Donald Trump — Real Estate Sleaze
Donald J. Trump is a very rich real estate developer in New York City. One of his buildings, Trump Towers, is over sixty stories of luxury apartments about which he once quipped: “The rents are so high that Americans can’t afford to live there.”
There is another side to Donald Trump’s real estate ventures. They are on welfare. He is an aggressive seeker of special tax benefits for his properties. New York City has given Trump’s businesses long tax abatements on his buildings for the rich which means that the poor and middle classes in New York have to shoulder a higher burden of local taxes to make up the difference.
Running a very profitable real estate business on public welfare does not bother Donald Trump in the least. His demands for more welfare from the City are vociferous and amount to tens of millions of dollars in property taxes that he doesn’t have to pay each year.
To get on the welfare rolls, Trump works hard. Here is how Jack Newfield and Paul DuBrul describe his diligence in their 1981 book, The Permanent Government: Who Really Runs New York?:
“Donald Trump, not yet 35, is the city’s most aggressive and politically connected developer. Trump and his family have donated or loaned money to almost every important elected official in the city and state, including giving Governor Carey a total of $102,000 in his last two elections –plus co-signing a $300,000 bank loan… He even donated $5000 to Mayor Koch during 1979 and 1980 — when there were no elections.”
In particular, the Mayor has been well disposed to Mr. Trump’s desires for licenses, zoning variances, municipal financing, tax reductions and abatements. Political and civic leader, Herman Badillo described Koch as converting Manhattan into a “fantasyland” while neglecting the “family-based, homeowner neighborhoods.” The other New York City -composed of minority slums, the growing homeless, the impoverished children and the illegal aliens working in sweatshops for pittances — is rarely included in the cool calculus of developers making welfare deals with City officials for staggering profits.
But, now a rift has emerged between Trump and Koch. The developer’s grasping demands that the City give massive subsidies to NBC so that this number one rated network can move to a proposed Television City, that Trump wants to build, finally encountered resistance at City Hall.
Trump, whose swelling ego is bordering on meglomania, sent a public letter to Koch on May 26, 1987, which opened with the words: “Your attitude on keeping NBC in New York City is unbelievable and, I predict, will lead to NBC leaving the City, as so many other major companies have, for New Jersey. He called Koch’s refusal to accept either of Trump’s demands — first a 30 year full tax exemption for his Television City project on Manhattan’s west side and later a 20 year exemption — as “ludicrous and disgraceful.” Koch said that the 30 and 20 year tax exemption would have cost the City respectively $1 billion and $700 million in constant dollars. Trump countered vaguely that some of the profits would be shared by the City.
Koch replied two days later and told Trump that he would go no further than the incentive package he already offered NBC for both “new construction and for its current site at Rockefeller Center.” “There is some limit,” he added, “to how far the City should go to retain any particular firm while being fair to all other City taxpayers.” He concluded with a public admonishment: “I urge you to refrain from further attempts to influence the process through intimidation.”
NBC is owned by General Electric — a company that made $6.5 billion in profits between 1981 and 1983 without paying a dollar in federal income taxes, thanks to Mr. Reagan’s corporate tax avoidance law. Jack Welch is the boss of General Electric. Do you think he is at all ashamed that small homeowners and shopkeepers in New York are expected to subsidize the next building housing NBC? You’ll not likely know because he is never asked that question by the reporters who manage to reach him for an interview. And the small property owners in the City can never reach him, except perhaps at the next GE stockholders meeting.