Trump: How to Get Rich

Being Stubborn Is Often an Asset

My first big deal, in 1974, involved the old Commodore Hotel site near Grand Central Station on Forty-second Street in New York City. The hotel was vacant, except for a sleazy club called Plato’s Retreat and some rundown street-level stores.

The land was owned by the Penn Central Railroad, which was bankrupt and owed New York City $15 million in back taxes that the city desperately needed. The city was about to default on its bonds, and banks would not consider real estate loans in Manhattan.

My idea was to transform the Commodore into a state-of-the-art hotel. I had a six-point plan:

1. Buy the land from the railroad.

2. Induce the railroad to use the purchase price to pay the City of New York the back taxes it owed.

3. Convince a New York State agency with the power of eminent domain to accept a deed to the land to condemn all existing leases.

4. Persuade the city to accept a fixed rental and a share of the profits in lieu of taxes.

5. Find a big hotel operator to join me in the project, since I had no hotel experience.

6. Convince a bank to loan me $80 million to build the hotel.

When I first told my lawyer, George Ross, of my plans, he told me I was crazy to attempt something so bold in such a bad economic environment. I told him I was determined to get it done. He agreed to help.

For two years, I stuck to my guns. Eventually, it paid off.

The railroad sold me the land for $12 million and used the money to pay the city its back taxes.

The Urban Development Corporation accepted the deed to the land and agreed to condemn all existing leases, provided I would pay all damages to the displaced tenants.

The city agreed to the lease from UDC with a fixed rent and a share of the profits.

Hyatt became my partner in the deal and funded half of it.

I got a loan from the Bowery Savings Bank to cover the cost of acquisition and construction.

The hotel became the Grand Hyatt.

The fact that I was stubborn and had achieved a result others deemed impossible jump-started my career as a developer.