Busi­ness­man turns Pres­i­dent

East African Business Week - - FRONT PAGE - Who is Don­ald Trump?

In 2016, bil­lion­aire real es­tate mogul and re­al­ity tele­vi­sion per­son­al­ity Don­ald Trump was elected the 45th pres­i­dent of the United States. U.S. Pres­i­dent and real es­tate de­vel­oper Don­ald John Trump was born in 1946, in Queens, New York. In 1971, he be­came in­volved in large, prof­itable build­ing projects in Man­hat­tan. In 1980, he opened the Grand Hy­att, which made him the city’s best-known de­vel­oper. In 2004, Trump be­gan star­ring in the hit NBC re­al­ity se­ries The Ap­pren­tice, which also spawned the off­shoot The Celebrity Ap­pren­tice. Trump turned his at­ten­tion to politics, and in 2015 he an­nounced his can­di­dacy for pres­i­dent of the United States on the Repub­li­can ticket. Af­ter win­ning a ma­jor­ity of the pri­maries and cau­cuses, Trump be­came the of­fi­cial Repub­li­can can­di­date for pres­i­dent on July 19, 2016. That Novem­ber, Trump was elected the 45th Pres­i­dent of the United States when he de­feated Demo­cratic can­di­date Hil­lary Clin­ton.

Early Life and Education

Don­ald John Trump was born on June 14, 1946, in Queens, New York, the fourth of five chil­dren of Fred­er­ick C. and Mary Macleod Trump. Fred­er­ick Trump was a builder and real es­tate de­vel­oper who spe­cial­ized in con­struct­ing and op­er­at­ing mid­dle-in­come apart­ments in Queens, Staten Is­land and Brook­lyn. Don­ald was an en­er­getic, as­sertive child, and his par­ents sent him to the New York Military Acad­emy at age 13, hop­ing the dis­ci­pline of the school would chan­nel his en­ergy in a pos­i­tive man­ner. Trump did well at the acad­emy, both so­cially and aca­dem­i­cally, ris­ing to be­come a star ath­lete and stu­dent leader by the time he grad­u­ated in 1964. He then en­tered Ford­ham Uni­ver­sity and two years later trans­ferred to the Whar­ton School of Fi­nance at the Uni­ver­sity of Penn­syl­va­nia, from which he grad­u­ated in 1968 with a de­gree in eco­nom­ics. Dur­ing his years at col­lege, Trump se­cured education de­fer­ments for the Viet­nam War draft and ul­ti­mately a 1-Y med­i­cal de­fer­ment af­ter he grad­u­ated.

New York Real Es­tate De­vel­oper

Trump fol­lowed his fa­ther into a ca­reer in real es­tate de­vel­op­ment, bring­ing his grander am­bi­tions to the fam­ily busi­ness. As a stu­dent, Trump worked with his fa­ther dur­ing the sum­mer and then joined his fa­ther’s com­pany, El­iz­a­beth Trump & Son, af­ter grad­u­a­tion from col­lege. He was able to fi­nance an ex­pan­sion of the com­pany’s hold­ings by con­vinc­ing his fa­ther to be more lib­eral in the use of loans based on the eq­uity in the Trump apart­ment com­plexes. How­ever, busi­ness was very com­pet­i­tive and profit mar­gins were nar­row. In 1971, Don­ald Trump was given con­trol of the com­pany, which he later re­named the Trump Or­ga­ni­za­tion. He also moved his res­i­dence to Man­hat­tan, where he be­gan to make im­por­tant con­nec­tions with in­flu­en­tial peo­ple. Con­vinced of the city’s eco­nomic op­por­tu­nity, Trump soon be­came in­volved in large build­ing projects in Man­hat­tan that would of­fer op­por­tu­ni­ties for earn­ing high prof­its, us­ing at­trac­tive ar­chi­tec­tural de­sign and win­ning pub­lic recog­ni­tion. When the Penn­syl­va­nia Cen­tral Rail­road en­tered bank­ruptcy, Trump was able to ob­tain an op­tion on the rail­road’s yards on the West Side of Man­hat­tan. When ini­tial plans for apart­ments proved un­fea­si­ble be­cause of the poor eco­nomic cli­mate, Trump pro­moted the prop­erty as the lo­ca­tion of a city con­ven­tion cen­ter, and the city gov­ern­ment se­lected it over two other sites in 1978. Trump’s of­fer to forego a fee if the cen­ter were named af­ter his fam­ily, how­ever, was turned down, along with his bid to build the com­plex, which was ul­ti­mately named in honor of Se­na­tor Ja­cob Jav­its. Trump’s busi­ness prac­tices were called into ques­tion when, in 1973, the fed­eral gov­ern­ment filed a com­plaint against Trump, his fa­ther and their com­pany al­leg­ing that they had dis­crim­i­nated against ten­ants and po­ten­tial ten­ants based on their race, a vi­o­la­tion of the Fair Hous­ing Act, which is part of the Civil Rights Act of 1968. Trump re­sponded to the case in an in­ter­view pub­lished in the New York Times. “They are ab­so­lutely ridicu­lous,” he said of the Jus­tice De­part­ment which filed the case. “We never have dis­crim­i­nated, and we never would. There have been a num­ber of lo­cal ac­tions against us, and we’ve won them all. We were charged with dis­crim­i­na­tion, and we proved in court that we did not dis­crim­i­nate.” Af­ter a lengthy le­gal bat­tle, the case was set­tled in 1975. As part of the agree­ment, the Trump com­pany had to train em­ploy­ees about the Fair Hous­ing Act and in­form the com­mu­nity about its fair hous­ing prac­tices. Trump wrote about the res­o­lu­tion of the case in his 1987 mem­oir Art of the Deal: “In the end, the gov­ern­ment couldn’t prove its case, and we ended up tak­ing a mi­nor set­tle­ment with­out ad­mit­ting any guilt.” Mean­while Trump had set his sights on mak­ing a big splash in com­mer­cial real es­tate. In 1974, he ob­tained an op­tion on one of Penn Cen­tral’s ho­tels, the Com­modore, which was un­prof­itable but in an ex­cel­lent lo­ca­tion ad­ja­cent to Grand Cen­tral Sta­tion. The next year he signed a partnership agree­ment with the Hy­att Ho­tel Cor­po­ra­tion, which did not have a large down­town ho­tel. Trump then worked out a com­plex deal with the city to win a 40-year tax abate­ment, ar­ranged fi­nanc­ing and then com­pletely ren­o­vated the build­ing, con­struct­ing a strik­ing new fa­cade of re­flec­tive glass de­signed by ar­chi­tect Der Scutt. When the ho­tel, re­named the Grand Hy­att, opened in 1980, it was in­stantly pop­u­lar and proved an eco­nomic suc­cess, mak­ing Don­ald Trump the city’s best known de­vel­oper in the process.

Ex­pand­ing His Em­pire

In 1979, Trump leased a site on Fifth Av­enue ad­ja­cent to the fa­mous Tif­fany & Com­pany as the lo­ca­tion for a mon­u­men­tal $200-mil­lion apart­ment-re­tail com­plex de­signed by Der Scutt. Opened in 1982, it was dubbed Trump Tower. The 58-story build­ing fea­tured a six-story atrium lined with pink mar­ble and in­cluded an 80-foot wa­ter­fall. The lux­u­ri­ous build­ing at­tracted well-known re­tail stores and celebrity renters and brought Trump na­tional at­ten­tion. Dur­ing the same pe­riod Trump was in­ves­ti­gat­ing the prof­itable ca- sino gam­bling busi­ness, which was ap­proved in New Jersey in 1977, and in 1980 he was able to ac­quire a piece of prop­erty in At­lantic City. He brought in his younger brother Robert to head up the com­plex project of ac­quir­ing the land, win­ning a gam­bling li­cense and ob­tain­ing per­mits and fi­nanc­ing. Hol­i­day Inn Cor­po­ra­tion, the par­ent com­pany of Har­rah’s casino ho­tels, of­fered a partnership, and the $250 mil­lion com­plex opened in 1984 as Har­rah’s at Trump Plaza. Trump bought out Hol­i­day Inn soon there­after and re­named the fa­cil­ity Trump Plaza Ho­tel and Casino. He also pur­chased a Hil­ton Ho­tels casino-ho­tel in At­lantic City when the cor­po­ra­tion failed to ob­tain a gam­bling li­cense and re­named the $320 mil­lion com­plex Trump’s Cas­tle. Later, while it was un­der con­struc­tion, he was able to ac­quire the largest ho­tel-casino in the world, the Taj Ma­hal at At­lantic City, which opened in 1990. In 2016, it was an­nounced the Trump Taj Ma­hal would be clos­ing its doors amid mul­ti­ple bank­rupt­cies through­out the years and a lengthy strike by work­ers. Trump him­self had lost his last re­main­ing ten per­cent in­ter­est in the com­pany for the li­cens­ing of his name in March when Carl Ic­ahn took over hop­ing to save the casino. Back in New York City, Don­ald Trump had pur­chased an apart­ment build­ing and the ad­ja­cent Bar­bizonPlaza Ho­tel in New York City, which faced Cen­tral Park, with plans to build a large condominium tower on the site.

The ten­ants of the apart­ment build­ing, how­ever, who were pro­tected by the city’s rent-con­trol and rent-sta­bi­liza­tion pro­grams, fought Trump’s plans and won. He then ren­o­vated the Bar­bizon, re­nam­ing it Trump Parc. In 1985 he pur­chased 76 acres on the West Side of Man­hat­tan for $88 mil­lion to build a com­plex to be called Tele­vi­sion City, which was to con­sist of a dozen sky­scrapers, a mall and a river­front park. The huge de­vel­op­ment was to in­vite tele­vi­sion pro­duc­tion and fea­ture the world’s tallest build­ing, but com­mu­nity op­po­si­tion and a long city-ap­proval process de­layed com­mence­ment of con­struc­tion on the project. In 1988 he ac­quired the Plaza Ho­tel for $407 mil­lion and spent $50 mil­lion re­fur­bish­ing it.

Ups and Downs of Busi­ness

Ex­pand­ing his em­pire to the south, around this time Trump de­vel­oped a condominium project in West Palm Beach, Florida, and in 1989 he branched out to pur­chase the Eastern Air Lines Shut­tle for $365 mil­lion, which he later re­named the Trump Shut­tle. Af­ter fail­ing to be prof­itable, Trump de­faulted on the loans and the airline ven­ture ended in 1992 af­ter a merger. In Jan­uary 1990, Trump flew to Los An­ge­les to un­veil a plan to build a $1 bil­lion com­mer­cial and res­i­den­tial project fea­tur­ing a 125-story of­fice build­ing. It was in 1990, how­ever, that the real es­tate mar­ket de­clined, re­duc­ing the value of and in­come from Trump’s em­pire; though he had as­serted his own net worth in the neigh­bor­hood of $1.5 bil­lion at that time, a Forbes mag­a­zine in­ves­ti­ga­tion into his as­sets re­vealed that his ex­ist­ing debt likely brought the num­ber closer to $500 mil­lion. In any event, the Trump Or­ga­ni­za­tion re­quired a mas­sive in­fu­sion of loans to keep it from col­laps­ing, a sit­u­a­tion which raised ques­tions as to whether the cor­po­ra­tion could sur­vive bank­ruptcy. Some ob­servers saw Trump’s de­cline as sym­bolic of many of the busi­ness, eco­nomic and so­cial ex­cesses that had arisen in the 1980s. Don­ald Trump even­tu­ally man­aged to climb back from a re­ported deficit of nearly $900 mil­lion, claim­ing to have reached a zenith of more than $2 bil­lion. How­ever, in­de­pen­dent sources again ques­tioned his math, es­ti­mat­ing his worth at some­thing closer to $500 mil­lion by 1997. In 2000, Trump con­struc­tion made head­lines again when a state ap­peals court ruled that he had the right to fin­ish an 856-foot-tall condominium. The Coali­tion for Re­spon­si­ble De­vel­op­ment had sued the city, charg­ing it was vi­o­lat­ing zon­ing laws by let­ting the build­ing reach heights that tow­ered over ev­ery­thing in the neigh­bor­hood. The city has since moved to re­vise its rules to pre­vent sim­i­lar projects, but the fail­ure of Trump’s op­po­nents to ob­tain an in­junc­tion al­lowed him to con­tinue con­struc­tion.

The 58-story build­ing fea­tured a six-story atrium lined with pink mar­ble and in­cluded an 80-foot wa­ter­fall. The lux­u­ri­ous build­ing at­tracted well-known re­tail stores and celebrity renters and brought Trump na­tional at­ten­tion.

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