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Trump still controls Plaza.

Plaza Hotel lenders structured a deal which leaves Donald J. Trump in control and substantially reduces his personal debts.

"We're really pleased with the deal," Trump said. "It's 51/49 split with a major reduction in debt." The terms will probably take effect in the next couple of months, he added.

Trump will be relinquishing 49 percent of his stake in the Plaza for a wash out of $125 million in personal guarantees. While the $300 million floating-rate mortgage will remain, Trump will be able to pay as little as 5 percent interest and allow the balance to accrue.

The Plaza has been in the red since it was purchased for about $408 million from the Robert M. Bass Group in 1988. Debt service has been in the $41 million range while cash flow has not exceeded $21 million.

This year, the restructured debt service is expected to reach only $15 million, said Richard Wilhelm, president of the Plaza Hotel. "We are currently in a positive cash flow situation, even under the old debt service," he added.

February of 1992, Wilhelm said, was "the best February we've ever had. It was a tremendous month." Additionally, he said the revenue per available room has consistently been number one in the city.

"Trump is running a great hotel and has great service," Wilhelm said. People are now used to having the Plaza restored, he said. They have stayed there, and are telling their friends to stay, too. "It's word of month around the world," he noted.

Meanwhile, the plan to turn the Plaza into high-priced condos has been shelved for the time being. "Because of the market we decided to put it off," Trump said. "At a later date it's a possibility."
COPYRIGHT 1992 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Donald Trump, Plaza Hotel
Publication:Real Estate Weekly
Date:Mar 25, 1992
Words:290
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