February 22, 2023

EVEN US GRANT WAS A MORE SUCCESSFUL BUSINESSMAN:

Donald Trump Has Been Lying About Trump Tower For Decades (Dan Alexander, Feb. 22nd, 2023, Forbes)

Trump Tower started as a bold idea from a brash developer, eager to make his mark in Manhattan with a signature building on Fifth Avenue.

To back up such bluster, he offered big numbers, telling Forbes he sold 85% of the residential units for from $500,000 to $12 million apiece before the building had even opened. "The apartments will bring in $268 million, all profit." He repeated similar numbers to the New York Times, which also printed them, at one point citing "a financial statement from an outside accountant." Biographers referenced the same figures, which became cemented into the legend of Trump.

But the numbers were not true. A fresh review of property deeds shows that in 1983, the year Trump Tower opened, Trump and his partners in fact sold about 60% of the apartments, or 150 units, in the building. Roughly 130 of those went for less than $500,000, with the cheapest fetching just $130,000. The most expensive one sold for $2 million, one sixth the price that Trump claimed. By the end of the year, he and Equitable had taken in $45 million--a good start, but not nearly enough to pay back the $130 million they had borrowed, let alone take in hundreds of millions in profit.

The apartments ultimately all sold, fetching about $125 million in total, according to the records. Trump bought out Equitable in 1986, leaving himself with the base of the building, which housed both retail and office space, including some he used for his own firm. He also ended up with the penthouse, where he and his family moved. From his office on the 26th floor and his apartment on the 68th, Trump managed his business and life for decades.

He invited Forbes over multiple times, as part of his much-publicized effort to push himself higher on the annual Forbes 400 list of America's richest people. The property played a key role in the calculation for decades, since its office-and-retail space long remained one of Trump's most valuable assets. "Trump says $275 million," read a reporter's notes from 1997. "He maintained ownership of the commercial space on the ground floors. Trump says that portion throws off $18 million a year."

Another lie. Underwriters, scrutinizing the building around the same time, determined that the property was only producing about $6.3 million of annual net operating income, according to lending records. An appraiser, meanwhile, determined that it was worth just $65 million, less than one-fourth the figure Trump suggested. To those familiar with Trump, his boasts sounded ridiculous. "I had a laugh," says Barbara Res, who worked with Trump from 1980 to 1998 and oversaw the construction of Trump Tower. "I mean, it didn't seem like he had the kind of money he claimed he had."

But Trump stayed on the offensive, and eventually, he did earn more money. In December 2006, news hit that Gucci was moving into Trump Tower, as part of a massive deal that brought in more than $15 million of rent a year on average. Profits surged to $16 million by 2010, according to lending records. Two years later, Trump took advantage of falling interest rates and refinanced the property, replacing $27 million of debt with a $100 million loan, reducing his rate from 7.4% to 4.2% in the process. Trump walked away with $68 million tax free.

Far from satisfied, he kept lying. He famously claimed his 11,000-square-foot penthouse was about 30,000 square feet, changing his financial statements to reflect the true size only after Forbes called him out on it. That lie became a key piece of evidence in both the attorney general's case and the district attorney's investigation. Strangely, no one seems to have drilled down on the fact that Trump also was throwing out inconsistent numbers for the square footage of the building's commercial space, which is far more valuable than the penthouse.

Trump signed his name to one document that suggests there were fewer than 200,000 rentable square feet. But records connected to a loan say 215,000 square feet. A prospectus for a different loan counts 244,000. A city filing lists 257,000 square feet, citing a different document, which in fact says far fewer. Then there's a Trump statement that lists the retail space at 114,000 square feet, even though a separate one says 46,000. With so much contradictory information flying around, it is hard to figure out the true size of the property.

But a logical place to start is Trump Tower's founding document, its condo declaration.

Posted by at February 22, 2023 3:04 PM

  

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