outcry from the community against it. "That outcry has been turned into something because of a lot of different moves," he added.

The 74-acre tract will retain nearly 30 acres of parkland and opens up access to the waterfront. The residential buildings will echo the character of those on Central Park West while the entire 8.3 million square feet of mixed use space will be fully integrated into the cityscape.

"It's gone from being the most unpopular development in New York, to the most popular development in New York," he boasted.

While Trump said he may sell off parcels for others to develop, he expects to do much of the development himself. It will be much different than Battery Park City, he explained, and would not be run as a semi-governmental authority, as is the Downtown Manhattan project.

"I'm a fan of Battery Park, but I think this will be an even greater development than Battery Park," he said.

Trump anticipates Riverside South will be certified by the New York City Planning Commission this week and begin its seven-month Uniform Land Use Review Process. The full zoning is expected to be in place before the end of the year. "The only good thing about what's happened in the world is that it's a good time to get zoning," he added.

Zoning problems, however, are what Trump is facing now in Palm Beach. The development of Mar-A-Lago was set back when the Palm Beach Town Council turned down, first, a 10-lot subdivision, and, then in April, a seven-lot development and preservation plan for the 16.4-acre landmark estate deeming it "inadequate."

Furious at the decision he calls "ridiculous," Trump plans to sue the toney town for $100 million. There have been many subdivisions, he said, and no other property has had to go through this process. While Trump intends to keep the 118-room main home for himself any new plan cannot be submitted until fall.

Trump recently won what he called a "major" real estate tax certiorari case for the property in which the assessed value - equal to the market value - was reduced from $17 million to $12 million. That assessment reduction is now being challenged by the county.

"So we've had some interesting times and we're doing well now," he said. "We're doing alright."

Earlier this year, Trump startled an industry luncheon by declaring the real estate industry to be $#!+!. "I wanted to get their attention," he explained.

"While I may have seemed negative," Trump continued, "I was trying to put people together and galvanize people to go out and do the right thing to get proper lobbyists and get proper leadership." Trump said he received 50 letters after that luncheon from people who thought he was right.

Trump believes it the lack of a strong, cohesive lobbying effort that allowed the passage of the 1986 Tax Reform Law that limited passive losses. "This industry has been decimated and destroyed by the 1986 tax law," he complained. And for that, he said, the real estate industry should be ashamed of itself.

It is the lack of a unified lobby that Trump finds somewhat incomprehensible. "The real estate industry has been the whipping post for politicians in Washington and elsewhere because we have absolutely no lobby," he declared.

While nobody gives more money than the real estate industry to help get people elected, Trump said, "No single individual has been able to put this - what should be - tremendous power together to galvanize something effective."

"Our positions - unlike other groups - our positions are defensible," Trump explained. "They mean jobs they mean housing. They mean all of the right things."

Trump believes that the National Rifle Association has the most effective lobbyists, and yet, he observed, many of their positions are undefensible. "We should find out who is the man who heads the National Rifle Association," Trump suggested. "Hire him immediately, pay him anything and get him to work for the real estate industry as one group, not as 20 different groups."

Trump has been roundly criticized to his face by members of the real estate industry for not being active in their groups. Trump said he used to go to these meetings but found them to be a waste of his time. When it was suggested to Trump that if he really wanted to organize a unified lobbying effort he should do it himself, and would he be willing, he replied, "I might be. I was hoping that by making the speech, somebody would step forward. But people don't want to, they want to protect their own little turf."

On the topics of the political climate and the upcoming presidential elections, Trump, like other real estate owners, is ready to abandon the Republicans. He believes President Bush has done nothing for the real estate industry except hurt it, either because of his inactiveness or by blaming Congress for not being able to get measures passed.

That same inactiveness, Trump explained, is causing Bush to come up so low in the public opinion polls. "That same inactivity on other subjects there, and the life of the industry is being threatened. Let's hire one really smart top level person," he said, "and let's galvanize an industry." is causing him to be possibly up for a major defeat," Trump predicted.

As for the toe-wetter, H. Ross Perot, Trump said, "I think he's going to have a helluva chance of getting elected because frankly, I'm not sure that there is an alternative."

"If you look at what is happening with the economy - the real picture of what's happening, not the phony picture - the economy is absolutely in the doghouse," Trump said. "The climb back is going to be a long hard climb and much of it is caused - as far as real estate is concerned - by the positions taken by Washington especially in 1986."

Trump does not believe the City of New York can make it without the help of the Federal government and has great expectations for Barry Sullivan, the new Deputy Mayor of Economic Development.

"Barry Sullivan is a great gentlemen who is a very capable guy," Trump said. "Hopefully he can help bring, not only the city back, but the most important industry in this city - real estate - back. A lot of that will have to be lobbying at the Federal level," he added.

If one lobbyist was capable, he believes, the real estate industry would have the strongest lobby in the country because, he said, "nobody contributes like we do. Nobody has the power we do. The power is there, the industry is there, the importance of the industry is
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Author:Weiss, Lois
Publication:Real Estate Weekly
Date:May 20, 1992
Previous Article:Goodman tax reform bill condemned by REBNY.
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