Trump: The Art of the Deal

Donald Trump’s decision to repurchase the West Side Yards in 1985 was perhaps his “easiest business decision” (325). Spanning 100 acres of Manhattan riverfront, it was one of the most valuable undeveloped properties in the US. Trump acquired it for approximately $95 million, a fraction of its potential worth, especially compared to other deals, like the $500 million purchase of the Columbus Circle Coliseum site just four blocks away. Trump originally secured an option for the land in 1974, when New York City was near bankruptcy and real estate values were low. However, due to the lack of government subsidies for middle-income housing, community opposition, and financial constraints, he decided not to exercise his option in 1979. The land was then sold to Abe Hirschfeld, who brought in Franco Macri, an Argentinian businessman.

Macri’s inexperience with New York real estate led to a series of mistakes. He made “far too many concessions to the city” (328), agreeing to over $100 million in giveaways, including subway station renovations, a park, and a $40 million Con Edison smokestack. He also failed to generate excitement for his Lincoln West project and designed uninspiring buildings that resembled public housing. Banks refused to finance the project and, by 1984, Macri was facing financial difficulties.

Trump negotiated with Macri and ultimately purchased the property in 1985 with financing from Chase Manhattan. Trump’s vision for the land was completely different. Instead of Lincoln West, he proposed “Television City,” aiming to lure NBC as its anchor tenant. At the time, NBC was considering relocating to New Jersey for tax benefits. Losing NBC would cost New York 4,000 jobs and $500 million annually, as well as the “psychological loss” (335) of such a well-known cultural institution. Trump’s riverfront site offered spacious studio space and the chance for New York City to retain a major network. To generate excitement, Trump announced that Television City would feature “the world’s tallest building” (337)—a 1,670-foot skyscraper taller than Chicago’s Sears Tower. He hired architect Helmut Jahn, known for his daring designs. Trump envisioned 8,000 residential units, TV and film studios, a massive retail promenade, and parks covering nearly 40 acres.

The media immediately latched onto the skyscraper aspect, overshadowing zoning and density concerns. Dan Rather covered it on CBS Evening News, and Newsweek ran a full-page story titled “Donald Trump’s Lofty Ambition” (341). The New York Times questioned whether Trump’s plan represented “great dream [or] vain illusions” (341). Some critics dismissed the 150-story tower as unnecessary, but Trump countered that its boldness would make it a landmark. Columnist George Will praised Trump’s “brashness, zest and élan” (341), arguing that the skyscraper reflected America’s ambition and energy. Trump believed such a bold structure would attract buyers and elevate the entire project’s appeal.

Ultimately, Trump’s strategic patience, negotiation skills, and ability to generate excitement gave him a second chance at an incredibly valuable property. By focusing on NBC, a landmark skyscraper, and public enthusiasm, he revamped the entire project, turning a failed development into a highly anticipated real estate venture. After the initial controversy over the world’s tallest building in Television City, opposition to it began to fade. Instead, critics, particularly Paul Goldberger of The New York Times, focused on how the development integrated with the surrounding neighborhood. Trump disagreed with the criticism, believing that bold, distinctive projects were more successful than those that merely blended in.

By 1986, Television City had stalled in New York City’s bureaucratic approval process. Trump blamed Mayor Ed Koch’s administration, which he described as “pervasively corrupt and totally incompetent” (343). Several high-profile officials in Koch’s administration were indicted for bribery, perjury, or corruption, and city services were failing. Trump believed that many officials avoided making decisions out of fear of legal trouble, leading to bureaucratic paralysis.

The city planning commission pushed for changes to Trump’s design, including more access to the waterfront, better street connectivity, and relocating the skyscraper further south. Although he initially resisted, Trump reluctantly compromised, moving the skyscraper to 63rd Street and agreeing to more pedestrian walkways and parks. He also replaced architect Helmut Jahn with Alex Cooper, a former City Planning Commission member with a good reputation for urban development. Cooper’s design, which included smaller buildings, townhouses, and more public spaces, led to “positive feedback” (348) from critics and city officials.

Meanwhile, Trump was negotiating with NBC, which was considering moving to New Jersey to save up to $2 billion over 20 years. Trump believed that losing NBC would be a disaster for New York, costing thousands of jobs and significant tax revenue. To keep NBC in the city, Trump offered to build NBC’s headquarters at Television City for $300 to $400 million and subsidize their rent at below-market rates. In exchange, he asked for a 20-year tax abatement and offered the city 25% of future profits from the project. Trump’s own advisors opposed the deal, fearing the financial risk of subsidizing NBC for $30 million per year without guaranteed revenue. However, Trump saw the strategic value of securing NBC as an anchor tenant, attracting investors and boosting Television City’s long-term success.

Despite intense negotiations, Koch rejected Trump’s proposal outright, seemingly out of personal animosity. Koch, who may have been embarrassed by Trump’s swift completion of Wollman Rink, refused to cooperate on Television City. Trump publicly criticized Koch’s failure to offer NBC a competitive deal, warning that the city was driving away major corporations like Mobil Oil and J.C. Penney, which had also left New York for lower-cost states. Koch countered by offering NBC a weak, generic tax break that was not competitive with New Jersey’s incentives. Meanwhile, Hartz Mountain Industries, the New Jersey developer, gave NBC a 30-day deadline to accept their deal, further pressuring New York. Despite setbacks, Trump remained confident that Television City would eventually succeed, with or without NBC. He believed Koch’s incompetence would not last forever and that his project’s time would come. He also kept alternative plans open, including residential development or a major shopping complex, ensuring he would profit regardless of the city’s decisions.