5

Tax Break Hotel

“Well,” said the magnate, “I see our friend Mr. Cowperwood has managed to get his own way with the council. I am morally certain he uses money to get what he is after as freely as a fireman uses water. He’s as slippery as an eel. I should be glad if we would establish that there is a community of interest between him and these politicians around City Hall. I believe he has set out to dominate this city politically as well as financially, and he’ll need constant watching.”

—THEODORE DREISER, THE TITAN

If I hadn’t finally convinced the city to choose my West 34th Street site for its convention center and then gone on to develop the Grand Hyatt, I’d probably be back in Brooklyn today, collecting rents.

—DONALD TRUMP, THE ART OF THE DEAL

Michael Bailkin has the throaty, soothing timbre of a psychiatrist and, when thinking out loud about the structure of a real estate deal, the creative dexterity of a jazz pianist.

When Donald Trump met him in 1975, Bailkin was a midlevel bureaucrat in a busted city, with more ambition than purpose, hidden away in the tiny offices of the Beame administration’s Lower Manhattan Development Corporation. Trump had come to him seeking city assistance to redevelop a small downtown property, and Bailkin had rejected the idea over a lunch in the nearby Woolworth Building. But Trump must have liked something about the five-foot-six, bulldog-shaped Bailkin. A few weeks later, on a sunny early fall day, Trump returned, without an appointment, looking for advice about a giant midtown project far beyond the reach of Bailkin’s neighborhood office. The project would change both Bailkin’s and Trump’s lives.

Though only thirty-five years old, Bailkin had already been chasing dreams for a lifetime, running away from his pharmacist father’s Philadelphia home at the age of fourteen to join a motorcycle gang taking a run through the Deep South. His Harley, an equalizer for a puny Jewish kid from a tough Italian slice of Germantown, also attracted the interest of redneck cops and earned him a stint in a North Carolina jail. Then, at sixteen, Bailkin falsified his age to get into the army early, did a tour in a Panama jungle warfare training center, and wound up court-martialed. Next he became a roustabout in a traveling circus, putting up the big top and sweeping elephant droppings. Bailkin crammed a college and law school education in between escapades in the Danish merchant marine, the Peace Corps in India, and a martial arts academy in Japan.

When he met Trump he had been a lawyer for a mere five years, only one of those years on the private side of the negotiating table, mostly shuttling from one government job to another. Marriage and a five-year-old daughter had settled him, but it did not take Bailkin long to see in Trump the promise of a bold new adventure, a deal that could catapult two careers.

“I’ve got to show you this,” Trump exclaimed, and pulled out primitive drawings of his redesign of the Commodore, the decaying East 42nd Street hotel that he and Ned Eichler had been talking about for months. The sixty-year-old hotel was a tired, brick 1,600-room relic on the Lexington Avenue side of Grand Central Terminal. In the 1920s the crowded hotel’s slogan was “Always a room and a bath for two and a half.” But now its rooms were empty 60 percent of the time and its lobby storefronts were taking on a pornographic West 42nd Street look, home to establishments like Relaxation Plus, a second-floor massage parlor whose additional services were neither difficult to imagine nor expensive to buy.

Bailkin listened to him argue that a glitzy new façade tacked to the old brick, and some refurbishing inside, would transform not just a never-grand hotel, but also a prime and troubled avenue in the heart of a crisis city. Bailkin was both annoyed and amused, as so many were and would be, by the shameless shilling of the kid.

The names rushed out of Trump’s mouth: Hyatt would manage it. Equitable Life would finance it. Abe Beame, his father’s friend, would support it. His Palmieri allies at Penn Central—who’d just granted him the West Side option—had agreed to sell him the hotel as well. But he had a problem.

There would be no deal without a tax abatement. No one would finance what he said would be an $80 million renovation without assurances that the rebuilt hotel could save enough on property taxes to reliably make its mortgage payments. Trump told Bailkin that he had already tried to wrest an abatement out of the state legislature, with the city’s support. Two of his dad’s old Madison Club friends, Beame and Assembly Speaker Stanley Steingut, had combined to push a bill in Albany for a twenty-year partial tax reduction on all commercial development projects like this one. The Commodore deal had been one inspiration for the legislation, and Donald said he had worked directly with Beame’s economic development commissioner, Alfred Eisenpreiss, designing the city-backed bill. Donald had lobbied through the 1975 session, but the bill was lost in the fiscal crisis panic, and Donald was too impatient to wait for the next January-to-July legislative session. Could Bailkin, Donald wanted to know, come up with an alternative abatement mechanism, preferably one that allowed for an even bigger tax break? Bailkin was puzzled as to why Trump was asking him this question. It was common knowledge in government circles that Fred Trump and Abe Beame went way back, and there was no doubt in Bailkin’s mind that Donald could get the highest-level administration audience to entertain this proposition.

Although Bailkin may have seemed an almost obscure figure in a vast bureaucracy, he just happened to keep a desk at the Lower Manhattan local office as a matter of convenience and was actually counsel to all the city’s neighborhood development corporations—a status, however, that he had not mentioned to Trump at their first meeting. He believed Donald didn’t know what his broader title was, nor that he had privileged access to First Deputy Mayor John Zuccotti. Zuccotti used him as a semisecret sounding board, and sometimes executioner, for complex development matters. But Bailkin knew that Zuccotti would have told him if he was delivering Trump to his door. No, Bailkin suspected. Trump had dropped in because he happened to be in the building, which was right behind City Hall and filled with various city offices. In Bailkin’s mind even years later, this historic meeting had a classically accidental quality to it.

Putting a development question to Bailkin, though, is like pulling the cord on a brand-new Chatty Kathy doll. A plan came to him in an instant. Trump would buy the property from Penn Central and donate it to the city. Then the city would lease it back to Trump for ninety-nine years. While the city would nominally pay full taxes on the property to itself, Trump, as a mere tenant, would pay none. Instead, the city would charge him a rent that was the equivalent of some negotiated portion of his prospective tax bill. Donald liked the sound of it. It was a potentially more lucrative abatement than the Steingut-Padavan bill, because it could continue as long as Abe Beame, and the seven other politically interdependent members of the Board of Estimate, were willing to authorize it to run. Donald immediately decided he couldn’t get along with a day less than half a century. Theoretically, the abatement could also be for as tiny a fraction of the normal tax bill as the same board, or the bureaucrats who drafted the lease’s fine print, were willing to impose. Donald knew he’d prosper with such wide-open discretion built into the plan.

He quickly contacted Sandy Lindenbaum at his Manhattan law firm. Lindenbaum, who was just beginning to establish his own credentials as a powerbroker at the Board of Estimate, called Bailkin to discuss the leaseback idea. Lindenbaum liked it, too.

Bailkin would get his own reward rather quickly. Soon after their lunch Donald went to Commissioner Eisenpreiss and suggested he pull Bailkin in from his neighborhood outpost to do the deal. Eisenpreiss did not know who Bailkin was, but he called him anyway. He told Bailkin that the city was already committed to the Commodore renovation, had pushed the Steingut-Padavan bill to implement it, and was intrigued about the new mechanism. He asked Bailkin to work on turning the broad concept into a practical plan. Zuccotti called, too, and gave Bailkin a mandate to proceed.

The onetime behind-the-scenes Bailkin suddenly became a familiar face at City Hall, talking with Eisenpreiss and the two deputy mayors who had become counterpoints within the Beame administration—Zuccotti and Stanley Friedman, longtime secretary of the Bronx Democratic Party and the cigar-chomping symbol of the Beame team’s hack underside. Suddenly the central player in the city’s only major ongoing economic development deal, Bailkin also began meeting with Charles Goldstein, a jowled, prematurely middle-aged lawyer close to city comptroller Jay Goldin.

Goldin was the only member of the Board of Estimate who worried Trump. His office had both the capacity and the responsibility to do a hard numbers-crunching review of the abatement. Having just taken office in 1974, Goldin, a maverick former state senator nicknamed The Young Dynamo, needed to be leashed to the deal. Trump and Lindenbaum had already met with Goldin to discuss it, and Goldin had asked his long-standing friend Goldstein to act as a kind of unofficial, pro bono, counsel for him, analyzing the terms. Goldstein had been the treasurer of Goldin’s last state senate race in 1973; he and four of his partners were also the treasurers of fifteen different fund-raising committees for Goldin’s 1973 race for comptroller. Putting him into the mix may have been Goldin’s way of dangling an invitation before the ever politically generous Donald.

In his meetings with Bailkin, Goldstein kept raising problems in the deal. He was concerned that once the city owned the property, it would have to put it up for public bidding, rather than simply lease it back to Trump. More important, he questioned whether the city had the statutory authority to pass the property back to Trump under a long-term lease without passing the tax burden as well. Bailkin was convinced he was right on both counts, but couldn’t satisfy the adamant Goldstein. Finally, Bailkin suggested a dramatically revised new mechanism: “Why not use the state’s Urban Development Corporation?” Goldstein seemed stunned, and pleased. “The only thing wrong with that idea,” he declared, “is that you thought of it.”

The UDC option, indeed, had a number of advantages over the city concept. This state super authority had been created by Nelson Rockefeller in 1968 as a housing agency, empowered to override all local ordinances and build integrated housing throughout the state. It tried, and in 1975, it collapsed. Its near bankruptcy had helped trigger the ongoing city fiscal crisis.

Though moribund, the agency still possessed great powers: It could, among other things, condemn the commercial tenants in the Commodore, bypass building code requirements, and grant automatic and full tax exemptions to projects without public bidding. These extraordinary weapons had ostensibly become part of UDC’s arsenal to pursue the grand integration objectives invoked by Rockefeller while he marched in Martin Luther King’s funeral—on the day the UDC bill passed the state legislature. Bailkin, Goldstein, and Trump—an unelected triumvirate of ambitious men—would now move to put this arsenal at the service of Trump profits.

Goldstein had another reason for being interested in Bailkin’s suggestion: He was already on retainer to UDC. Neither he nor the agency had ever done an economic development project together. But Trump’s Commodore, the first of what would prove to be a string of joint city-UDC economic development projects, would lead to millions for Goldstein in legal fees over a period of years.

“I suggested that UDC retain Goldstein for the Commodore,” matchmaker Bailkin would later say. “I thought it would secure Goldin’s vote for the project.” Bailkin even arranged it so that Trump, and each of the subsequent developers at UDC, paid Goldstein’s bills even though Goldstein was UDC’s lawyer. While this sort of financial arrangement would hardly put Goldstein at the service of any developer paying his tab, he did become, over the long haul, an advocate of Trump interests on several aspects of the Commodore deal. In any event, just as Bailkin anticipated, Jay Goldin routinely supported the Goldstein-vetted UDC projects, beginning with Trump’s, though he audited and berated other tax abatement programs. Goldstein’s firm continued to play its fund-raising role for Goldin, contributing $16,000 to him during the years it would take to finish the Commodore project and acting as treasurer of Goldin committees. Donald Trump donated $2,000 to one of those Goldin committees.

The other reason it made exquisite political sense to involve UDC was that Hugh Carey had just become governor at the beginning of 1975, and though he may have shed fifty pounds during the 1974 gubernatorial campaign, he hadn’t lost his old-time Brooklyn machine allies. Bunny, Fred, and Donald Trump had been among his biggest and earliest backers in the 1974 race. Bunny loaned Carey $40,000, and the Trumps had put up $1,200 to get the first phone lines into Carey’s headquarters, cosigned a $23,000 start-up loan, and contributed outright another $35,000. Early in the Carey campaign, Ned Eichler, Trump’s friendly benefactor at Penn Central, had scheduled a lunch with Trump at the Four Seasons, and when a late Donald finally appeared, he was bursting with excitement about Carey, explaining that he had been held up at a campaign function. “Carey’s a wonderful guy,” Donald announced in a booming voice that could be heard six tables away. “He can be trusted. He’ll do anything for a developer who gives him a campaign contribution.”

Once Bailkin, Goldstein, and Trump had agreed on the use of UDC, the project took on new momentum. For the first time, the mayor himself was called to a City Hall meeting on the plan, as was the secret force front Avenue Z, Fred Trump. Fred’s presence had been explicitly requested by Zuccotti to make sure that an experienced real estate person was behind the deal. Asked directly what his role would be, Fred replied: “I’m going to watch the construction and provide financial credibility.” Whatever this declaration actually meant, the mere appearance of the wily and wealthy patriarch seemed to deflect questions about the financing for the project. There certainly wasn’t much other evidence that the deal was fundable.

Handwritten notes of a city official, for example, scrawled at an early 1976 meeting that included UDC, Bailkin, Trump, and others, reveal that Donald’s much ballyhooed “commitment” from Equitable Life to provide the long-term financing for the project was only “oral.” When pressed for assurances about this loan, Donald would claim that “the lenders don’t want to meet with officials,” though he did offer confirmation of the commitment from broker Henry Pearce, who he said “could meet on behalf of the lenders,”

But Pearce was working for Donald, not the lenders, and the sixty-seven-year-old financial adviser had, in fact, spent months touring the boardrooms of the city without picking up a committed dollar. Equitable had actually delivered what Pearce would later call a “knockout blow,” rejecting Donald’s $75 million request, saying that the most they would lend was $25 million and insisting that Pearce find a lead bank to act as a joint venture partner.

Much later, Donald would confide in his own book, The Art of the Deal, that he’d been so frustrated by banker resistance to the project that Pearce had to talk him out of abandoning it. Instead of giving up, Donald concluded that “the only way to get financing was if the city gave me a tax abatement.” And the only way to get the abatement was to mislead the city into believing that he already had the elusive financing.

But Donald had not only made misrepresentations about the certainty of his financing, he’d also created the illusion that he controlled the Commodore site. As early as May of 1975 the Daily News quoted him as claiming that he had a “purchase contract” with Penn Central to buy the Commodore. In 1976, while the Board of Estimate was considering the abatement, the Times quoted him as saying that he had “an option—with no particular time limit—to buy the Commodore for $10 million from the railroad trustees.” Bailkin and Zuccotti certainly knew that Trump was overstating his claim to the property. As early as December 1975 the Palmieri company had written Zuccotti a letter specifically stating that they were “negotiating with Donald Trump to sell the Commodore to a corporation controlled by Mr. Trump,” with no mention of an existing option or a purchase agreement. When the city did ask Trump for a copy of the option he periodically claimed to have, he sent them one. No one paid much attention to the fact that the option bore only Trump’s signature. While Trump’s friends at Palmieri did meet with Bailkin and left the impression that they planned to sell the hotel to Donald, it wasn’t until almost a full year after the abatement was granted that they signed an option.

The third critical element—a first-class hotel operator—was also uncertain. At first Donald had brought in the Westin Corporation, but they’d dropped out abruptly. He then moved on to Hyatt, which had agreed to join him at a 1975 press conference announcing, with great fanfare, the chain’s nonbinding intent to manage the hotel if it was ever built. The tentativeness of this commitment was so apparent to the city and state, however, that every formal agreement with Trump up to the closing left open the question of what company would actually manage the hotel.

With all the uncertainty at the very heart of Trump’s deal, it nonetheless moved forward with its own peculiar magic and logic. While it was true, Bailkin would concede, that no other party had been given an opportunity to submit a bid on the project—one that might have inflicted less of a tax loss on the city—he believed he had to cut the deal with Donald. He thought Donald had earned an exclusive right to do the deal since it was Trump’s entrepreneurial impulse in the first place. He also contended that Donald was the only feasible developer because he had Palmieri’s implicit support. And he was convinced that in the final analysis the project would pay long-term dividends for both Trump and the city. So, when pressed by reporters about a potential Trump windfall built into the abatement, Bailkin acknowledged that it was “possible for Trump to make high profits” and added, “I think that’s excellent.” Instead of acting as the city’s final assessor on the merits of the deal, Bailkin had become in effect its in-house advocate.

Bailkin was also given the job of camouflaging this tailor-made Trump giveaway as some sort of broad, new administration approach to development. Zuccotti urged him to figure out a way “to make [the Commodore] a program or a new development policy, not just a one-shot Trump project.” The handwritten instructions in one city memo said simply: “Rather than announce the project, announce the program with this as the first project.” Bailkin therefore dutifully put together an ex post facto plan to cover the Trump largess with a good-government veneer, and Beame announced it as the Business Incentive Program in February of 1976, getting front-page Times attention. Zuccotti sent a formal letter to UDC inviting its participation in this grand, new, amorphous scheme and two days later sent another letter asking the agency to do the Commodore project as the prototype of the program.

As wired as the deal was on the city side, however, there was a roadblock awaiting it at UDC. While the governor might have been an old Trump hand, his designee in charge of UDC was nobody’s pushover. When the authority hit rock bottom in 1975, Hugh Carey had installed the skillful and independent Richard Ravitch as its unpaid chairman. The millionaire builder had already decided to spend much of his life in public service, and his appointment was Carey’s attempt at a reassuring brahmin message to the banks. Ravitch’s third-generation family business (HRH) and scholarly demeanor—he saw himself as a gray eminence before he was either gray or eminent—positioned him, he believed, above the fixes and fray in the trenches. This did not mean, however, that he was above politics—he indeed saw himself as a possible candidate to succeed Beame as mayor in 1977. So the Trump project posed a complex set of problems for Ravitch.

He certainly was aware that Carey was beholden to the Trumps; indeed the governor had named Donald to his housing advisory group as soon as he took office. And then there was his own and HRH’s history with the Trumps: He respected Fred, but did not like the brash, overreaching style of the younger Trump. Their sparring match over the West Side yards had left a bad taste in Ravitch’s mouth. While he remembered Fred’s appetite for private profit in public projects as a bit excessive, he sensed that Fred’s son knew no limits. The terms of the Commodore deal struck Ravitch as just too rich an abatement for Donald.

When Trump first went to meet with the wary Ravitch, he overplayed his hand by bringing along his new employee, Louise Sunshine, the governor’s chief political fund-raiser. The daughter of a New Jersey real estate family, Sunshine was at that very moment in charge of raising several million dollars to pay off the governor’s 1974 debt and to prepare for a 1978 reelection campaign. In addition to her volunteer role as director of the Friends of Hugh Carey committee, she was the Carey-installed treasurer of the state Democratic Party, a national Democratic committeewoman, and a board member of the state Job Development Authority. Just four months after Carey took office, Donald had begun talking to her about coming to work for him. But since he was still just an employee of his father’s without a staff of his own, a charmed Sunshine began in the latter half of 1975 to lobby for his convention center site without getting paid. Married to a wealthy doctor, the heavyset Sunshine undertook her early lobbying for Donald as a form of pre-employment work, getting a large foot in promising doors.

Her efforts for the Trump site were widely interpreted as a signal of the governor’s support, but site selection was a city, not a state decision. So all Sunshine’s state contacts could produce were influential endorsements of Trump’s controversial site. She could be a far more decisive factor on the Commodore, however, since it was now being proposed as a state project. So two days after the city’s first meeting with UDC brass about the agency’s possible participation in the Commodore project, Trump actually hired her. The press announcement suggested that her only role with Donald was to coordinate the convention center effort, but her appearance at the Ravitch meeting suggested another agenda.

Ravitch was aghast when Sunshine arrived and became even angrier when Trump “hinted that they’d go over my head,” as he recalled it, if there were problems at the agency. “Don’t raise money for Carey and go around representing people here,” bellowed Ravitch. The city-toughened Sunshine’s capacity to shift from sweet solicitation to brusque aversion had set speed records in the highly competitive circles of hard-nosed New York politics. But Ravitch’s directness proved too much for her, and she broke down in tears.

Trump tried to salvage the situation with a hurried letter to Ravitch, claiming that he’d been working on the Commodore for a year and that Sunshine “has not been involved.” He insisted that Sunshine had become “aware of those activities only last week” and promised that she would “work exclusively on the Convention Center and have no involvement with any aspects of the Commodore project, either on the staff or decision-making level.” Ravitch nevertheless called Carey and told him he “thought the whole thing with Sunshine was tasteless.” He described the Trump proposal to the governor and, conceding that the project had no financial implications for UDC, said he was concerned about whether or not it was “prudent public policy.” Carey told him to do what he thought was right.

Ravitch pressed the city to obtain a better deal, warning in writing of a Trump windfall. He insisted that Equitable come forward and commit on the financing, offering to subordinate the property taxes to the mortgage, which would’ve meant that any financial institution backing the project would be assured of getting its regular payments before taxes were paid. And finally, he warned that the city had to see to it that Trump didn’t just mortgage out, using the generosity of the abatement to get financing that exceeded the total project costs. Ravitch wanted a mechanism to assure that Trump put real equity into the Commodore project. When each of his suggestions was rejected by the city, it became clear that he could not fundamentally change the elements of the deal.

The pressure on Ravitch was tremendous. The two top Democratic legislative leaders in Albany—Steingut and Senate Minority Leader Manfred Ohrenstein—called to push him to do the deal quickly. A prominent West Side liberal, Ohrenstein had been pulled into the Trump camp on the convention center and the Commodore by Sunshine, who was also fund-raising for his Senate Democratic committee. He had reversed himself on the convention center site, after having opposed the 34th Street location when others suggested it years earlier. Ten thousand Trump dollars found their way into his campaign coffers at the same time as his switch.

Ravitch also felt the heat of personal calls from Abe Beame and John Zuccotti. A massive city-assisted housing project on the far West Side on 42nd Street called Manhattan Plaza, under construction by HRH, Ravitch’s family company, was in dire trouble. The fiscal crisis had forced the city to suspend making mortgage advances on the project, and Ravitch was now looking for a joint city-federal bailout. The Commodore controversy was putting him at war with the very officials who held the fate of his own business in their hands—just one more complication for a man struggling with many.

Undaunted, Ravitch began working behind the scenes, feeding information on the deal to several aggressive Manhattan city councilmen, including Henry Stern, who began pushing the city to better its terms. This guerrilla warfare led to yet another Bailkin idea, geared to counter the objections of the Stern group and Ravitch. This one, finally, pushed the deal over the top.

Bailkin had by then become a social friend of Donald Trump’s. Donald liked to frequent a Third Avenue bar called Harper’s, which was often filled with gorgeous models. Trump and Bailkin sometimes talked well into the night there, and the subject was usually business. Donald never really relaxed at the bar and rarely started a conversation with a woman. When he did make a move and pick up a phone number, his selections seemed to Bailkin to be triggered by the impact the woman might make on a room, never his ease with her.

But through it all, Bailkin saw past the blowhard in Donald and decided he liked him. While the older, more experienced government people who met Donald during the Commodore discussions dismissed him as shallow and offensive, Bailkin prided himself on being one of the first to see the substance behind the show. He realized that Donald was trying to co-opt and seduce him, but he also believed they had developed a genuine friendship. In the middle of the negotiations of the final terms of the deal, the two grew closer still, with Donald even occasionally touching on his personal troubles in their private talks—including the alcoholism of his older brother, Fred Jr., who was nearing forty years old and doing little with his life.

Bailkin’s final Commodore proposal, first broached in one of these bar conversations, was a percentage rent on Donald’s profits. The initial deal had required Donald to make only a flat rental payment, increasing every few years at first, then easing upward annually over the life of the abatement until it reached full taxes forty years into the future. The stretching out of the abatement over four decades was the special grease Donald had brought to the deal; Bailkin’s new scheme would limit the grease.

Bailkin raised the subject of a city slice of Donald’s profits deceptively. He told Donald that City Hall and the Board of Estimate would not go along with the deal without a sliding scale of secondary rents pegged to his revenue. In fact, Bailkin had been meeting only with the city council critics, and no administration official had forced him to seek this concession. Trump at first adamantly resisted, but eventually assented to the terms. Once they had an agreement on the concept, they began to hammer out the specifics, until Donald came to one of the numbers sessions with a look of angry recognition on his face.

“This is all you!” he blew up at Bailkin. “Nobody in City Hall is demanding these things, nobody gives a shit.”

“No,” Bailkin insisted, “this comes from the highest levels.”

“Bullshit!” Trump screamed. “No one cares but you.” Bailkin smiled an acknowledgment, but said Trump had already agreed to the concept, and was now committed to it.

When the deal was finally submitted to both the UDC board and the Board of Estimate, the percentage rent was included, but only vaguely described. Bailkin had won on the concept, but he had agreed to put a cap on the percent of profit the city could take so that Trump would never pay more than full taxes, and he had left the definition of profits to the framers of the actual lease, which wouldn’t be drafted until after the authorizing resolutions passed both boards.

The UDC vote came first. To allow it to qualify as a UDC project, the board had to stretch its statutory authority in new directions—defining a hotel renovation as an industrial project and finding East 42nd Street a “substandard area.” Four of the board’s six members had to support the project if it was to pass, and only four did, with the other two votes abstentions—an almost unprecedented occurrence for the usually unanimous group.

One of the favorable votes was cast by the Bowery Savings Bank’s vice president Pazel Jackson. The Bowery’s main branch was located right across the street from the hotel, and the bank had written the city a strong letter of support for the project, warning that the Commodore was “a major blighting influence in midtown Manhattan.” The bank was ultimately so moved by the need to dress up its own neighborhood it became the lead bank on a $45 million syndication to finance the project. But the decisive vote in favor was cast by the man of two minds, Richard Ravitch. He would later publicly declare it “a mistake.”

The UDC vote left one more hurdle: the Board of Estimate. Opposition to the project was, however, beginning to coalesce. The Hotel Association and individual hotel operators like Harry Helmsley were criticizing the deal as overly generous. They wanted to know how they were supposed to compete at full taxes with the newest hotel in town paying virtually none. Henry Stern now had all but one of the Manhattan city council delegation vociferously opposed to the giveaway terms, but the council did not have the power to vote on land use issues. When the council members held a press conference in front of the hotel to question the deal, Trump suddenly appeared and warmly greeted his critics. It was one of his favorite ploys—a measure of his disarming confidence. He even offered Stern a political contribution.

The city board’s vote was postponed three more times, but not because any one member was ready to oppose it. A few were just not certain they wanted to approve it and were looking for some improvement in the terms. A dramatic act was needed to finally get it to a vote, and Victor Palmieri provided it: The day before the scheduled board vote, he closed the hotel. While the company had indicated a possible September closing, the suddenness of the action was a shrill demand for passage, at last, of the abatement plan.

The closing had all but been dictated by the city and state. As UDC’s executive director expressed it in a series of March internal memos: “The closing of the hotel must be imminent and definite to provide a basis for a blight finding required for an industrial project under the UDC Act,” meaning that UDC could only use its extraordinary powers to revive the hotel if it was shut. “When the hotel is closed and boarded up,” the UDC executive noted, “the property WILL BECOME a major blighting influence,” suggesting that the state was now in the business of encouraging blight to justify the use of its power to combat it.

On May 20, 1976, the board, which met in the upper floor of City Hall, unanimously passed the Commodore deal, amid proclamations about how the project demonstrated the confidence private investors still had in the struggling city. In fact, Donald still had no option on the hotel, and had stalled obtaining it, thereby saving the $250,000 deposit he would have had to put down. Equitable had dodged any financing commitment as well. The private parties hadn’t put a dime on the table, while the public sector had delivered a gigantic and exclusive tax break. The debut project of this bold entrepreneur was, in truth, a breakthrough example of the new state capitalism—public risk for private profit. Trump had been handpicked by bureaucrats and politicians to become the solitary recipient of an unprecedented giveaway, stretched so far into the future that it was statistically likely to outlive even its thirty-year-old beneficiary. Though other projects were later funded under the incentive program created to justify Trump’s abatement, no other Manhattan hotel would ever receive so selective and grand a subsidy.

Mike Bailkin and UDC’s economic development director, Dave Stadtmauer, who had steered the deal through the state process, sat that night on the steps of City Hall savoring their triumph and sensing that the business incentive plan that had grown out of the Commodore deal might have also created an opportunity for them. Bailkin had recently asked Zuccotti for a City Hall position as a kind of development commissar, but with Eisenpreiss still in place the promotion just wasn’t feasible.

He had also talked to his friend Donald about his desire to move up or out of government. “I’d love to have you with me,” Donald had offered. “I’m going to be going places.”

“I think that might taint our deal,” Bailkin said. “I don’t think it’d be good for either of us.”

Donald agreed, but then suggested that Bailkin ought to “go to work for Roy Cohn, the greatest lawyer in the world.” Bailkin had taken this suggestion seriously and, at Donald’s invitation, met Cohn. But he was put off by the Cohn ego.

So that spring night, on a high over their triumph, Mike Bailkin and Dave Stadtmauer decided to open a law firm together. Bailkin would leave the city the next day, and Stadtmauer would stay on at UDC for a few months, to steer the Trump deal through a public hearing and the necessary second vote confirming a final project and plan. The new firm, Stadtmauer & Bailkin, would highlight their own specialty: economic development deals with the city and state. Bailkin had already lined up a major client—a nonprofit theater group—that would redevelop most of a block on the far West Side on 42nd Street, using the same new abatement program he’d designed for the Commodore. As a paid consultant to the city, he would also come up with the financing device that would soon make Trump’s convention center at 34th Street buildable—suggesting that the center use the state bridge authority to float hundreds of millions in bonds.

Ironically enough—perhaps because they’d decided to do it their own way—Stadtmauer & Bailkin would become one of the only major development firms in New York that Donald Trump would never retain.

Even though both UDC and the city formally approved the Commodore abatement by the spring of 1976, it would still take two long years before final closing papers were signed by all the parties and construction could start. Part of the delay was attributable to the mirage the project was when the resolutions authorizing it were approved, with title to the land, financing, and a hotel operator up in the air. But many practical public obstacles remained—a legally mandated UDC public hearing, a second vote of the state agency, and the negotiation of a detailed lease. The continued uncertainty of all the private pieces to the deal, particularly the bank loans, made it all the more difficult to nail down the state and city commitments. But Donald, with the withdrawal of Mike Bailkin, had a new ace in the hole.

If Bailkin had been the architect of the deal, Stanley Friedman was to become the mechanical engineer who would finally make it happen. “Bugsy” Friedman, who’d worked his way up the patronage career ladder from a Bronx clubhouse grunt to deputy mayor, was to the fix what Bailkin was to the structural concept. Indeed it was the master fixer, Roy Cohn, who had arranged Friedman’s and Donald’s first meeting, and as surely as the historical ties between Abe Beame and Fred Trump had made the abatement bonanza politically plausible in the early stages, the bond between Cohn and Friedman would guide it to conclusion.

Though Cohn had ostensibly been retained by Donald to handle a single piece of litigation, the Trumps’ racial discrimination case, he began in the midseventies to assume a role in Donald’s life far transcending that of a lawyer. He became Donald’s mentor, his constant adviser on every significant aspect of his business and personal life. Like Friedman, many of those with public and private power who met young Donald in those days were introduced to him by Cohn, whose Rolodex knew no bounds. The unmarried and childless Cohn, who concealed his frantic gay nightlife behind a façade of daytime homophobic toughness, literally adopted Donald. He began to see Trump as potentially his most successful protégé and instrument. While Cohn would ultimately be disbarred for stealing from other clients, he did not bill Donald for his on-call attentiveness, seeking occasional payments only when the firm was short of cash. There was no way to reduce what Cohn was getting from Trump—whom he saw as an extension of himself—to billable hours.

Cohn’s exploitation of Friedman to secure the Commodore booty was an unforgettable lesson for Donald, exposing him to the full reach of his mentor’s influence and introducing him to the netherworld of sordid quid pro quos that Cohn ruled. This almost ritualistic initiation not only inducted Donald into the circle of sleaze that engulfed Cohn, the bountiful success of it transferred the predatory values and habits Cohn embodied to his yearning understudy.

Cohn’s hold on Friedman was simultaneously rooted in the past and framed by future promise. In addition to his City Hall title, Friedman was also secretary of the Bronx party, which made him county leader Pat Cunningham’s right hand as well as his top city jobholder. Cunningham—whose three eventual indictments would exceed Friedman’s tally by one—was a confidant of Cohn’s. His father had been a Bronx judge and behind-the-scenes prince of the Bronx machine. To Friedman, a county leader like Cunningham was a near deity, all he had ever wanted to be.

In the middle of all the maneuvering around the Commodore deal, Friedman had actually been summoned to a grand jury probing Cunningham shenanigans. He hardly blinked. He would no sooner rat on the party’s leader than he would drop one of the boss’s contracts, and Friedman understood that the Commodore was a deal Cunningham wanted done. Cunningham backed it not just because of Cohn. Carey had made Cunningham chairman of the state party, and that meant Louise Sunshine was his treasurer. When she wasn’t over at Donald’s new two-room office at 466 Lexington Avenue—in Penn Central space offered Trump by the Palmieri group—she was in Cunningham’s party headquarters. In fact, Cunningham, Sunshine, Friedman, and a young Republican named Trump worked together in 1976 to bring the Democratic National Convention to Madison Square Garden.

But this sort of intertwine could not explain just how far Friedman was willing to go to seal the Commodore deal. It surprised no one who knew the deputy mayor that he would join Roy Cohn’s law firm the day after Abe Beame left office. He had, in effect, been working for the firm while he was running the government. Nothing more clearly expressed that premature private service than Friedman’s many efforts to protect the secret treasure trove that sustained Cohn’s millionaire lifestyle—namely, the cash hoards Cohn extracted from a half dozen city-owned parking lots leased to shell corporations headquartered at his midtown town house. As signed statements from the bagman who ran the lots for him later proved, Cohn’s principal source of cash was the thousands delivered to him weekly from these lots. Since the lots were supposed to pay a percent of their gross to the city, the siphoning of this cash to Cohn was indirectly depleting an already impoverished city treasury. Yet Friedman spearheaded the most lucrative leases through city processes to deliver them to Cohn, and he installed Cohn operatives at the leasing agency who looked the other way when the gross revenues at the lots came in at laughable levels. Friedman was designated to do much the same for the Commodore boondoggle. Even before Bailkin’s departure, it was Friedman who cast the mayor’s vote at the 1976 Board of Estimate meeting and helped steer the deal through the board’s political morass. And when Bailkin left, Friedman was the city’s chief defender of the project at the July 1976 public hearing hosted by UDC, calling the closed Commodore “a disease” that would “spread” unless it was renovated. He also coordinated the city’s successful legal defense in a lawsuit brought to challenge the abatement as an unconstitutional “surrender, suspension or contracting away of the power of taxation.” Friedman’s affidavit in the case falsely argued that the city had neither “initiated” nor “empowered UDC to proceed” with the project, but that it had merely been consulted by UDC before the agency decided to use its exemption powers.

And it was Friedman who pushed UDC for its final approval—a formal vote of its board in September 1976. A second vote was needed because the first had only authorized the agency to submit the proposal to a public hearing. This time the Bowery’s Jackson excused himself as soon as the Commodore item was called, apparently now wary of the bank’s conflict of interest. The state’s banking superintendent, John Heimann, a critic of the deal, abstained, as he had on the first vote. Without Jackson, the project needed a decisive fourth vote from insurance commissioner Tom Harnett, who had also abstained the first time. Harnett had already communicated his opposition to the deal to Ravitch, saying he had a “visceral” reaction to its “sweetheart” terms. But with the chips down, Harnett walked out of the meeting, too, leaving a half hour ahead of Jackson. Harnett’s special assistant, Murray Lewinter, thus held the fate of the project in his hands, and he cast the decisive vote for it.

Lewinter was a longtime Bronx district leader, had just succeeded Friedman as secretary to the Bronx organization, and was working in a patronage post as Harnett’s special assistant. Harnett himself had been appointed commissioner on Cunningham’s recommendation. Lewinter would say years later that he “only voted at Harnett’s direction,” and Harnett would express astonishment that his surrogate was recorded as casting the vote that made the Commodore deal possible. This manipulated UDC vote—engineered by Cunningham/Friedman operatives—was a precursor of the still-to-come sordid maneuvers that would finally lead to the execution of documents binding the city and state to the project.

But in the months between the UDC vote and the closing that Friedman would force before the Beame administration left office at the end of 1977, Donald agreed to terms on another deal that, like the Commodore, would shape his life. Though a bit more personal than the Commodore, this fateful transaction would also be framed in Roy Cohn’s law office. In the spring of 1977—while Donald busily hammered out the details of a comprehensive lease for the Commodore with state officials—he also quietly married Ivana Zelnickova Winklmayr.

In early 1977, Donald still had a business reason to go out for drinks with Michael Bailkin. When Bailkin left the city for private practice, he was retained by the administration as a consultant to advise it on two matters—the Commodore and the convention center. The only thing the two projects had in common was Donald Trump, obviously Bailkin’s area of expertise as far as the Beame administration was concerned. When he and Donald got together again at their old haunts, Bailkin noticed that Trump actually seemed interested, for the first time, in someone other than himself. He could not stop talking about a new woman in his life named Ivana. He told Bailkin that she had been on the 1972 Czech Olympic ski team and was now one of the top models in Canada.

Both boasts would become part of the Trump legend, and both were as true as his earlier attempts to convince Bailkin that he had an option and financing for the Commodore. In fact, Ivana was an unnoticed runway model for Montreal department stores, and the closest she’d ever gotten to the Olympics was public relations modeling she’d done for the 1976 Montreal Summer Olympics.

Two of the half dozen versions of how she and Donald met that they would eventually share with the media involved the Montreal Olympics. Their initial meeting was either at the games in 1976, or at a public relations event in New York to promote the games, or, as Ivana even told one magazine, when she was “competing” in the games. Another version had them meeting at Maxwell’s Plum, a chic midtown Manhattan watering hole, either when Ivana came to New York for a Canadian fur fashion show or during an Olympics promotion. They also may have met at someone’s house in New York, at a party in Montreal when Donald was on a skiing vacation, or at a fashion show there.

Several of Ivana’s model friends definitely recall having seen Donald at a Montreal show, where he seemed so smitten he “never took his eyes off her.” But these women thought the two had met fleetingly elsewhere and that Donald had come to the show expressly to watch her model. A tall, svelte, very poised model with “white-white teeth,” bared by a full-lipped and shy smile, Ivana’s accent and bearing set her apart from the New York women Donald was used to and vowed he wouldn’t marry.

However they met, the twenty-seven-year-old Ivana, born to a Czech father and an Austrian mother, had a classy, European manner that instantly had Donald in pursuit. She had, in fact, had a modest downhill racing career as a member of a Czech national team. But years later she was forced to concede in a sworn deposition that she had tried out for the Olympic team and been passed by, insisting that she’d never claimed otherwise. Asked to explain the origin of the legend, an exasperated Ivana sputtered: “I have brown eyes and they are saying in articles for 15 years I have green eyes.” Like so much else in the life Ivana would discover as a Trump, her own history had a way of magically reinventing itself, rewritten by the mythmaker she’d married. In late 1971, George Syrovatka, the boyfriend who’d coaxed her out of her rural Czech hometown to attend Charles University in Prague, arranged for her to marry an Austrian friend, Alfred Winklmayr, so that she could obtain a Western passport. Syrovatka, who’d met both Ivana and Winklmayr on the skiing circuit and was a leading Czech skier, had already defected to Canada. Even after her “Cold War marriage” to Winklmayr, Ivana remained in Prague until she finished school, graduating with a master’s in physical education in 1972. In the middle of these fundamental changes in her life, she fell in love with an Austrian poet who was killed in a car crash. It was only after his death that she followed Syrovatka to Montreal.

In 1973, while living with Syrovatka in Canada, her marriage to Winklmayr was dissolved in a Los Angeles court. Though she was pictured in the Montreal Gazette in 1975 sharing an intimate moment with Syrovatka in their Montreal apartment, and quoted as calling him her “husband,” there is no record of a marriage. When asked by one reporter if he’d been married to her, Syrovatka said, “Not exactly.” Ivana met Trump a few months after the cozy Gazette photo, and the persistent Donald quickly became a source of tension in her eight-year relationship with Syrovatka, who was by then a minor celebrity in Canada and its premier speed racer.

“I always considered George and Ivana as married,” Syrovatka’s brother Michael said later. “In my family, marriage is just a formality. My parents treated Ivana as if she was their daughter-in-law. That’s how George saw it, too.” Donald, as usual, seemed to relish the competition. Ivana began taking weekend trips to New York to visit him, and after they spent a few days together in Aspen, he first raised the subject of marriage, but only very tentatively. He brought her to the house in Jamaica Estates to meet an approving Fred and Mary. After only six or seven months of long-distance dating, she decided to leave Syrovatka and marry Donald.

As intrigued as Donald was by Ivana’s distinctive style, his attraction to her had the familiar trophy quality to it that Mike Bailkin recalled from their earlier conversations about women. This didn’t surprise Bailkin, who believed Donald could not talk about anything with genuine emotional depth. In fact, at the same time that Donald first told Bailkin of his plans to marry Ivana, Bailkin was going through marriage difficulties that would lead to a divorce and, even though Donald was a good listener when it came to business, Bailkin decided not to tell him about his own problems because he was convinced Donald was constitutionally incapable of responding. To Bailkin, Donald’s emotional range did not extend beyond a sensitivity to slights and profane outrage if he thought someone had tried to sucker him. Otherwise, Bailkin had concluded, Donald just coasted on a detached, emotionless plane, energized by his own compulsive ambition and oblivious to anyone else’s feelings. Bailkin would never forget one brief exchange he had had with Donald in what were clearly Trump’s halcyon days. Irritated by yet another Donald affront, Bailkin said to him: “You’re a very shallow person. . . .”

“Of course,” Donald replied, interrupting Bailkin in midsentence. “That’s one of my strengths. I never pretend to be anything else.” Watching Donald prepare for marriage reminded Bailkin of this proud declaration of uncomplicated superficiality.

Trump went about the marriage in his usual businesslike fashion. In March of 1977, he leased a two-bedroom apartment in Olympic Tower, an elegant new building on Fifth Avenue. The two-bedroom foresight was apparently as deliberate as it was fortuitous; eight and a half months after the two were married, Donald Jr. was born.

On March 22, Donald and Ivana signed a carefully drawn and detailed prenuptial agreement. The agreement was Roy Cohn’s idea. “You’re better off not married,” Roy had bellowed when Donald came to him to discuss the marriage. “It’ll just lead to trouble. I don’t know why you want to do this.” If Donald insisted, then he had to get her to sign an agreement that “would protect” the family’s assets, Cohn argued.

The two drafted the agreement at Cohn’s office, and one early version included a provision requiring Ivana to return any gifts Donald might give her during the marriage should they divorce. The demand provoked such protest from Ivana that it was replaced with language that explicitly authorized her to keep “her own personal clothing and express gifts from Donald or others.” To entice an angry Ivana back to the table, Donald threw in a $100,000 “rainy day” certificate of deposit only she could draw on that would be given to her within thirty days of the wedding.

Another draft offered Ivana lump sum bonus payments for each child, according to the aide who typed it. Donald’s attempt to include this provision, which also vanished in the final agreement, confirmed Ivana’s belief that Donald saw her as little more than a well-tuned baby machine, healthy enough to produce a brood of attractive and healthy children. “I want five children, like in my own family,” Donald told a close friend, “because with five, then I know that one will be guaranteed to turn out like me.” Ivana was well aware of this Trump child quota and mentioned it to a reporter early in their marriage. “He’ll get,” she calculated, “maybe two or three,” noting that she would love to work full-time, “but Donald’s afraid I’ll get so involved that I won’t have another child.” In the end, Donald would get the three children Ivana predicted, and Ivana would wind up with new nuptial agreements after the first and third child that would dramatically increase her scheduled alimony payments, just as the discarded bonus payment draft had anticipated.

The final terms of this first nuptial contained puny allotments for Ivana, giving her only $20,000 a year if their marriage split up immediately. If they remained married for nine years and then separated or divorced, she would still get a paltry $30,000 annually until she moved in with another man. Had the agreement still been in effect when the marriage actually did end—thirteen years later—Ivana would’ve had to make it on $45,000 a year. And if they had remained married for twenty-nine years under this agreement and Donald had died, Ivana would have been entitled to nothing more than a single half-million-dollar payment. These limited benefits were provided even though the agreement flatly asserted that Donald was “a multimillionaire,” and claimed that “the exact amount of Donald Trump’s net worth is impossible to accurately determine due to the illiquid nature of his holdings, which are worth millions of dollars.”

Donald also wanted to make it clear that she shouldn’t expect to live too well if they stayed together either. “Donald has explained to Ivana,” read the agreement, “and Ivana warrants that she is aware that Donald’s standard of living and lifestyle are neither opulent nor extravagant in that neither he nor the companies in which he has an interest own yachts, planes, or the usual appurtenances generally connected with large and substantial businesses . . . Ivana acknowledges that she is familiar with the fact that Donald’s standard of living is basically simple and will continue to be so after the marriage herein contemplated.” This gold-digger warning did not deter Ivana, though her transparent hunger for precisely the sort of extravagance depicted in the agreement may have been the reason Donald inserted it. Of course, this poor-boy passage was a doomed admonition, since even its author had no intention of living by it. Indeed, Donald’s catalogue of forbidden acquisitions would later look like his personal shopping list.

Ivana signed the agreement, acknowledging that she did it “having been fully advised by counsel of her own choosing.” Her lawyer, however, was Larry Levner, who was so close to Cohn he’d actually represented Cohn in at least one civil suit. When the divorce came years later, Ivana would claim that Levner had been handpicked by Cohn. Donald also pressured her to sign, pointing out that it was “much better for both sides to work out the details of a possible breakup while they are friends rather than after they have become enemies.” In Surviving at the Top he concluded that his arguments were “so reasonable that I would question the motives of a prospective mate who heard them and didn’t agree to go along.” Ivana—who’d already ended her relationship with Syrovatka and announced the marriage to her family and friends—acquiesced.

On April 9, 1977, Norman Vincent Peale married Donald and Ivana at his Marble Collegiate Church on Fifth Avenue. Ivana wore a two-piece chiffon full-skirted off-the-shoulder dress, with a long veil but no train. Everyone else was in black tie and long gowns. Donald’s sisters, Maryanne and Elizabeth, were bridesmaids, while Fred Jr. was the best man. Ivana’s parents came, as did many of her Canadian friends.

Mike Bailkin, who was part of the wedding party, thought Donald looked almost as happy at the reception at “21” as he had the day the Commodore passed the Board of Estimate. While the late afternoon ceremony seemed to Bailkin almost perfunctory and devoid of grace or joy, the evening party had a lively, ebullient air to it. Comedian Joey Adams, a lifelong Cohn hanger-on whose gossip-columnist wife Cindy would become Donald’s media confidant during the stormy divorce days in 1990, was the toastmaster, and the dinner party took on the tone of a combined power wedding and family affair, running until midnight.

Many of the 150 or so wedding guests were involved in the Commodore deal, including Bailkin, Beame, Sandy Lindenbaum, Roy Cohn, Henry Pearce, architect Der Scutt, and politicians like Queens Borough President Donald Manes, who had voted for the abatement as a member of the Board of Estimate.

With Sandy Lindenbaum’s work at the Board of Estimate largely completed, Jerry Schrager, a senior partner at Dreyer & Traub (the same firm whose name partner had been helpful to Fred in the early FHA days), was also there. Schrager had become Donald’s lead attorney on the unfinished aspects of the Commodore deal, particularly the lease itself.

Of course the old gang came, too, including Bunny, and a collection of Steinguts. Almost precisely forty years earlier, Fred Trump, also just thirty years old, had taken an immigrant wife, who would bear him a child as soon as practically possible and become a citizen years later. There were countless differences but, as with so much else about Fred and Donald, the commonalities were more than coincidence. Their lives had the feel of puzzle pieces, shaped to fit together in an unbroken interlock of mutual promise. With the Hyatt hovering over the wedding, the Trump breakthrough into Manhattan was finally visible on the horizon. It was a moment of great anticipation. The wedding became the setting for the family’s celebration, but not just because Donald had found a wife. The marriage of Fred’s and Donald’s grand expansionist vision was about to be achieved.

In the weeks after the wedding, Donald and his lawyers finally concluded lease negotiations for the Commodore with the city and state, building into the fine print bonuses for Donald never discussed when the Board of Estimate and UDC passed their resolutions approving the project months earlier. The principal public negotiator opposite the skillful Jerry Schrager was Charles Goldstein, who had become a major force at UDC. Mark Levine, an assistant corporation counsel, was the city’s main participant, with Friedman in the background.

The major issue to be resolved was the definition of profits, which would determine Donald’s fluctuating payments to the city over time. The way that profit was calculated in the lease was so explicitly written to fatten Trump’s pockets that even Bailkin would subsequently admit it was a giveaway. Trump’s profit, a percentage of which he was to share with the city, was defined as the difference between his gross income and his expenses. But income, in this document, was described as only the “aggregate amount of monies actually received [author’s italics],” while his expenses were all the costs he “incurred,” whether he paid them during that year or not.

If, for example, a corporation leased the hotel’s ballroom and several suites for a weeklong conference and made a down payment, but still owed thousands at the end of the year, the receivable wasn’t counted as income. But all the hotel’s expenses associated with the conference, paid or unpaid, were deductible from the income, a formula that lowered the profit unrealistically, and, hence, the percentage rent payment to the city. While this would at least theoretically even out over several consecutive years, the flexibility of this peculiar bookkeeping gimmick allowed Trump accountants wide latitude in computing payments due in lieu of taxes—latitude that would according to a city audit and lawsuit lead to shortchanging it by millions. Anyone negotiating a lease for the city would have wanted to maximize the income Trump had to report and minimize the expenses; this formula did the opposite.

In addition, the lease permitted Donald to partially deduct as an expense the costs of physical improvements and much of the tax depreciation he claimed on aging fixtures, furnishings, and other capital items. During Bailkin’s early negotiations with Trump over the profit-sharing plan, Donald had raised these capital expense issues and Trump’s insistence on winning these concessions had persuaded Bailkin that he shouldn’t give in on them. The initial package presented to Beame in the form of Bailkin and Eisenpreiss memos specifically stated that these items were “excluded” as expenses. The UDC board submission contained a similar prohibition. Somehow, though, the language that Bailkin had drafted barring this write-off was mysteriously deleted from the actual resolution Friedman steered through the Board of Estimate. The absence of Bailkin’s exclusion left the issue to the lease writers to determine, enabling Donald to cash in on this loophole once Bailkin was gone.*

The unusual concessions Trump won were in part made possible by a leadership vacuum at UDC. Ravitch had left at the end of March 1977, and UDC’s president resigned a few months afterward, leaving the corporation without a chief executive officer. Governor Carey didn’t name a new president for eight months, installing in the meantime an acting president, Robert Dormer, who was one of a few insiders angling for the full appointment. A conflict-inviting vacuum was clearly forming at·the top of what was becoming a powerful development entity, and the UDC bureaucrats competing for its presidency sensed, unsurprisingly, that the key to achieving it was through the political emissaries who had the ear of the governor—Trump, Sunshine, and, increasingly, Charles Goldstein.

Sunshine, who was now in full gear putting the financing together for the governor’s 1978 reelection campaign, had also come back to UDC as an advocate of the Commodore deal. Two months before Ravitch departed, Sunshine and he discussed her possible return to active lobbying at the agency, and Ravitch, who was preparing to announce his own candidacy for mayor, consented. A few weeks before he finally left, Sunshine received a written dispensation from the corporation’s president. She had reassured everyone that since the UDC board had already approved the project, her work on it there would be harmless technical housekeeping. It was, in fact, an absurd premise, because a pioneering project of this complexity required virtually daily discretionary decisions at the agency, and she was now free to influence each and every one of them.

Sunshine immediately attached herself to David Stadtmauer’s successor as city development chief, the young and dashing Richard Kahan, as did her newfound friend and ally, Charles Goldstein. Goldstein was the sort of man who’d never laughed at a joke about himself. When he was fresh out of law school and clerking for federal judge Irving Kaufman, the judge came into his office one day, greeted him as “Charlie,” and asked him to join him for a meeting. A stern Goldstein rose, inhaled deeply, and in front of the assembled staff announced: “Please, Your Honor, it’s Charles.” Remote, brilliant, and ruthless, he was also beginning to branch out politically, and would eventually become the personal attorney to both the governor and Carey’s top aide. Goldstein clearly liked what he saw in Kahan’s darting eyes; they understood each other’s hunger.

Goldstein and Sunshine chose the thirty-one-year-old Kahan—who was dutifully processing the Commodore deal—as their candidate for the UDC presidency. It was Kahan, for example, who approved the Trump lease, writing a letter to Trump in September 1977 officially agreeing to the terms. The letter, which Donald used with financial institutions to verify the state’s commitment to the deal, was written within days of Beame’s loss in the Democratic primary. Kahan’s rushed commitment was the opening salvo in a campaign to finally get the project nailed down before the new mayor, a maverick congressman named Ed Koch, could take office in January 1978. While Kahan strongly believed that the Commodore deal had intrinsic merit, he also knew his facilitation of it would earn him Sunshine’s and Goldstein’s decisive support for the UDC presidency.

Of course Kahan’s partner on the city side in this push for a December 1977 closing was Stanley Friedman, and their next three months of panicked collaboration would constitute a tribute to the ability of government officials to perform at their self-serving best, delivering in record time on the one contract that would, in the end, make both of their careers. A suddenly anxious Trump—convinced he had to erect a wall of binding legal commitments around the Commodore abatement that Koch could not dismantle—was determined to get the city and state to close the deal even though his construction and permanent loans were still not in place.

Ever since his first meetings with Ned Eichler about the project in mid-1974, Trump had been touting the supposed $70 million permanent loan commitment of Equitable. But in truth all Equitable was willing to invest was what it had secretly committed two years earlier: $25 million. Even after Bowery signed on for a $10 million portion of the permanent loan, Donald still only had half a bank deal. The Bowery was ready to serve as the lead participant, promising to try to raise the other $35 million, but it was “under no obligation,” according to the letter agreement, to bring in the rest of the financing. Until the rest of the permanent loan was in place, Donald could not obtain any of his $70 million construction loan. (Upon completion, the construction lender is repaid by the permanent mortgage.)

In addition to being forced to seek a city and state closing without fixed financing, Trump was also trying to rush approval of a last-minute addition to the planned new hotel, a glass-enclosed Garden Room restaurant that would hang over the sidewalk in front of it. It was an unprecedented attraction, never before permitted under the intricate system of laws designed to protect city pavements from commercial intrusions.

Trump would have to clear the overall project, and the Garden Room extension, through nine bureaucracies in the space of weeks, including a community board; the City Planning Commission; the fire, transportation, and buildings departments; the Bureau of Gas & Electric; UDC; the Board of Estimate; and, most difficult, an intransigent fiefdom peculiar even in New York politics known as the Bureau of Franchises.

With these herculean tasks before him, Trump’s agent, Friedman, became a driven man. The inducement was the job Roy Cohn had already promised him. Friedman was even to get Roy’s fifth-floor office in Cohn’s town house, complete with a cathedral ceiling, bar, outdoor patio, a greenhouse where Friedman’s secretary would work, and an adjoining apartment with kitchen, living room, fireplace, and loft bedroom. Friedman was guaranteed a six-figure salary for the first time in his life and, unless he stumbled, the rest of it.

And one further goal—the ultimate goal—was also coming into sight. Pat Cunningham was now in the most serious trouble of his life, with federal authorities about to close in. The word on the street was that he would be forced to step down and that he was headed for a cell. Friedman didn’t know how soon all of this would happen, but he knew he had positioned himself to claim the leadership. With Roy’s connections, cash, and clout, he’d have the perfect ally.

Friedman understood all too clearly that the Commodore was an assignment straight from his benefactor. Cohn was, in fact, already handling an assortment of Commodore legal matters, especially the unpleasant little business of forcing out the dozen or so commercial tenants on the first few floors. For Friedman, the Commodore rush was a Cohn test of his ability to push the buttons of a government where he had spent twelve years as an attorney in the city council and a top mayoral aide.

Given the time constraints, the only option left to Trump was an escrow closing. Hadley Gold, the chief assistant in the city’s corporation counsel, had spent a lifetime processing major city real estate deals and he had never heard of the city doing an escrow closing. Almost by definition, it made no sense for a municipality or a state agency to allow one. Why would two governments sign binding contracts for a deal that wasn’t ready to close and put those documents in escrow? Why would these governments sign a lease, a project agreement, a three-party agreement, and a purchase agreement that committed them irrevocably, while the private parties to the deal were not required to commit any money and could step aside at will?

Despite the apparent boondoggle air of the escrow plan, Friedman stormed ahead with it, confident of his ability to cajole city bureaucracies. He was assisted in his drive by a sullen Abe Beame, who during the final three months of his public life, let his administration become a free-for-all for insiders, unchecked by concerns about bad press or history. It was in this atmosphere that Friedman rewarded himself with a lifetime appointment as the $25,000-a-year chairman of the city’s Water Board, a part-time post with a full-time limousine and driver. With Friedman’s old nemesis, John Zuccotti, long gone, he was in effect the government of the City of New York for a few months—as frightening a thought as that was.

So Friedman put together all of the Commodore parties—Trump, the various city bureaucrats, UDC, and the Palmieri group—for what one participant called “a marathon session that went on for days.” He barked at recalcitrant, or just time-consumingly careful, city lawyers, telling them to “move it.” He personally signed each and every document as the designee of the by then semiretired Beame, including the mayor’s formal letter giving notice of his approval of the lease to UDC.

All Donald produced was a queasy commitment from Equitable and Bowery that said on the cover page that they were “willing to participate in a loan,” not that they were actually making one. Even this qualified commitment was legally defective, since the financial institutions conditioned it upon receipt of a letter from the corporation counsel that sweepingly overstated the generous abatement granted Trump. The final escrow agreement signed by Friedman, Kahan, Trump, Hadley Gold, and the agent in whose custody all the escrow documents were placed, Charles Goldstein, explicitly rejected the legal condition in the bank letter.

The Palmieri participants deeded over the property to UDC, which in turn leased it to Trump’s entity, even though Donald didn’t have the $10 million to pay for it. Of course, without UDC’s control of the hotel, none of the other agreements could be executed. Like every other piece of this implausible puzzle, the transfer of title would be negated if the $10 million wasn’t paid by September 1, 1978. That was the date written into all the agreements, the deadline for a final closing.

The Palmieri firm effectively declared itself willing to tie up the title to its hotel for eight further months, at the same sales price agreed to three and a half years earlier. Palmieri allowed this, even though the value of Penn Central’s other Manhattan hotels was shooting through the ceiling in a suddenly upswing market (a package of three went for $10 million more than the agreed-upon price because Palmieri agreed to entertain belated bids). The company certainly had the right to take new bids on Commodore as well, since Trump’s option had already expired and been extended several times.

On December 20 and into the morning hours of December 21, with just a week to go in the Beame administration, the city, state, and Trump lawyers and aides met all day and all night at the offices of Dreyer & Traub. The smooth, always dapper Kahan moved from starched shirt to starched shirt and dark suit to dark suit. Sunshine, who had begun championing him for UDC president a month earlier, never left the discussions, sitting on the floor, giggling over the banter. She and Kahan had become so friendly that they had spent weekends together—accompanied by other friends—at a friend’s country home. Friedman didn’t stay at the closing but Sunshine and the city lawyers had his phone numbers, and he was on call all night. Trump himself had been dragged by Ivana to a concert at Lincoln Center, and when a snag developed in the early evening, Sunshine called his driver and asked that Donald be pulled out to the phone to resolve the problem. Goldstein checked in periodically, too, but at this point the detail work involved didn’t require his personal attention. At last the contract that would launch several careers was firmly in place.

With the escrow deal approved, Friedman and Kahan still had a few days to tie together the loose ends of the complicated consent needed for the Garden Room restaurant. This cantilevered bar and lounge would be described a month later by New York Times architectural critic Paul Goldberger as “the most controversial element” and “most exciting aspect” of the Hyatt plan. “The room looks as though it will be one of the city’s most appealing public gathering places,” Goldberger wrote, “a sidewalk cafe in the air, offering views up and down 42nd Street.”

Friedman delivered the final authorization and signed a twenty-five-year consent for the restaurant on December 29, literally the last business day of the Beame years. He not only produced a consent in three months that, for the ordinary sidewalk café, would require half a year or more, but structured the deal so that Trump paid only a fraction of the regular franchise fees due the city for commercial use of public space. What Kahan’s help, the consent was rewritten to make UDC its recipient, and any governmental user of a street or sidewalk routinely paid discounted fees to the city. Trump was probably charged less per year for the first ten years of operation—$24,000—than the restaurant was grossing a day. More important, Friedman switched the approval from a franchise agreement, which could not run any longer than ten years and would cost Trump much more, to a consent, which could last a quarter of a century.

Armed with the escrow documents and the Garden Room permit, Trump did finally put his financing together and close the deal on May 20, 1978, shortly after Ed Koch took office. For one last time Kahan, Sunshine, Donald, and the gang of thirty or so lawyers and title company representatives assembled. This second closing dragged on for two or three days, with Donald periodically making his rounds like a glad-handing politician at a fund-raiser. He learned everyone’s name and said how “pleased” he was that each of them was there. He told a key city lawyer that he was doing such a good job that he wanted him “on the city team when I close on the 60th Street yards,” perhaps hearkening back to the Beame days, when he had the power to name the city negotiator who would deal with him, as he had Bailkin.

This time, appropriately enough, Fred made an appearance as well. He had to come—his signature was needed on a crucial document. Fred must have wondered what would have happened if he, rather than Donald, had been the up-front Trump on this project from the beginning. The newspapers would have been filled with stories about the old-time ties with Bunny and Beame, and even the sixties’ SIC scandal. The deal might never have survived the uproar. Only Donald could have taken on the Commodore without that stigma; his charisma was the distraction that displaced the otherwise inevitable old-boy network controversy.

But in the end Fred was once again quietly at center stage. In 1954, when he had been called before the Senate Banking Committee and questioned about abuses in his FHA projects, Fred had made much of the fact that he had personally guaranteed the Beach Haven mortgage, citing it as a measure of his own commitment to the project. He testified that he had never before guaranteed anything else he had borrowed. As it happened, however, without the guarantee Fred wound up giving his son, Donald would have had no Commodore mortgage. Fred came to the closing to sign the guaranty.

It was Fred and the Hyatt chain who jointly guaranteed the $70 million construction loan from Manufacturers Hanover, each assuming a 50 percent share of the obligation and each committing itself to complete the project should Donald be unable to finish it. Hyatt and Donald agreed that the chain would become a 50 percent partner in the venture with Donald’s company. The price of Hyatt’s guarantee was its promotion from operator to partner.

No document in the long paper trail attached to the Commodore deal better demonstrated the lack of bank confidence in Donald or the project, and none made clearer the limits of his promoter role. As indispensable as Donald was to the initial concept and political marketing of the hotel, he could not have made it happen without Fred’s—and Hyatt’s—signatures. Hyatt chairman Jay Pritzker said later that Donald simply “couldn’t get the financing” and “we were able to help,” with both Equitable and Manufacturers Hanover. When it came to the financial bottom line of the deal, Donald was barely a factor.

Concealed beneath all of Donald’s public pizzazz, the fact was that Fred was his silent partner in the Commodore project, just as he had been hidden in the language of the option agreement for the West Side yards. In addition to Fred’s guaranty, his Trump Village Construction Corporation loaned Donald nearly a million dollars during construction to repay draws on a Chase credit line for Donald that Fred had helped arrange. And it was Fred’s two-decade-old relationship with a top Equitable officer, Ben Holloway, that had helped entice them to do the project.

Contrary to all the hype of his sales pitch with Eichler and Bailkin, as well as the asset description in his prenuptial agreement, Donald was, on his own, hardly creditworthy enough to get financing for any major project in the late seventies, much less one of these dimensions. His 1977 agreement with Ivana, for example, listed “his interests” as the 34th and 60th Streets yards—which consisted of a purely speculative option at the time—and stakes in six Fred projects. But even these vague holdings were more wish list than reality. In a sworn statement three years later, Donald claimed ownership of a 25 percent piece of only one of Fred’s thirty or so operating entities.

His only salaried income at the time of the Commodore closing—less than $100,000 a year—was as an officer of his father’s company, Trump Management. He paid $10,832 in taxes on $24,594 in income in 1976 and $42,386 in taxes on $118,530 in income in 1977. In addition to his salary, he’d begun collecting payments under a trust set up by his father in 1976, but he received only $19,000 in 1977 and $47,200 in 1978, the year the Commodore deal closed. Another trust established by his father in 1949 paid him $11,000 a year, and his grandmother’s trust paid him $1,699 in 1977. In addition to the trusts, Fred regularly gave each of his children $6,000 a year at Christmas as a kind of family bonus.

He did draw a management fee out of one New Jersey housing project his father turned over to him, and he did occasionally collect brokerage commissions, the largest being the $262,500 staggered over three years for the sale of part of his father’s interest in Starrett City. Since that sale was concluded in late 1977, it was hardly a significant number on his balance sheet when the Commodore closed.

Though Donald owned no publicly traded stock, he was already claiming that he’d made a fortune in gold and that he’d been involved in several successful California real estate deals; but his tax returns suggested otherwise—as did his lifestyle and the tiny office Palmieri was letting him use. Penn Central was still picking up most of his 60th Street expenses, and when Hyatt joined the Commodore project as a partner, it advanced him a million in start-up funds. At the time of the 1978 closing, these two subsidies were keeping Donald’s struggling operation afloat.

Despite all that each had done to make the Hyatt happen, neither Fred, Bailkin, Kahan, Friedman, Cohn, Zuccotti, Beame, Stadtmauer, Sunshine, Ravitch, Carey, nor Goldstein drew a mention in Trump’s autobiographical account of the deal that invented him. In The Art of the Deal, it was as if Donald walked out onstage alone. There were, however, other rewards for these key players.

•   One month after the May Commodore closing, Richard Kahan, who’d held exactly three jobs in his life, became UDC president, the most powerful public development position in the state.

•   Charles Goldstein cohosted a party at the Plaza celebrating Kahan’s appointment, unfazed by the awkward fact that he had helped engineer the appointment of a man who would then authorize millions in public legal fees for him over the next few years. Goldstein would develop a host of private client relationships as a result of his work for UDC on development deals patterned after the Commodore. When he left, he would collect fees on one future Trump transaction, and regularly represent Trump’s financing friends from Equitable.

•   Stanley Friedman would not only join Roy Cohn’s firm but would become Cohn’s first Democratic county leader, a dream come true for both. Cunningham resigned abruptly in early 1978, and Friedman took control of the Bronx party days before the Commodore deal closed in May. One of Friedman’s best paying clients over the years was Donald Trump, who also became the largest contributor to his Bronx party committee.

•   Hugh Carey received $65,000 in contributions for his successful reelection campaign from the Trumps. Starrett and its principals, whose $40 million construction contract to build the Hyatt was its largest domestic award in 1978, also donated $27,000 to Carey. Trump retained the finance chairman of Carey’s reelection effort, Arthur Emil, as a condemnation attorney for the Hyatt. Carey had fiercely opposed Beame’s reelection attempt in 1977, and following that lead, Trump had not made a single contribution to the campaign of the doomed old man. Donald had actually claimed that it would have been a conflict to give to Beame because of the Commodore deal, an assertion he made with a straight face, even as he prepared to dump donations on his gubernatorial benefactor. After Beame’s defeat, the Trumps did give $5,000 to help pay off Beame’s campaign debt.

•   Louise Sunshine became Donald’s first partner. Five months after the new Hyatt opened in 1980, Donald invited her to purchase a 5 percent interest in the corporation that would, a couple of years later, build and own Trump Plaza, a co-op project on Third Avenue in Manhattan. His inclusion of Sunshine was some measure of the value he placed on her role in the convention center and the Commodore.

•   Shortly after John Zuccotti went into private practice in June 1977, Donald tried to retain him on the West Side yards, where Zuccotti’s community ties might have been particularly helpful. Zuccotti told Trump he thought it would create the appearance of a conflict and declined. Though Zuccotti soon became the top zoning attorney in the city, Trump never tried to hire him again.

•   Stadtmauer Bailkin earned modest fees processing other projects under the incentive program they created. At the entrance of their East Side law firm they hung a wall-length poster of the Hyatt that described their role simply as “legal counsel” and “project manager,” leaving to the imagination whether they’d worked on the public or private side of the deal.

•   Mark Levine, the nuts-and-bolts man as corporation counsel who succeeded Bailkin as a key city bureaucrat on the deal, left in 1977 to join Goldstein’s firm first and shortly thereafter Sandy Lindenbaum’s. He filed Donald Trump’s next application for a city tax abatement—a 1981 request for an estimated $50 million write-off for Trump Tower.

•   Richard Ravitch, who dropped out of the mayoral race, sold his family-owned business, HRH, two weeks after leaving UDC in early 1977. He had been talking with the purchaser, Trump’s partners at Starrett, since 1975 about the possible sale. Trump had begun negotiating a contract with HRH to build the Hyatt at the very time that Ravitch was closing his deal to sell the company to Starrett. Trump’s selection of HRH as his Commodore builder may well have enhanced the value of the company to Starrett. Ravitch, though he cut his financial ties to HRH at the time of the sale, would actually move into Starrett offices, work with the company on a number of projects, and retain his partnership interests in several HRH ventures. Starrett eventually became the contractor on five major projects connected to Ravitch’s reign at UDC. Ravitch says he made no money on any of these deals, and almost six months after he left the agency he requested an opinion from the state’s ethics board on the propriety of this complex intertwine, In less than twenty-four hours, the board’s secretary wrote a letter identifying no conflict.

•   Victor Palmieri was the only key Commodore player to be introduced for a bow in The Art of the Deal. No mention was made of Ned Eichler or John Koskinen, the two Palmieri executives who’d actually negotiated and executed the various Commodore options, and the agreements on the two West Side yards. In fact, in his book, Donald attributed conversations that had taken place with them to the much better known Palmieri and asserted that he’d “built a close relationship with Victor from the start,” when he’d met Palmieri only a handful of times.

Manhattan United States Attorney John Martin initiated a brief inquiry of the Commodore sale to Trump. He personally interrogated high Penn Central officials, focusing on the company’s willingness to stick with the hotel’s $10 million purchase price. In the same period in early 1978, when Palmieri went ahead with the sale to Trump, the company had been involved in a separate deal that ostensibly included Trump. In that unrelated transaction, Palmieri collected a $2.5 million fee for arranging the purchase of a troubled home-building company, Levitt. The buyer was the ever-present Starrett and Donald, who also collected a $152,000 brokerage commission on the deal, claimed he’d gotten the parties together. This sidebar transaction cast a collusive cloud over the Commodore, but Palmieri brass insisted that Trump really had nothing to do with the Levitt acquisition. Martin closed the case as quietly as he’d opened it, but combined with the Brooklyn investigation of the West Side yards, Donald’s dealings with Palmieri had twice become the subject of federal inquiries.

With all the career successes the Commodore deal generated, none received a bigger boost than Donald’s. By the time the project, the first of his life, was in construction, he had ridden it to the top of his profession. Magically, he was dubbed the new Zeckendorf, the best-known developer of his era, though he was only now putting his first shovel to the ground.

In the mythmaking years that followed, Donald freely credited himself for the turnaround impact the Hyatt project supposedly had on the Grand Central area. No doubt the hotel’s resurrection did help anchor a slipping section of prime New York real estate. But, while Donald depicted his project as both a jolt to a dead city economy and the savior of a slumping community, the fact was that it took so long for the Commodore job to get off the drawing boards that by the time it did, the city and the neighborhood had already begun to come back on their own. When Donald announced the renovation way back in 1975, the area near the Commodore was in such disarray that the owners of the landmark seventy-seven-story Chrysler Building across the street had defaulted on their mortgage. But when Donald was finally ready to start construction in 1978, Mass Mutual had already come to the Chrysler Building’s rescue, buying out $34 million in mortgages and committing $23 million to restoration. What had begun as a vanguard project became just one of several simultaneous attempts to revive the 42nd Street strip.

The groundbreaking itself took place on a glorious New York day, June 28, 1978. Hugh Carey had appointed Richard Kahan UDC president the day before. Carey himself was in the middle of his triumphant reelection campaign, and that morning he would turn the Commodore event into a campaign stop: 1,400 new hotel rooms to celebrate, a three-story hotel with 19,000 square feet of ballrooms and thirty-seven meeting rooms, a solar-cooled glass exterior that would reflect the adjacent Grand Central Terminal and the Chrysler and Bowery buildings. It made for much better press than the fiscal crisis announcements of closed hospitals.

His blond hair dancing in the sun, Donald greeted Carey at the site. The hotel workers were picketing the celebration, and Carey introduced Donald to their new chief, Vito Pitta, a union leader who would be dogged for years by law enforcement and newspaper allegations of his mob associations.* A few months earlier Pitta had appeared from nowhere to take the leadership from Jay Rubin, the venerable president who had been trying unsuccessfully for a number of years to establish a relationship with Trump. Rubin had testified twice at the Board of Estimate in favor of the Commodore tax abatement; his insistent enforcement of costly provisions of the city-wide contract at the Commodore had helped force Penn Central to close it, adding to the momentum for Trump’s project. Rubin had repeatedly attempted to get a commitment from Donald that the new Hyatt would sign the union contract, but all Trump had said was “We’ll see what happens.” Donald dispersed the protest that morning, though, with a simple promise to Pitta: “This will be a union shop.”

In addition to the demonstration, the groundbreaking, which occurred at the hotel’s elevated side entrance, was briefly disrupted. Demolition had already started inside, and a trash fire suddenly exploded, summoning a horde of fire trucks.

Carey would inflate every impressive number in his prepared text. He called the Commodore a $140 million project, adding the construction and permanent financing sums together, when one actually replaced the other. He said the hotel would generate 2,000 permanent jobs, when Trump’s accompanying release boasted only of 1,300. “New York in the past had failed to give business the kind of incentive and support it needed to flourish,” he said, “but that day is past.”

In the years that followed, Donald would be unable to face the cameras without a peculiar, furtive twist to his public smile. It was the look of a man who could not conceal his contempt. When he looked into cameras it was as if he was eyeing himself in a mirror, admiring the triumph he’d become and, at the same time, laughing haughtily at the world. But this day, cynicism had not yet overtaken him. He had seen the amoral hunger of more men during this breakthrough deal than most people saw in a lifetime. In this triumphant moment, though, the tortuous process was a forgotten memory. He let himself be the boy he was, and shone with uncompromised joy.

 

*The lease’s tolerance of deductions for capital expenses was so costly to the city that when Bailkin and Donald appeared years later at a joint forum discussing the deal, Trump corrected Bailkin’s assumption that the percentage rent due under the agreement must by then have been paying huge dividends for the city. Trump informed Bailkin for the first time that the depreciation deduction had been added to the lease and announced that because of it he was still making limited payments to the city.

*Pitta was identified as an associate of the Colombo crime family and indicted in a major racketeering case in 1984. The charges against him, however, were dismissed a couple of years later.