I saved that whole area. That area was a disaster.
—DONALD TRUMP ON THE GRAND CENTRAL NEIGHBORHOOD
In the dismal New York real estate market of the 1970s, Victor Palmieri and Ned Eichler represented one bright spot of opportunity. The portfolio they were hired to sell for the Penn Central trustee included many valuable properties in addition to the underutilized Manhattan rail yards. Among the holdings were several prominent hotels that had passed their prime—the Barclay, the Biltmore, the Commodore, and the Roosevelt—as well as various commercial buildings and rail facilities. Penn Central owned the staid old Yale Club as well as the land beneath the ultramodern Pan Am Building (later named the MetLife Building).
An Italian developer named Renzo Zingone proposed a $40 million industrial complex for a hundred-acre Penn Central parcel in the South Bronx known as the Harlem River Yards. Zingone said he was negotiating with European firms to locate manufacturing plants on the property, which would employ as many as five thousand people. With industrial jobs leaving New York at a rate of roughly fifty thousand per year, officials voiced support for Zingone, even though he wanted the city to buy the land for him. (This approach was unusual, but not unheard of. Access to the land would be considered a form of equity by a lender, who might then advance Zingone construction loans.)1
Among the other players in the scramble for Penn Central’s New York properties were several banks, Arab sheikhs, the Hilton hotel chain, and investors from Iran. The first of all the deals completed by Palmieri was the New York Bank for Savings’ purchase of a thirty-four-story skyscraper at 230 Park Avenue. With 1 million square feet of space and a distinctive copper-and-gilt roof, the landmark building actually spans the avenue. The roadway passes through portals opened in its base, which is decorated on its north side with statuary and a gilded clock. The price paid, $26 million, would equal roughly $115 million in 2015. Considering that it was sold for more than $1 billion in 2007, it was a bargain.
Prices were declining at a rapid rate, and deals were so rare that the controversial Reverend Sun Myung Moon—widely accused of operating a religious cult—made headlines when he purchased both the two-thousand-room New Yorker Hotel and an adjacent theater complex on Thirty-fourth Street for less than $8 million. In this depressed market, most of Penn Central’s properties attracted offers that were substantially lower than what the trustees expected or came with complex conditions that would have to be satisfied before any money was paid. In the first round of bidding, they didn’t receive a single offer for the hulking Commodore Hotel, which rose above Grand Central Terminal from a spot on the northwest corner of Lexington Avenue and Forty-second Street.
Named for the deceased Cornelius Vanderbilt, the nineteenth-century tycoon who was not a real commodore, the hotel honored one of America’s first business celebrities. Vanderbilt had risen from ferry operator to robber baron thanks to unmatched creativity and ruthlessness. His fortune, amassed first through steamship and rail lines, eventually depended most on financial engineering and legal assaults upon his competitors. The commodore prevailed in almost every scrap, and his fortune eventually grew until it exceeded the wealth of modern-day moguls Bill Gates and Warren Buffett combined. Vanderbilt’s legacy—he died in 1877—included the New York Central Railroad, which built and would operate the great hotel.
The Commodore opened in 1919 with nineteen hundred rooms and amenities including en suite baths and a lobby that was the largest single room in New York City. Designed and decorated to evoke an Italian courtyard, the lobby featured an indoor waterfall and was dotted with palms rising out of urns. The ballroom was so big it could, and once did, accommodate a circus complete with elephants. Among the modern facilities available when the Commodore opened were a domestic-telegraph room, an overseas-cable office, and a lounge where stock prices were posted on giant boards attached to the walls.
Although the Commodore retained its allure for decades, competitors eventually built new hotels with larger rooms and more modern fixtures. By the 1960s, the Commodore had lost most of the business travel trade to the Americana and other competitors and served mainly conventioneers and budget-conscious tourists. Wealthier travelers preferred the Plaza, or Harry Helmsley’s Park Lane. When New York City’s economic woes began in the 1970s, the Commodore’s managers negotiated with the hotel’s unions to cut costs by eliminating certain services and laying off workers. All of New York’s hotels suffered, with the overall occupancy rate dipping to 62.5 percent in 1971, which was the lowest figure in thirty years. Seven hotels closed and were converted to other uses. The Commodore rented just half of its available rooms in 1972, and its vast size became a liability. Managers began closing down entire floors to save on upkeep. Although they spent $500,000 to update the ballroom, this effort did not revive the Commodore. By the middle of the decade, many of the businesses that rented on the Commodore’s main floor had departed. Some of these spaces were abandoned. Others were taken over by shops providing discount goods and services including massages and other offerings at a place called Relaxation Plus. On many weekends parts of the lobby were given over to a flea market. One industry insider said, “The value of that hotel is equal to the true land value minus the cost of demolition.”2
Besides the decline of the Commodore, the Grand Central area suffered as the owners of the Chrysler Building, an art deco icon, were forced into foreclosure by creditors and its major tenant, Texaco, prepared to move to the suburbs. Texaco’s departure would pull hundreds of workers out of the neighborhood, depriving local businesses of their spending. The owners of the famous Schrafft’s restaurant, which filled much of the Chrysler Building’s ground floor, decided to close before this loss materialized. A pine-paneled refuge for almost forty-five years, Schrafft’s offered something for everyone in its separate dining room, soda fountain, and basement-level Men’s Grill. As it ceased operation, local residents, commuting office workers, tourists, and day-trippers lost a genteel refuge in a city that seemed ever more dangerous.3
Though hardly as blighted as Times Square, which was overwhelmed by theaters showing pornographic movies, the area around Grand Central nevertheless also became downtrodden. In a single year, 1974–75, crime rose by 18.5 percent in Midtown South, which included the blocks around the station. Ridership on the subway lines feeding Grand Central dropped by 20 percent.
All the trouble in Midtown made Fred Trump wary of any deal involving the hotel next to Grand Central. “Buying the Commodore at a time when even the Chrysler Building is in receivership,” he declared, “is like fighting for a seat on the Titanic.” His son felt differently. Amid the worry and growing fears about the Grand Central area, Donald saw opportunity at the crumbling Commodore. As the end of the line for commuters from suburbs in Westchester County and the posher corners of Connecticut, the great railroad hall adjacent to the hotel still funneled tens of thousands of people into Midtown every day. Despite the Penn Central’s troubles, the chronic traffic congestion in Manhattan gave commuters no option but the rails for getting to work. Also, Trump believed that the borough would remain the nation’s preeminent business address, even if Texaco and others such as American Airlines and UPS were leaving. Big corporations were abandoning other cities including Detroit, St. Louis, and New Orleans at a greater rate. As a globally vital financial center, with a high concentration of business talent, Manhattan was destined to recover and even thrive while these other cities continued to suffer. The Chrysler Building would be rescued and renovated. New skyscrapers would rise to replace an aging stock of office buildings, and all of the executives and salespeople who came to do business would need hotel rooms, meeting rooms, and meals. A revived Commodore Hotel could supply it all and, under the right setup, turn a neat profit.4
The right setup would, in Trump’s mind, include generous help from the government. Just as his father had benefited from federal and state programs that subsidized his apartment developments, Donald thought the taxpayers should help him make money. The project would also require a top-notch hotel operator as a partner in every stage. After failing to land the Westin chain as a partner, Trump set his sights on Hyatt hotels, which was owned by the wealthy Pritzker family of Chicago. Begun in 1957, Hyatt, which had pioneered the modern “atrium” lobby design—complete with glass elevators—operated more than sixty hotels and motels including a few overseas properties. The company, which had grown rapidly from one airport location in Los Angeles, was the only major chain without a New York presence.
As part of his campaign to woo Hyatt, Trump invited the Pritzkers’ banker Benjamin Lambert to lunch. Trump provided transportation in his father’s limousine. As he entered the car, Lambert discovered that Trump had propped-up drawings of a renovated Commodore Hotel. Lambert was impressed enough by the young man’s initiative, if not his sketches, to introduce his luncheon host to the Pritzkers. But no amount of enthusiasm and boyish charm would persuade Lambert to grant Trump’s request that he sell the family on the notion that the new Commodore would be the best hotel in Manhattan. If Trump believed this, he would have to make the case himself. However, hype would have no bearing on the decision made by the Pritzkers and other Hyatt executives. They were more impressed that Trump might get substantially reduced real estate taxes from the city, which would improve the hotel’s prospects year after year after year.
Negotiating simultaneously with Hyatt, the city, and Penn Central, Trump used one to leverage the other. Hyatt’s reputation as a hotel developer and operator would reassure Palmieri, Ned Eichler, and their colleague John Koskinen (a future commissioner of the Internal Revenue Service) that Trump could manage the Commodore project. The Palmieri execs gave Trump an informal first position on the property, based on an eventual $10 million purchase price. But they did not sign a binding agreement to do the deal. For Trump, who didn’t have the $250,000 required to finalize his option on the property, this was not a real problem. He announced to the press that he had “an option” and a “purchase contract” for the Commodore, and no one contradicted him. When city officials asked for a copy of his agreement with Penn Central, he sent them the paperwork, minus the signatures that would have made it binding. This omission either went unnoticed or no one cared about it, because the bureaucracy continued to move forward, as if the parties had signed, and Trump had actually paid. He then used the city’s cooperation to reassure Hyatt that he was bringing something of real value to their partnership.
The key to it all was the paperwork sleight of hand, which became, years later, a matter of pride for Trump. “They only asked to see an agreement,” he would say. “They didn’t say it had to be signed.”
Skating along with the key details of his deal unresolved, Trump promoted it with great confidence. Here he exhibited many of the traits that social scientists would eventually ascribe to high achievers. First he set an ambitious goal. Then he focused on it relentlessly, devoting years of effort to the task and refusing to be deterred by obstacles that would have stopped someone with less confidence. Trump held a vivid image of the new hotel in his mind’s eye and refused any suggestion that his tender age, his lack of experience, or the conditions of the marketplace would prevent it from becoming real. As a boy he had watched his father’s developments rise from rubble-strewn earth to become solid structures of brick and steel that housed thousands of families. He had no doubt that he could do the same, and better, and that success on Forty-second Street would lead to ever bigger and better accomplishments.
In May 1975, after Hyatt executives agreed to a partnership, he summoned the press to a meeting where he and Jay Pritzker presented sketches and said they would spend $70 million to tear the Commodore down to its steel frame and construct a luxury hotel. It would have fourteen hundred rooms, an enormous ballroom, seventy thousand square feet of retail space, a Hyatt-style atrium, and a second-floor bar cantilevered over the Forty-second Street sidewalk. The entire exterior of the building would be covered in highly reflective glass. It would be open, they said, in 1978.
The renderings were made by an architect named Der Scutt, who had begun his career working with the minimalist pioneer Philip Johnson. In the late 1960s Scutt had designed the fifty-four-story building that was built on the Times Square site of the former Hotel Astor. A beaux arts masterpiece faced in brick and slate, the old Astor had welcomed guests with a lush and serene roof garden where they could dine and dance amid flowers, ferns, and vines dangling from trellises. Scutt’s work on One Astor Plaza had attracted great attention because it replaced a much-loved landmark. He incorporated a large movie house and a Broadway theater in his design. But the style was brutally austere, beginning with the massive base that housed the theaters. The tower rose from the back of this structure, clad in black glass and topped by a crownlike assemblage of pointed panels made of white stone. From the New Jersey side of the Hudson River they gave the impression of a man’s starched handkerchief folded into points and tucked into the front pocket.
Scutt’s building offended many who had loved the old Astor and failed to see the charm of a boxy structure topped by a tilted crown. Donald Trump was not among the nostalgic. Partial to sharp angles, shiny surfaces, and uncluttered design, he admired One Astor Plaza’s sleek functionality. He recognized Der Scutt as a rising star of architecture, with a bit of celebrity cachet, and recruited him for the Commodore renovation. Just as his father had enlisted Morris Lapidus to add luster to his proposal for a domed amusement park in Coney Island, Trump relied on Scutt to put a sheen on Trump’s ideas for the Commodore.
The key to the whole shiny project would be a big tax break, which Trump first tried to win from the state government in Albany, where he had old Brooklyn clubhouse friends in Governor Hugh Carey and Assembly Speaker Stanley Steingut. When this approach failed, Trump turned to the city bureaucracy, where development officials helped him with a cleverly engineered scheme. Under this plan, the state’s Urban Development Corporation, which had been all but shuttered when its moral-obligation bonds became unsellable, would actually own the hotel and lease it to Trump. The agency, which was tax exempt, could keep the property off the city assessment rolls. Trump and Hyatt would save more than $4 million per year.
The city bureaucrats who devised the tax break for Trump’s benefit presented it as something larger—a new Business Investment Incentive Program—that could be used by other for-profit construction and redevelopment projects. The UDC’s chief, Richard Ravitch (he had been appointed to the post after his investigation) pressed for modifications to make the deal better for the state. He was joined by members of the city Board of Estimate, who recognized that one especially well-connected firm—the Trump Organization—would be the prime beneficiary of the incentive program. This truth wasn’t lost on other hoteliers. Mario di Genova, president of the Americana Hotel, complained that the deal was “immoral and unfair.” Harry Helmsley wondered aloud whether “maybe too much is being given” to the Trumps.5
Upon hearing the complaints, Donald threatened to withdraw his proposal and insisted that no one else would invest in the Commodore if he walked away. This wasn’t entirely true. In early 1976 the Carter hotel chain, a small regional operator, offered to renovate the hotel and help save the Grand Central neighborhood on terms more favorable to the city. The bid could not be considered by Penn Central while Donald Trump still controlled a purchase option, but this control was not legally established. Palmieri’s team may have agreed to the arrangement and everyone was going along as if it were real, but Trump still hadn’t paid the option and no papers had been signed.6
Critics on the Board of Estimate, as well as other hotel operators, were soothed when Trump agreed to share the hotel’s annual profits with the city, up to the point where they equaled a full property-tax assessment. With this sweetener, Ravitch and the UDC also agreed to the scheme. Later, when the details showed that Trump would have many ways to adjust his accounting to limit his payments to the city, Ravitch would say he considered this decision a mistake.
With the UDC accepting its role, the clock was still running on Trump’s so-called option, which supposedly came with an eighteen-month time limit. Both he and the Palmieri executives wanted to push the arrangement to completion. Together they took steps to pressure the Board of Estimate. For his part, Trump got workers at the hotel to tear down the clean-looking plywood and two-by-four studs they had used to board up the ground-floor windows of shops that had closed. They replaced these materials with dirty, salvaged scrap wood so that people who passed on the sidewalk would see that the Commodore was a mess and complain to city officials. At the same time John Koskinen suddenly announced that the Commodore, which had been open for business through all the deliberations, would close within days.
The Palmieri Company had previously told city officials that the hotel would stay open through the summer, when the nation’s bicentennial celebration and the Democratic Party’s presidential nominating convention would bring a flood tide of business. Yet in the first three months of the year, occupancy at the Commodore had plunged to 33 percent. At this rate, Koskinen said, the hotel would lose more money—$4.6 million for the year—if it stayed open than it would if it closed. By closing, and laying off the Commodore’s five hundred employees, Koskinen would also deliver a shock to city officials, who would regret the lost jobs and fear the prospect of the huge building sitting empty beside Grand Central Terminal. The chairman of the local community board said, “It seems to me like someone’s trying to force the issue.”
On Tuesday, May 18, 1976, the Commodore Hotel’s last guest checked out of his room. Mr. W. J. Schaap of St. Louis, Missouri, had traveled to New York to visit tourist sites with his wife and sister-in-law. He pronounced the accommodations “beautiful.” On Thursday the twentieth the New York City Board of Estimate gave Donald Trump his tax break. With it, he was poised to take control of a landmark site in the nation’s, if not the world’s, most important city. All this, and he was not yet thirty years old.7
* * *
Even with the equivalent to a $4-million-per-year subsidy from the taxpayers, Donald Trump had to work hard to get financing to tear down the old hotel and build a new one on its bones. Months passed as he negotiated for a loan with executives of the Equitable Life Insurance Company, who had gradually been committing more of their firm’s cash to real estate. Equitable’s investments reflected a big shift in the large-scale-development industry, which, up until 1970, had been dominated by individuals with the wealth required to accept personal responsibility for loans from conservative bankers. The new model allowed for “nonrecourse” lending, which would allow a builder such as Trump to borrow big sums even if he didn’t have the assets to cover the loan in the event of a default. Financiers considered valuable sites to be collateral in these cases, and they charged higher interest rates for the notes, which they expected to provide a long-term stream of income. But even under this new lending model, Equitable officials vacillated as they considered Trump’s application.
Trump became more frustrated as the months passed. At one point Equitable formally rejected the notion of the firm financing the entire project—at a cost of $75 million—and said they wouldn’t lend more than one-third of this amount. Trump’s mortgage adviser, Henry Pearce, an éminence grise in the local real estate scene, told him to fight on. He would eventually secure permanent loans—as opposed to construction financing—from both Equitable and the Bowery Savings Bank. The arrangement meant that neither institution would take on all the risk, and that the project would be subject to review by two different sets of financial overseers.
As the lenders worked slowly through their evaluation of the project and then the legal paperwork, Trump’s political benefactor at City Hall faced challenges from within his own party. Leading Democrats had expected the incumbent Abe Beame, to serve a single term and make way for Percy Sutton to become New York’s first black mayor. (A decorated war veteran and civil rights leader, Sutton had garnered 80 percent of the vote to become Manhattan borough president in 1965. He had held the post for twelve years.) However, Beame decided that in managing the city’s fiscal crisis, and suffering the indignities that came with it, he had earned a chance to seek reelection. His choice set off a free-for-all primary against Sutton, New York secretary of state Mario Cuomo, and three members of Congress. Ethnically and religiously diverse, this group of challengers attacked Beame as an incompetent who had presided over a city in chaos. Their charges took on new meaning when a midsummer electricity blackout led to widespread looting. In a city already terrified by a serial killer who called himself Son of Sam, the blackout sealed Beame’s fate as a one-termer.
The two top vote-getters in the September 1977 primary election were Mario Cuomo, who was endorsed by Beame’s longtime ally Governor Carey, and Representative Edward I. Koch, who had seized upon crime as a campaign issue and balanced his liberal record with frequent statements of support for the death penalty. At campaign stops he would challenge audiences and fellow politicians with questions like “How many here are for the death penalty?”—then volunteer that he was in favor of it.
As Koch once confessed, the death-penalty stand was a political gambit that he used to distinguish himself from the other Democrats and capture support from fear-filled voters. It also helped him establish that he was bold and aggressive to the point of being obnoxious—in other words, he was a bona fide New York–style character—who was determined to define himself in a decisive way. For similar political reasons Koch, who was almost certainly gay, never answered questions about his sexual orientation and campaigned with former Miss America Bess Myerson at his side. Hugely popular, Myerson held the candidate’s hand and let him speculate about her future as the “first lady” of New York City. Myerson’s star power helped Koch overcome the fact that he was little known outside his congressional district. Finally, he was also aided by a well-timed editorial-page endorsement from the New York Post, which had been purchased in the previous year by the international media magnate Rupert Murdoch.
Murdoch’s acquisition of the tabloid Post brought screaming, British-style sensationalism to the city. (He did not, however, import the practice of publishing a pornographic photo in every edition, as he did in his British tabloid The Sun.) Under Murdoch’s leadership the Post fed New Yorkers raw-meat crime stories and celebrity confections that suggested that their city was a dystopia where the famous and fabulous could purchase power and safety but everyone else lived under the threat of random catastrophe. The 1977 blackout was, for example, 24 HOURS OF TERROR according to the Post. When the city’s police struggled to capture the Son of Sam killer, the Post proclaimed, NO ONE IS SAFE.
The distorted view of the world presented by the paper would prompt Osborn Elliott, dean of the Columbia University School of Journalism to declare, “The New York Post is no longer merely a journalistic problem. It is a social problem—a force for evil.” Elliott was expressing an industry consensus. Times editor A. M. Rosenthal said the Post practiced “mean, ugly, violent journalism.” Nevertheless, as Elliott noted, Murdoch’s method produced circulation gains, and his presence in New York, home of the nation’s major magazines, TV news operations, and wire services, gave him outsized influence on the national scene. Others noticed and imitated Murdoch’s formula of gossip and provocation, which delivered a reader’s version of a sugar high, satisfying in the moment and also creating a craving for more.8
Koch’s law-and-order posture became more of an advantage in the weeks before the November election, when every crime that made the papers gave him a chance to talk about cracking down on those who made parts of the city as dangerous as war zones. The fear that New York was out of control reached a peak during the second game of the 1977 World Series, as TV announcer Howard Cosell observed smoke outside Yankee Stadium and famously declared, “There it is, ladies and gentlemen, the Bronx is burning.” His words and the images of smoke in the sky led many to wonder why anyone at all would want to be mayor of New York City and contributed to a Koch victory margin of almost 10 percent.
* * *
With six weeks left in his administration, Abe Beame turned to the business of securing the future for himself and his friends. He accepted a mostly honorary part-time position in the Carter administration, named a few new judges, and appointed Deputy Mayor Stanley Friedman to a lifetime position on the Board of Water Supply. This job required a bit more engagement—Friedman would have to attend board meetings every week or two—than Beame’s position on the President’s Advisory Commission on Intergovernmental Relations. However, it came with a $25,000 annual salary as well as a city car and driver.
Not that Friedman would need the money. A hyperactive, cigar-chomping political operative, Friedman had accepted a six-figure offer to join Roy Cohn’s law firm. But he would stay at City Hall as long as Beame was in power. He thus had good reason to be invested in the welfare of Cohn’s client Donald Trump. In the final weeks of Beame’s administration, Friedman worked determinedly to finalize the state and city roles in the Commodore deal so that Koch, who had campaigned with a promise to end political favoritism, wouldn’t be able to stop it. In the end, Friedman steered the project through nine different regulatory agencies including the fire department, the planning board, and the Bureau of Gas and Electric to complete a stack of papers that bound the city and the state to UDC ownership of the new hotel, with a lease arrangement for Trump and the tax break. In a most unusual twist, for a period of nine months the developer would be permitted to abandon the project with no penalty if things weren’t working out for him.
Rarely—if ever—had anyone with so limited a track record and no actual cash invested been entrusted with so much by the city. The parties likely had this in mind as they raced to complete the arrangements prior to Koch’s inauguration. During the week before Christmas, Friedman brought lawyers for the city, Trump, and the UDC together for a marathon meeting. As the absentee mayor’s proxy, he personally signed the key papers on behalf of the city government. The only detail left unresolved was the special approval required for the bar/restaurant that would hang over the sidewalk on Forty-second Street. Friedman tied up this loose end on December 29, 1977, making sure that Trump got an extraordinary long-term permit—twenty-five years instead of the normal ten—and a cut-rate price for the use of public space. Both were possible because the UDC would actually hold title to the property and, under a loose reading of the rules, qualified for the special treatment. An ordinary businessperson operating a regular enterprise would have been limited to ten years, at full freight.
No ordinary businessman, Donald Trump was connected in an almost unique way to those who held the levers of political power and therefore benefited, thanks to Cohn, Friedman, Beame, and others, from the kind of favoritism that George Washington Plunkitt savored. “Roy could fix anyone in the city,” Friedman would explain to the writer Marie Brenner during lunch at 21. Trump, who was also at the table, said of Cohn, “He’s a lousy lawyer, but he’s a genius.”9
The kind of fixing that Friedman mentioned generally involved politicians who could be motivated by favors or threats. Hard-nosed bankers required collateral, which Trump did not possess. When he couldn’t obtain a construction loan on his own, Trump called on his father and the Hyatt Corporation for support, and both came through for him by taking responsibility for the money provided by Manufacturers Hanover bank. (It would eventually be paid back with the more permanent loans from Equitable and the Bowery.) Without guarantees from these allies, who pledged to complete the project if Donald failed, work would not have started at the Commodore site.
When demolition began in May of 1978, the threat of blight in the area around Grand Central, which was cited to justify government favors for Trump and Hyatt, was already evaporating thanks to projects powered by ordinary, unsubsidized capitalism. On Lexington Avenue, across Forty-second Street from the Commodore, the Chrysler Building was undergoing a $23 million restoration, thanks to the Massachusetts Mutual Life Insurance Company, which had paid $34 million to take the building out of foreclosure. Mobil and Pan Am each bought the buildings where they were primary tenants, and major work had begun on seven other sites within a few blocks of Grand Central. None of these projects had involved special help from state agencies or tax breaks from the city. Each represented a clear-eyed, profit-driven decision that defied the idea that the neighborhood was doomed and that nothing could be done to save it without a government subsidy.10
Once Trump’s deal was completed, favoritism and subsidy ceased to be matters of central concern. When architecture critic Paul Goldberger turned his attention to the changes coming at the site of the grand old hotel, he described the tortured path of the arrangement as “one of the most complicated real estate deals ever conceived,” but his main interest was in the aesthetic future. He was wary of a mirrored structure rising thirty stories high in the midst of all the sober stone and concrete along Park Avenue. A Hyatt covered in reflective glass might look like a bit of Houston squeezed into the neighborhood. In early 1978 he suggested, in The Times, that a limestone façade “would have offered the desired new image and would have fitted in much more comfortably with the solid neighbors.”11
As demolition crews entered the old Commodore, they made a few discoveries. In the bowels of the building they found that homeless people had broken into a boiler room and taken up residence. The rats that roamed the floors below the ground level were so big they killed the cats that were dispatched to deal with them. As walls were dismantled on upper floors, engineers discovered that much of the original steel framework, which was supposed to support the new structure, was rotted or damaged and had to be replaced. The bad steel drove up the price of the project.
Although Fred Trump tried to keep an eye on things, day-to-day decisions fell to Donald. For the first time in his life he would be responsible for the success or failure of a project, and this one was far more complex and risky than anything his father had ever attempted. With lenders looking over Donald’s shoulder—a special arrangement was made to govern even the smallest payments to suppliers and contractors—he was eager to contain costs. As he tried to preserve elements of the old structure, in the hope of saving money, he ran the risk of driving up the cost due to delays and design changes. One of the key engineers on the site, Barbara Res, would recall that Donald’s decisions, expressed so forcefully that no one would challenge him, contributed substantially to cost overruns. A project estimated at about $40 million would cost $70 million.
To make up for the overruns, Trump and Hyatt had to reimagine their hotel, which was originally supposed to serve the middle of the market, as a high-end destination. That way they could charge rates to cover their costs. This was accomplished through changes in design and decoration that gave the hotel a more luxurious feel. By the time the Hyatt opened, a little more than two years later, Goldberger’s qualms had all but disappeared. He declared the hotel a “sleek” success in which the choice of “flashy material” was ultimately justified. He judged it better looking from the outside than both the New York Hilton and the Sheraton on Times Square. He found that the lobby of the hotel, with its brass fixtures and trademark Hyatt atrium, was “more loud than it is truly restful,” but surmised that Der Scutt and Trump had wanted to evoke the energy of Manhattan and they had achieved this goal. He noted that the hotel’s rooms were well furnished but did not offer the luxury of the top-of-the-line Helmsley Palace, which had recently opened just seven blocks away. However, rates at the Palace started at $140, compared with $95 at the Hyatt, and topped out at an extravagant $1,500 per day.
* * *
At age seventy, Harry Helmsley had worked his way up from the bottom of his industry—he was an office boy at sixteen—to co-owner of the largest real estate management firm in the country. In the early 1970s, when he married his second wife, Leona, he said he controlled $3 billion ($17 billion in 2015) in assets. Like the Trumps, Helmsley was active in politics. He donated $48,000 to Governor Carey’s first campaign. He began putting his last name on things with his purchase of 230 Park Avenue, a move that was apparently part of an effort to make the building more widely recognized. (In an earlier, but less obvious, flex of ego, the bar at the Park Lane hotel had been named Harry’s.) Helmsley and Leona granted interviews to reporters in which he declared that wealth is “the only way to keep score in business” and she expressed constant devotion to her husband. Secretive about her past—she was a high school dropout who had changed her name several times—Leona made certain claims, including modeling credits, which were suspiciously impossible to confirm. She refused to talk about former husbands, her son, or her grandchildren. But she eagerly displayed her current life, which was full of privilege and glamour, including jaunts to Palm Beach in a private jet, parties with Frank Sinatra, and a Manhattan home complete with indoor swimming pool.
The Helmsleys presented Leona as not just the manager of their hotel empire, but as the queen of a realm where customers constituted her “royal family.” Leona “ensures the grandeur” that guests experienced at the Palace, noted advertisements for the hotel. And lest anyone doubt that the husky-voiced Leona was determined to “lavish” them with attention, a reporter was invited to listen as she telephoned a man in California who had complained about poor service during breakfast at the Helmsley Park Lane. Solicitous in the extreme, she assured the fellow that the “pretty dining room” was so popular that the staff sometimes struggled to keep up. Next time, she assured him, service would be better. Upon ending the call she declared, “He’ll be back.”12
With these appearances in the press and plenty of paid advertisements, Harry and Leona Helmsley became famous, their comings and goings chronicled by Liz Smith, Page Six, and People magazine, which made them “celebrities.” Historically, men and women were celebrated for heroic achievements or for leading others in a noble cause. Broad public adulation was reserved for those who represented the virtues and moral character that society prized. Joan of Arc was a celebrity in this sense. In the age of mass media a new “synthetic celebrity,” as historian Barbara Goldsmith termed it, emerged. Publicity in any form was enough to make a person into a celebrity, rewarded with fawning attention, money, and power. As Goldsmith noted, the Watergate crimes of Richard Nixon and his men qualified them for celebrity to the tune of $100 million in book contracts and sales. Even those Nixon henchmen who went to prison, such as G. Gordon Liddy, would move quickly from infamy to celebrity and profit. The first of many Liddy books sold 1 million copies.13
As savvy synthetic celebrities, the Helmsleys promoted themselves as readily understood caricatures. He was the likable, elderly man of great wealth who could be admired because he’d made his fortune by dint of hard work. She was the beautiful, doting younger wife who looked after their shared assets with a steely resolve that eventually earned her the sobriquet Queen of Mean. But while certain negatives attached to Leona, on balance the Helmsleys benefited from all the attention, which helped them stand out in a crowded marketplace and translated into increased business for their properties and thus fatter profits.
The seemingly simple route traveled by Leona and Harry, from money to celebrity to more money, was a well-plotted journey. In Leona’s case it required the careful construction of a self based on qualities she hoped to project, and omissions—she refused to reveal her age—that blurred her past. She presented this self to the world with the help of chosen, uncritical reporters who could be trusted to reveal only the aspects that would illustrate the version of Leona she had built. In this type of endeavor, sophisticated celebrities also permitted reporters carefully plotted glimpses of their flaws and foibles, which allowed them to seem “human” and therefore more appealing to the public. In New York in the 1970s gossip columnists provided this service most reliably, but the most valuable publicity came under the imprimatur of The New York Times. When The Times published a personality profile, it conferred a unique level of legitimacy on its subject. In The Times, Judy Klemesrud, who began at the paper working for the “women’s page,” revealed Leona Helmsley as a feisty yet traditional woman. During the interview Leona had, with a flourish, produced from a silver box “my best award.” As Klemesrud dutifully reported, it was her marriage license.
Leona Helmsley’s self-congratulating comments about her famous friends, her many talents, and her wealth—“I’m in a bad [tax] bracket now”—were presented in a matter-of-fact way that was becoming more acceptable in a society awash in marketing and promotion. The notion that one could and should construct a self and then draw attention to it was hardly limited to the rich and famous. As the writer Tom Wolfe had made clear in a seminal New York magazine essay titled “The Me Decade,” Americans were generally enthralled by the prospect of “changing one’s personality—remaking, remodeling, elevating, and polishing one’s very self … and observing, studying, and doting on it. (Me!)” People from all walks of life were committing themselves to the kind of self-interest that permitted men to “shuck overripe wives and take on fresh ones” and encouraged women to resolve their unhappiness in affairs and threesomes. A key element in this, Wolfe noted, was to get others to pay attention to you as you accomplished your self-conscious transformation.14
Nowhere in America was this attention-seeking impulse more evident than in New York City, where so many people clamored for a moment of fame that success required truly outlandish efforts. The striving could be witnessed every night at clubs such as Studio 54, where movie stars, artists, athletes, and mobsters indulged in sex and drugs and preened for the attention of photographers. The rich and powerful, and those with the potential to become so, were also welcomed. Thus, Roy Cohn and Donald Trump were regulars. Drugs and debauchery were the norm, as Trump would eventually recall for writer Timothy O’Brien: “I would watch supermodels getting screwed, well-known supermodels getting screwed, on a bench in the middle of the room. There were seven of them and each one was getting screwed by a different guy. This was in the middle of the room.”15
Although Tom Wolfe wondered if the Me Decade represented a kind of spiritual crisis, historian Christopher Lasch saw it as the mass psychological response of a society dominated by huge bureaucracies, saturated in images—advertising, TV programs, films—and subject to countless pseudo-events that were managed like theater productions. In his 1979 book, The Culture of Narcissism, Lasch described an America in which people accepted that one’s image, whether it was transmitted on television or in a family photo album, was a vital source of identity and power. At the same time, people felt alienated by their work in large corporations and life in sprawling suburbs. Taken together, these developments made vast numbers of people feel dissatisfied and determined to relieve their anxieties through the development of an appealing image for others to see, complete with the possessions and experiences—fancy vacations captured in snapshots—others could admire. Image-making became so important in everyday life that family photos and homemade videos were typically composed and later edited to mimic the work of professionals. And if the professionals did ever appear to conduct an interview, they often discovered that their subject understood what was expected of him when the camera was focused and the reporter tilted the microphone in his direction. With the exception of, say, the on-site reporting from natural disasters, the man on the street took pains to present himself well for the viewers.
According to a theory Lasch favored, every culture socializes children in distinct ways, to meet the demands of their time and place, and therefore creates discernible types of personalities. As postwar American society divided itself into winners and losers defined by their status as consumers, the best equipped to “win” were those most driven by a need to acquire wealth and attention. He theorized that grandiosity, which sees all that is good in one’s self and all that is evil in others, was the natural outgrowth of this drive and the hallmark psychopathology of the late twentieth century. Where once Americans were merely neurotic, or obsessive, they had become, in Lasch’s view, dangerously self-indulgent and deluded.
Quoting research by experts in fields as varied as anthropology and business management, Lasch argued that grandiosity was epidemic. He reported that psychiatrists were seeing a broad decline in patients suffering from everyday neuroses, along with a spike in narcissism. While sometimes malignant, this trait was not necessarily a sign of mental illness. It could also be a functional response to workplaces and communities where success required the ability to make a powerful impression and manipulate others. But for those who sought to be truly important figures, it was not enough to merely succeed. “Success in our society,” he wrote, “has to be ratified by publicity.”
Publicity came so naturally to Donald Trump, who grew up watching his father accept plaques and present bathing beauties to the eager press, that he was able to grab more than his almost without trying. He got the attention of New York Times reporter Judy Klemesrud in 1976, long before he would acquire a single Manhattan property or, in the parlance of his trade, “put two bricks together.”
In the summer of 1976 Klemesrud contacted Trump for one of her celebrity roundup pieces. As she once explained, these articles began with her imagining a useful question and then phoning famous people until she obtained enough replies to fill out an article. In July she included Trump in a piece intended to advise tourists on “favorite haunts” of “notable New Yorkers.” Happy to be considered a notable New Yorker. Trump recommended that visitors trek to Brooklyn or Queens to take in the skyline, which was his favorite New York attraction. In the next paragraph Harry Reems, star of many pornographic movies, suggested an arcade in Chinatown where, for a quarter, anyone could see a live chicken dance.
A few months later, Klemesrud followed Donald Trump around Manhattan, sampling a day in the life of a young man with “dazzling white teeth” who “looks ever so much like Robert Redford.” (Redford had recently dazzled, on-screen, as the mysterious Jay Gatsby.) Although he was chauffeured in a limousine bearing the vanity plate DJT and frequented hot spots dressed in flashy suits and matching patent-leather shoes—he chose the color maroon for his day with The Times—Trump insisted he was publicity shy. He also told Klemesrud that he was worth “more than $200 million” and had “probably made $14 million” on California land deals “in the last two years.”
Overcoming his shyness Trump explained to the reporter that “flair” was one of the keys to success for a young man in New York and revealed that he had graduated at the top of his class at the Wharton School. He said that though he was often mistaken for Jewish, he was actually Swedish. Even so, the National Jewish Hospital of Denver was going to honor him as a “man of the year” at an upcoming banquet at the Waldorf-Astoria.
Klemesrud, who came from small-town Iowa, wrote in a gushing style that made the big city and the people in it glow a little bit like Oz. (Hers was a view of New York and its characters that probably made readers feel that their city was a special place.) She published Trump’s statements with remarkable credulity, which allowed The Times to present him as person worthy of precious space in its pages. She also permitted his father to declare, “Donald is the smartest person I know.”
The only doubts in the article about the remarkable Mr. Trump were expressed by an anonymous banker and the architect Der Scutt, who allowed that his patron “will exaggerate for the sake of making a sale.” At age forty-two, Scutt was twelve years older than Trump. He had been born near Reading, Pennsylvania, and like Trump had gone into his father’s business and was attempting to outdo the old man. He had changed his name from Donald Clark to Der, which means “the” in German and obviously communicated his desire to outstrip his father. He also took up pipe smoking. He spoke of Trump as an exuberant boy rather than a malicious liar.
In toto, Klemesrud’s effort yielded a picture of wealth, danger, sex, and boyish enthusiasm, as if Trump were the James Bond of real estate. Klemesrud wrote that he dated “slinky fashion” models and belonged to “the most elegant clubs.” When she asked if he contemplated marriage, he responded as if a wife would be a kind of accessory or acquisition. “If I met the right woman, I might get married, but right now I have everything I need.” She also let readers know that Trump’s chauffeur was a New York City police officer who had been laid off due to the city’s financial crisis and always carried a loaded revolver.16
Why would Donald Trump require an armed, police-trained driver? No explanation was offered, but readers were free to deduce that like the fictional Jay Gatsby, if not the real Robert Redford, Trump lived on the edge of violence. In fact, construction in 1970s New York was still under the influence of organized-crime figures, who controlled some unions as well as the price and supply of concrete citywide. That Trump might require an armed driver was plausible, which made it one of the more reliable claims in the article.17 The $200 million fortune? Donald’s father may have been worth that much, but he was not. His class rank at Wharton? Nobody knows.
Of course, no one followed up on Klemesrud’s piece to determine whether it was accurate. This was a soft-focus profile, not an exposé. Nothing much would be gained by a journalist chasing down the truth about a young man who might, or might not, prove to be a significant figure. Beside, The Times was known as the august “gray lady” of the news business, a gospel source that defined reality for everyone else. If the paper decided Donald Trump was worthy, then he was worthy.
Within days, the article produced the result desired by anyone seeking to be a celebrity—more publicity. Trump was invited to appear on Stanley Siegel’s morning talk show aired by Channel 7. An attention-getting phenomenon, Siegel was famous for provoking guests and regularly undergoing psychotherapy on the air. He one-upped Klemesrud, hyping Trump as a “real estate tycoon.” (She had called him a “real estate promoter.”) An easy reference point, the term tycoon helped everyone understand Trump as a celebrity. That it didn’t fit him didn’t much matter. In a time when just about everyone sought to create an image, most people did not look behind these descriptors. Donald Trump, a military-school graduate who had painstakingly polished the brass of his uniform, was possessed of an exquisite intuition when it came to his image. He could not be expected to let anyone see past it. His father, whom Klemesrud quoted, was equally invested in promoting his son. But if she had turned to Trump’s bodyguard/chauffeur, she might have heard an insight that would have disrupted the cliché picture while rendering the subject more human and more likable. Decades after he had left the man’s employ, Trump’s first bodyguard/chauffeur, Robert Utsey, recalled him as considerate, generous, and sincere:
The job he hired me for was posted in the police department jobs bank, which was developed for the officers that were laid off by the city. I was new, just on probation at the Forty-Third Precinct in the Bronx, so I was laid off.
I went to the Trumps’ office in Brooklyn to interview. There were about seven other guys there. I waited my turn, and when he interviewed me, I told him I was the best driver in my academy class, which was true. They tested us on a course. I had the best times with the fewest mistakes. I also had a background in karate, which he liked. I got the job.
The pay was equal to a police salary, and that included overtime for nights. There were a lot of nights because he went out a lot, but I was single, so it worked out. When I got married, he came to the wedding and gave us a nice present, which he didn’t have to do. When my wife was pregnant, my wife chose a doctor who wasn’t in the medical plan, but he paid for it, which was about a month’s salary. When the baby was born, he bought the car seat that we brought her home in.
He was a nice guy who was never anything but good to me. He expected loyalty but he was also loyal back. When I got the chance to go back to the police department, it was a difficult decision because I liked working for him. Later on, when people started saying all the negative things about him, it didn’t make sense to me. The guy I knew then was a good guy.18