As the Trump Village towers rose higher and higher, the flags outside Steeplechase Park, a few blocks away on the famed Coney Island boardwalk, were lowered to half-mast. Frank Tilyou, the president of the company and the last surviving son of the founders, had just died. The family soon announced that the Steeplechase—the last of the three big amusement parks that gave Coney Island its reputation for fun, sun, and surf—would not reopen for the coming summer.
The closing inspired a wave of nostalgia. A piece of old New York had died. City newspapers ran sentimental retrospectives with photos showing throngs crowding the beach and boardwalk in earlier decades, when three amusement parks—Dreamland, Luna, and Steeplechase—drew a million visitors a day. Letters and stories waxed on about loves lost and won, adrenaline thrills, and feeling at one with the city’s great mass of humanity.
The Tilyou family began entertaining offers to sell. By early 1965, it was clear they had a problem. The land was zoned for use as an amusement park, and the brokers and builders thought the site made business sense only if they could win a zoning change from the City Planning Commission to allow high-rise apartments. None of the potential buyers so far had thought that was a risk worth taking. James Onorato, who had managed the park for the Tilyou family for three decades, told the family why: “We know from the grapevine that the commission is set on no zone change.”
With the city growing more crowded, public officials began to see value in preserving land for public use. Fred Trump, however, saw only a beautiful blank canvas. Twelve acres with an ocean view. Miami by the subway.
Fred offered the Tilyous $2.2 million, the equivalent today of more than $22 million, in the spring of 1965. He agreed to let the Tilyou family sell off the remaining rides, suggesting he had no interest running an amusement park. Marie Tilyou, the founder’s daughter, quickly accepted.
On the morning of July 1, 1965, the parties and their lawyers all gathered for the formal closing in the Brooklyn Heights office of Wingate & Cullen, a century-old Brooklyn law firm that represented the Tilyou family. Seventeen people attended, including James Onorato and Marie Tilyou, two real estate brokers, and seven lawyers. Fred brought along his two lawyers—Matthew Tosti and Abe Lindenbaum—and a surprise guest: his middle son, Donald, who had just turned nineteen.
While Donald got to play like a dealmaker at the table, Freddy was charged with the grittier tasks to come. Over the months, as Onorato found problems with the fire sprinkler system and the natural gas lines, it was Freddy he briefed.
On the day of the closing, the Coney Island Chamber of Commerce made clear it would oppose rezoning the site for apartments. Freddy became the family’s face for his father’s unpopular plan. It was him, then twenty-eight years old, whom Fred directed to explain to reporters that the family would make every effort to reopen the site as an amusement park. “If we can make it pay as an amusement proposition, that’s what it will be,” Freddy said. “If not, it’s going to have to go for senior-citizens housing.”
If he was hoping for a boost from his old friend Abe Beame, it would not be coming. When Wagner retired as mayor after three terms, Beame ran to replace him—only to lose to John V. Lindsay, a moderate Republican congressman with whom Fred had no connections. Lindsay’s incoming parks commissioner’s first public comments that December included voicing his opposition to any effort by Fred Trump to build high-rise apartments at Steeplechase.
Fred announced that he had tried to convince three amusement park operators to take over Steeplechase, including Walt Disney. “They turned it down,” Fred said, “all declaring that Coney Island had had its day.” He remained committed to building an apartment tower of twenty to thirty stories, which he insisted, through Freddy, was necessary for him to save the neighborhood.
“The fact is that the whole of Coney Island needs redoing,” Freddy told a reporter. “You and I wouldn’t take our kids there. People are afraid to walk on Surf Ave. at night.”
As his Steeplechase plans hit a wall, Fred began to slow down in the wake of a more personal experience.
On the evening of Monday, November 8, 1965, Fred missed a flight for his regular Tuesday survey of Swifton Village in Ohio. American Airlines Flight 383 took off at 5:38 p.m. from LaGuardia Airport without him. Passing through thick, low clouds from a thunderstorm during its descent into Greater Cincinnati Airport, the Boeing 727 crashed into a hillside about two miles short of the runway. The jet exploded shortly after impact, killing fifty-eight of the sixty-two people on board.
Fred told some family members that narrowly missing that ill-fated flight left him hesitant to fly. Already overtaxed by his far-flung empire, he would travel less frequently in the future to his out-of-state properties. His buildings in Maryland, Ohio, and Virginia would begin a long, slow slide into disrepair.
Robert Strauss, a field auditor for the state agency that financed Trump Village, visited the Trump Village construction site seven times. On each visit he made an entry in his notebook that he had witnessed heavy machinery bearing the name Boro Equipment Corporation moving dirt across the street, where Fred Trump was building a shopping center that he would own. He also spotted work crews, and the HRH construction bosses Fred had hired, working at the shopping center site. The evidence was clear: Fred Trump was using funds from a state program for affordable housing to build his shopping center.
“It should not be assumed that from the foregoing that these were the only occasions on which the events observed had taken place,” Strauss wrote in his report.
The more Strauss dug, the worse it looked. He and his colleagues noticed that the rental rates Fred was paying Boro Equipment to rent bulldozers and backhoes were two and three times as much as it would have cost him to buy the equipment outright. And in an office full of people who spent their days around construction sites, no one had ever heard of Boro Equipment Corporation. They checked the form Fred Trump had filed with the state that required him to disclose all companies in which he had an interest. No mention of Boro Equipment.
Their frustration eventually found its way to the State Commission of Investigation, which had been created in part to help state agencies investigate corruption. A young investigator there, Joseph Fisch, uncovered a surprising truth: Boro Equipment was owned by none other than Fred Trump. Everything made sense to Fisch and the auditors now. The rental rates were so high because they were only a means for Fred Trump to line his pockets with more than the 6 percent profit to which he had committed. His tenants would pay the price.
As each of Trump Village’s four sections were finished, state auditors and investigators scoured Fred’s records, tolling the gap between his high estimated costs, the figures that provided the basis for his state-backed mortgage, and the low amounts that he actually spent. They saw what appeared to be evidence of fraud extending beyond Boro Equipment.
They found a second shell company that Fred created to evade the profit limits. From the state-supplied mortgage money, he paid Trump Village Operators, Inc., ostensibly a real estate brokerage, fifty dollars for each cooperative apartment sold. That entity then paid an outside broker twenty dollars to do the actual work. Fred pocketed thirty extra dollars on every apartment sold—for doing nothing.
Fred was summoned to a public hearing exploring the “windfall” builder’s fee he generated through deception. On January 26, 1966, he walked into a state office building across from City Hall, in lower Manhattan, and took an elevator to the twenty-fifth-floor hearing room of the State Commission of Investigation.
Before Fred was sworn in, the four lawyers on the commission and their investigative staff questioned Leo Silverman, head of the audit division in the state housing agency. Silverman laid out the findings regarding the Boro Equipment rentals. One commissioner, Jacob B. Grumet, who as a federal and state prosecutor had brought mobsters and murderers to justice, called Fred’s use of Boro Equipment “grasping and greedy.”
During Fred’s testimony, he bristled at all the attention to Boro Equipment. “This is peanuts, what you are talking about,” Fred said. “Boro Equipment is peanuts compared to sixty million dollars.”
Fred insisted that the rates he charged himself were what he would have had to pay an outside company for the same job. In Fred Trump’s mind, if he did that work himself, he was entitled to whatever profit he decided that an outside company would have received. It was a rationale that would make sense in the purely private realm, where the marketplace would determine whether what he was selling was worth more than what he spent to make it. Fred, however, had chosen to operate with government support, a choice that came with benefits and limitations. And yet, he felt entitled to the best of both options. In his mind, even with the amount he had padded invoices to himself, he was still getting the work done cheaper than if he had paid an outside company to do it. He wanted the commissioners to take his word for what someone else would charge, and to thank him.
The state disagreed and demanded that he reduce the Boro Equipment bills by 25 percent to bring it a little more in line with typical charges. Fred had already agreed to do so. As the questions continued, Fred reverted to his defense from the FHA hearings a decade before: shock that anyone could be unhappy with a project that “has the finest reputation.”
“Commissioner, I would like to say we knew nothing about a hearing this morning,” Fred said. “We walked in here cold this afternoon, thought we had the finest job in the City of New York, the finest Mitchell-Lama, and never knew there was one blemish, or anyone who would say an unkind word about Trump Village.”
Commissioner Grumet reminded Fred that he could only be unaware of the panel’s findings through selective amnesia: He had sat for a private interview with the commission eight months earlier. Fred snapped back that he could not be expected to remember everything: “I have got forty-three corporations that I am a stockholder in, and these things escape my memory sometimes.”
The commissioners drew an unflattering contrast between Fred’s practices and those of Abraham Kazan. Kazan took only a 1 percent development fee—about $350,000—for United Housing Foundation to build the Amalgamated Warbasse Houses. Fred Trump collected ten times that much for his co-op buildings. Kazan told the commission that “ethically it would be wrong” for UHF to accept a higher fee because doing so would drive up costs to residents. With the savings, UHF spent $6 million to build a dedicated power-generation station. As a result, compared to Trump Village owners, Warbasse buyers paid 13 percent less in monthly carrying charges, and those lower charges included electricity and central air-conditioning. For their higher carrying charges, Trump Village residents paid for their electricity separately and were offered the opportunity to rent air conditioners from Fred Trump at an additional charge.
Auditors also discovered that Fred had spent more money building and appointing the rental apartments that would remain in his ownership than on the cooperatives he would sell. The rentals were larger and had finer appliances and features in the kitchens. Fred knew too well that over time it would be the rentals—just like at Shore Haven, Beach Haven, and his other large-scale projects—that would generate life-changing wealth for his family.
Silverman told the commissioners that Fred had collected a total of $4.8 million in fees and from that money paid $1 million to HRH for doing the actual work. He had inflated his cost estimates by $7.9 million, which artificially boosted his fee by $598,000. In addition, Fred had overestimated the cost of acquiring the land by $1.2 million. He used some of that money to buy the land for his private shopping center.
“In other words,” a commissioner asked, Trump was “able to acquire the shopping and commercial areas without putting up a nickel of his own money?”
“Yes, sir,” Silverman answered.
Fisch explained to the commissioners that Fred had clearly violated his contract with the state when he comingled money deposited by buyers as down payments with other money, then used that money to start construction before the state loan closed. Doing so allowed him to reduce his carrying costs and increase revenue by quickly finishing construction so he could sell off the co-ops and start collecting rents sooner. The state had agreed to allow Fred to start construction early, but only if he did so entirely with his own funds.
“And that agreement, of course, was violated by the use of these funds,” Fisch said.
During the investigation, Fisch had grown incensed by the bills to the project submitted by Bunny Lindenbaum. Fisch knew the city had done all the legal work to condemn the properties and paid a relocation company to help residents find new homes. Bunny’s bill claimed he and his associates—his own son, Samuel “Sandy” Lindenbaum, and Matthew Tosti—had performed that work and were due $520,000. Before the hearings began, Fisch obtained affidavits from the office of the city’s lawyers and the president of the relocation company saying Bunny and his associates had not been involved in any of that work.
Once he was finished with Fred during the morning session, Fisch called Bunny to testify after lunch.
Fisch grilled Bunny about his ninety-nine-page bill, which included a list of tenants he had supposedly relocated or evicted and properties he had condemned. Fisch repeatedly asked Bunny who had made the list, and Bunny repeatedly answered that it “was made,” a point that was never in doubt but did not address who had done the making. After a few more answers in the passive voice, Bunny said the list was made by the city, but insisted that his office had added the tenants’ names. Then he shifted to claiming his office had worked with the relocation company to make the list. Fisch read from the affidavit of the president of the relocation company, who said Bunny had done nothing.
As he was dismissed, Bunny grasped for a narrow distinction: “You keep saying that I was to receive $520,000,” he said to Fisch. “I, together with Mr. Tosti, were to receive that sum. It wasn’t just for my firm alone.”
That money would not come out of Fred’s pocket. It would be charged directly to and spread among the buyers of the cooperative apartments in the form of a larger mortgage and higher monthly fees. Fred took care of his closest lawyer and political fixer without spending his own money.
Fisch was incensed. He referred the facts of what Fred Trump and Bunny Lindenbaum did to the Brooklyn District Attorney’s Office. But with that office still controlled by the Brooklyn Democratic Party machine, nothing came of it. Fisch, who later became a prosecutor, a judge, and the state inspector general, always believed Fred’s and Bunny’s connections saved them.
“Today, prosecutors would fight a duel to get that type of stuff,” he said.
The commissioners expressed frustration that the law did not allow any clear way for the state or the apartment buyers to make Fred Trump return the money he had deceptively taken from the project. Even aside from the tens of millions of dollars that Trump Village would produce for the Trump family in the coming decades, the proceeds of Fred Trump’s deception would be worth nearly $20 million today.
Once again, news headlines focused attention on Fred Trump taking more profit out of a government-financed project than what he had agreed to accept. Once again, tenants accused Fred of fraudulently increasing their costs to line his own pocket.
In the hallway outside the hearing room, a television reporter politely asked Fred about the testimony earlier that he had used his influence over John Cashmore, the late Brooklyn borough president, to stall the project proposed by Kazan and United Housing Foundation and ultimately take half the site. It was a point he had heard made for years and seen written in a stack of newspaper articles. Fred fixed his blue eyes on the reporter and answered calmly in his nasally voice.
“Never heard of that. First time I ever heard of a thing like that.”
For the second summer that the Trumps owned Steeplechase, Fred wanted to generate revenue and draw attention. He had Freddy hire the operator of an animal show—including a family of otters, exhibits with baby minks and pigeons, and fifty thousand bees in an apiary—to fill the Pavilion of Fun. As he signed the contract, Freddy posed with a two-hundred-pound tiger breathing on his hand. By the end of June the animal show closed, having failed to draw a significant number of people.
As the summer wore on, it became clear that Fred had underestimated his problem. The City Planning Commission remained determined to “preserve as much of Coney Island as a recreation area as possible,” a spokesman said at the time. Another planning official referred to the space near the boardwalk and beach as an important “safety valve” for residents stuck in small, hot apartments during the summer.
Fred came up with what looked like a hastily conceived plan. He proposed developing not just the 12 acres he owned, but a full 120 acres of beachfront, mostly owned by the city. He would build a 7-acre “Pleasure Dome”—which in Lapidus’s sketch resembled a glass airplane hangar—that would include parking, retail, and amusements. There would be housing elsewhere, which the Trumps avoided saying would be on the land owned by the city. The Coney Island Chamber of Commerce saw through the dodge. “Mr. Trump is stuck with the present Steeplechase property, on which he cannot build housing because of the zoning,” a spokesman for the Chamber of Commerce said at the time. “Under the plan he would exchange it for the city land. He’s getting rid of a lemon.” The chamber also complained that the plan did not include enough facilities for people just wanting to use the beach, like parking, lockers, and picnic areas. “The beach,” the chamber declared, “would become a personal haven for people who lease apartments from Mr. Trump.”
In a final act of petulance, Fred announced in September 1966 that he would host a demolition party. He promised that six young beauty contestants, one of whom had recently been crowned Miss New York, would be on-site in swimming suits to hurl bricks through the glass façade at the Pavilion of Fun.
Freddy was tasked with overseeing the unpleasant task. He showed up one day in the office of park manager James Onorato and told him of the demolition party, asking how to get the electricity shut off. A formal invitation arrived in the mail. “You are cordially invited as the guest of Fred C. Trump to attend a V.I.P. Farewell Ceremony marking the demolition of Steeplechase Park…as TV and news cameras record the end of a nostalgic era in Coney Island history.” Onorato saw the event as crass and heartless.
Fred began demolition even before the party. Bulldozers arrived on September 15 and knocked down the pool office building, then went the bathhouses, the roller coaster, and the rest.
The day of the event, Fred smiled widely as he passed an axe up to young women in swimsuits standing atop a bulldozer. He encouraged guests to throw bricks at the glass front wall of the Pavilion of Fun. They seemed to aim for the smiling face of Tillie, the nineteenth-century caricature whose lips stretched literally ear to ear above and below Chiclet teeth. By the end of the day, Tillie’s cartoon chin had been shattered.
The city eventually announced that the area would become a city park, with amenities for beachgoers, and paid Fred $3.7 million to take the property off his hands. The amount was $1.4 million more than his purchase price—enough to at least cover property taxes, security, and demolition, and a profit that Fred might have called peanuts.
He wrote a letter that was published in the New York Daily News urging, again, that the city throw out the park plan and allow the construction of housing to produce tax revenue: “Coney Island is highly ghettoized, and to put a park at Steeplechase is a disservice to the public interest.”
As Fred’s efforts at Steeplechase failed and the Trump Village hearings came to a close, he turned sixty-one. His mother, Elizabeth, who had enabled the start of his building career with her money and signature, died that June at the age of eighty-five.
Fred would never again pursue a large-scale project. The historical and economic forces central to his success had shifted, and federal funding for middle-income housing had tightened considerably, in no small part thanks to his own actions. He would never again build under the New York program that made Trump Village viable. The vast swaths of undeveloped land near subway stops that made his biggest projects possible were nearly gone. For most of his career the intense need for housing had afforded Fred not just access to money through government programs but also something approaching hero status with each new project. Now, in every corner of the city, something would have to be demolished to make room for something new. There would be people who wanted a neighborhood to stay the same. Everything would feel like a fight. Against tightened zoning regulations. Against preservationists. Against his own reputation.
He would mostly spend his days tending to the empire he had assembled, watching as increasingly large profits accumulated in his bank accounts, enough money to change the fortunes of his family for generations to come. Within twenty-five years after the Trump Village hearings ended, after he had sold all his properties outside of New York and nine within the state, the rental buildings assembled by Fred Trump would collect more than $65 million a year in rents. They would become increasingly profitable. Thanks to low-interest, government-backed loans, those buildings carried almost no debt, typically one of the largest expenses of rental buildings. He had invested very little of his own money and owned a portfolio of apartment buildings that would be worth nearly $1 billion in his lifetime.
He would make clear to his lawyers that he wanted that empire to stay intact and within his family, in perpetuity. That would require someone to take over, and that person would not be his eldest son. Freddy would never fully break from his father to pursue his own dreams, nor would he ever fully embrace his father’s ways. He would slide deeper into alcoholic dysfunction and poor health, divorce Linda, and leave her to care for their two children. He would cast about for meaningful work, failing as the captain of a fishing boat in Florida and running his own employment agency, before returning to work for his father once again, this time as a low-level maintenance man.
Turning over the reins to one of his daughters never emerged as a possibility. Fred Trump never fully appreciated the abilities of his most independently accomplished child, his eldest daughter, Maryanne. She graduated with honors from Mount Holyoke College in 1958. She was pursuing a graduate degree in public law and government at Columbia University when she married David Desmond, a somewhat rotund and hard-drinking Air Force veteran from Westchester County. They had a son, David Jr., and Maryanne decided to stay home with the baby after completing her master’s degree. Desmond had graduated from a prep school and Columbia University and worked at a car dealership for a time, but his drinking continually cost him jobs. “My husband was a deadbeat, from day one, and a drunk,” she told a relative. They lived in a Fred Trump apartment building in Jamaica Estates. Fred and Mary did not approve of Desmond, and she has said they withheld the financial support that could have made her life easier and her career path less bumpy. “They never knew how bad it was,” she told the family member. “They knew it was bad. Or Mom did. Dad, you know, was clueless, just like the other men in the family.”
From her mother, she was given access to one of the great, apparently tax-free, sources of cash in the family: coins from laundry rooms at the apartment buildings. The dimes and quarters from more than fifteen thousand apartments produced hundreds of thousands of dollars a year. Several family members—Fred’s mother, Elizabeth; Fred’s nephew, John Walter; and Fred’s wife, Mary—collected coins from the laundry rooms. Maryanne has said she paid for food during those years with the laundry coins from her mother, delivered to her in Crisco cans. She broke up with Desmond, graduated from the Hofstra University School of Law, and eventually became a federal prosecutor and judge.
Her younger sister, Elizabeth, rarely displayed ambition. In the 1960s, she fell in love with a truck driver, only for her disapproving parents to chase the man away. Elizabeth took a job as a secretary at the bank where her father conducted most of his business. She would not marry for the next two decades.
Robert, the youngest of Fred Trump’s children, would outperform his brother in college, at least in athletics. He became captain of the Boston University soccer team and its MVP during his senior year. Still, two years younger than Donald, Robert never seemed to be on his father’s radar.
Fred Trump once said that no one other than Donald demonstrated an interest in the family business. It was not completely true; Fred Trump made it true.