Donald Trump: Real estate mogul or fortunate son?

Donald Trump: Real estate mogul or fortunate son?

President Donald Trump is one of the most famous men in the world, a politician who is equal parts showman and conspiratorial populist. Well before he was the president of the United States – even before he was a famous reality TV host – Trump was a local celebrity in his hometown of New York City. He built that fame on the back of a real estate empire that had been established by his father.

For three decades, starting in the 1970s, Trump established a narrative that he was a genius at real estate and business deals. This narrative led to multiple book deals and, in the 2000s, his own show, “The Apprentice.” Since entering politics, though, that narrative has been repeatedly challenged. Critics have called Trump a tax cheat whose fortune is the byproduct of family fortune, not business acumen.

Donald Trump’s entrance into Manhattan real estate

In 1976, a mostly glowing New York Times profile of the then-30-year-old real estate mogul described Trump as “tall, lean and blond, with dazzling white teeth,” saying “he looks ever so much like Robert Redford.” The article also described him as “a glib, nonstop talker.”

That Times article lays out much of the details and mythology that would follow Trump for most of his career. He grew up in Jamaica Estates, Queens, the son of Fred Trump, the then-Chairman of the Trump Organization who began the family business in 1923 when he built a one-family home in Woodhaven, Queens. Donald’s mother, Mary Anne MacLeod Trump, isn’t mentioned in the Times piece.

(Trump’s niece, Mary Trump, has alleged in her recent book, “Too Much and Never Enough,” that Fred’s emotionally abusive parenting style helped shape the person Donald is today.)

In the Times profile, Trump is said to have “graduated first in his class in 1968” from the Wharton School of Finance in Philadelphia, Pennsylvania. By 1976, he had been the president of the Trump Organization for three years and had ambitious plans for Manhattan, a market the family company had only started entering in recent years.

Three of Trump’s ambitious plans are discussed in the article: a convention center over the Penn Central Transportation Company’s 34th Street yard, a 1,500‐room Hyatt Regency hotel near Grand Central and 14,500 federally subsidized apartments on the Penn Central’s 60th Street yards.

Ultimately, Trump’s bid for the convention center was rejected, though he received $880,000 for his lobbying efforts.

Trump did convert the former Commodore Hotel into a Hyatt. That deal officially established him in the Manhattan market after years of the Trump Organization mostly sticking to Brooklyn, Queens and Staten Island. (Trump sold his stake in the Hyatt hotel in 1996. It is currently set to be torn down.)

Early red flags

Though the Times article includes praise of Trump from multiple sources in the New York real estate industry, not everyone was impressed by the brass businessman. Specifically, people on the money side of the business said he was “overrated” and that his success was mostly in building his public image on the back of good connections.

Even a regular business associate of Trump, the architect Der Scutt, said of him, “He’s extremely aggressive when he sells, maybe to the point of overselling. Like, he’ll say the convention center is the biggest in the world, when it really isn’t. He’ll exaggerate for the purpose of making a sale.”

Trump and his father were also sued by the US government in 1973 for violating the Fair Housing Act of 1968. At the time, the Trump Organization owned thousands of residential properties in New York. The government alleged that the company engaged in discriminatory rental practices, refusing to rent to minorities. Both Fred and Donald Trump were named in the suit.

While the Trumps never admitted any wrongdoing – to this day, Trump downplays the lawsuit – the organization signed a settlement. Part of that settlement included agreeing to specifically advertise that the company accepted black applicants.

The making of a real estate mogul

The crown jewel of the Trump real estate empire and Trump’s personal properties is Trump Tower, designed by Scutt. Located on Fifth Avenue and East 56th Street, construction on the tower began in 1979, with the 58-story skyscraper opening in 1983.

For decades, it was Trump’s primary residence, though multiple buildings, both in New York and elsewhere, have carried the name Trump Tower. The Fifth Avenue Trump Tower is also the main office for the Trump Organization and featured prominently in “The Apprentice” TV show.

The Trump Organization owns properties in at least eight states, including Nevada and Hawaii, though New York is where most of the company’s main properties are located. These include Trump-branded buildings like Trump Plaza, Trump Palace and Trump Parc.

The Trump real estate empire has largely grown globally through a licensing agreement that, for a substantial fee, puts the Trump name on hotels and resorts not directly owned by the organization. Since the beginning of Trump’s presidency, multiple properties around the world have dropped the Trump name.

An eye for self-promotion

The 1980s not only represented a boon period for the Trump Organization, but also for Trump’s personal brand. Throughout the decade, publications wrote fawning articles about his great business and personal success.

People called Trump “movie-star handsome” in 1981. GQ said in 1984, “Donald Trump gets what he wants.”

As the decade came to an end, a New Republic piece entitled “The Triumph of Trumpery” noted that Trump was a Manhattan outsider who nonetheless represented the borough in important ways.

“He consumes aggressively and conspicuously, he understands the value of self-promotion, he is contemptuous of those who are unsuccessful.”

The GQ article noted, as Scutt had in 1976, Trump’s habit of exaggeration.

“Donald Trump’s declarations have a habit of sliding up or down in magnitude. If he thinks he can get away with it, the statements become broader and more encompassing.”

In 1987, Trump published the memoir “The Art of the Deal,” the first of what would be numerous ghostwritten books that purportedly explained how Trump succeeded in business. Trump’s ghostwriter on that first book, Tony Schwartz, says he now regrets helping perpetuate the Trump myth. Schwartz has been an outspoken critic of Trump throughout his presidency.

For his part, even in his 30s, Trump had a self-mythologizing habit of separating people into two camps: friends and enemies. Speaking to the Times, he seemed to take it as part of doing business that he would have both, saying of his hometown, “My friends and enemies are all in New York City, so I’ll probably stay here.”

(In 2019, Trump officially moved his residence from New York to Florida.)

A fortune built on tax fraud

In 2018, a far less flattering New York Times piece openly challenged the Trump mythology. It alleged, counter to Trump’s claims, that he received the equivalent of US$413 million from his father, “much of it through tax dodges in the 1990s.” Trump has claimed he received only a US$1 million loan from his father to get started.

The tax schemes used by the Trump family, the Times reports, helped create the narrative that Donald Trump was a successful real estate mogul, when in fact his wealth was his father’s. The Times claims the efforts showed a clear pattern of tax fraud.

“The conduct … represented a pattern of deception and obfuscation, particularly about the value of Fred Trump’s real estate, that repeatedly prevented the I.R.S. from taxing large transfers of wealth to his children.”

The report claims the tax fraud began at the end of the 1980s when “Donald Trump’s big bets began to go bust.” As Trump faced multiple bankruptcies, his father, who died in 1999, used his own wealth to bolster not only the business empire, but Donald’s personal brand.

Trump did not comment on the Times report, but his lawyer stated at the time that “The New York Times’s allegations of fraud and tax evasion are 100 percent false, and highly defamatory. There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate.”

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