Trump, page 39
A week after Trump’s initial call, Moore phoned him to say that he had talked to Rozenholc and that the two were willing to meet.
“I hear he’s pretty difficult,” Trump objected, asking again if Moore thought Rozenholc could be “reasonable.”
“In any event,” Moore replied, “I am going to come with my attorney.”
“Well, I’ll just come alone,” said Trump.
“I don’t think that’s advisable,” Moore countered. “You should bring your attorney. And if you don’t, at least bring with you a letter stating that you know I’m going to bring my attorney and that you consent to meeting under those circumstances.” Trump said he would look into it and decide on his own.
A lunch was set for February 12, a few days after the state hearings were scheduled to begin. Moore and Rozenholc decided not to mention these scheduled settlement talks to Joyce Goldstein, the state enforcement counsel who was trying the case against Trump and speaking with them almost daily. Neither did they inform the tenants, with the exception of a couple of top leaders.
Hours before the lunch, Moore called Trump and switched locations, asking that they meet instead at The Brook, an elegant and exclusive private men’s club on East 54th Street, where Moore, who was a member, could reserve a private room. Moore said later, in a sworn affidavit, that he and Rozenholc decided they didn’t want to meet in a public restaurant where they wouldn’t know “who might be seated at surrounding tables” or whether “photographers might be present for some purpose.” The Brook features a fifty-foot-long table with candelabra and all-day settings on the main floor, as well as small upstairs dining rooms which Moore describes as “mahogany-paneled as if J. P. Morgan had done [them].” Moore felt the Social Register trappings would put them on a level playing field with Trump, just as Sally Goodgold had used her West Side apartment years earlier to show Donald how unimpressed with him she was.
“I can’t get into a club like this because I’m a five-foot-six fat Jew from the Bronx,” Rozenholc greeted Donald. “You can’t because you’re from Queens and low-class.” Moore, dressed in his customized Turnbull and Asser shirts and the same sort of Morty Sill suit that Michael Douglas would make famous in the movie Wall Street, patronizingly guided Donald and his in-house counsel Milton Goldfine to their chairs.
Trump reached his hand out for a menu, but the waiter stood stiffly still. “Mee-ster Moore,” said the waiter, “it seems that your guest wants to know what the specials are.” Moore watched Trump withdraw his hand clumsily, “like the retractable arm of a space shuttle,” he would later gleefully claim. Moore could sense Donald’s growing discomfort.
Donald was, from Rozenholc’s perspective, too friendly and engaging as the lunch began, complimenting Moore and him and the food and the place. “I’d love to settle this case so I can hire you,” he said to Rozenholc, stressing just how impressed he was with the Fischbein firm’s work in the case. The attorney, finding the seduction disingenuous, responded: “The only way I’ll be your lawyer is if I fuck you in this case.” (Moore would claim that at some point during the protracted negotiations with Trump he, too, got a Trump job offer, relayed through an intermediary.)
Donald started to ramble, asking Moore what he thought he would have had to pay the tenants as an inducement to vacate if he had tried back in 1981. He cited figures from a major New York magazine article, written by Tony Schwartz and still on the newsstands, that quoted Moore as saying that for $50,000 apiece, offered at the time Trump bought the building, “most of the tenants would have been clicking their heels on their way out.” Trump told Moore and Rozenholc he agreed with Schwartz’s final vacate estimate of $6 million, including $500,000 payments to a few holdouts. Schwartz’s conclusion was that, had Trump tried the congenial approach, rather than playing a farcical game of “fumbling and bumbling” hardball, his grand tower worth hundreds of millions would by now be rising into the sky.
Moore refused to be drawn into this conversation, sensing that Donald was trying to get him to put a pricetag on each tenant’s exit, still possibly thinking of a buyout. But since Donald had announced at the start that he thought the Schwartz article was fair, Moore couldn’t resist returning to it, pointing out that Schwartz, who would later author The Art of the Deal, had called Trump’s forces at 100 Central Park South “the gang that couldn’t shoot straight, a fugue of failure.” Not only had Schwartz proven that the great dealmaker had spent a fortune because he refused to stoop to nickel-and-dime deals with common tenants, but he’d also established, with Rozenholc’s brilliant help, that Donald’s attempt to qualify under state law formulas for a demolition permit was hopelessly doomed.
Trump’s plans for the site, submitted as part of his demolition application, did not create enough new apartments in the 100 Central Park South portion of the total project to meet the legal requirement that the new structure contain 20 percent more units than the old. Schwartz and Rozenholc also showed that he had juggled the income and expense figures for the building in order to meet the strictly regulated standard that prevented him from demolishing it if the yearly return was at least 8.5 percent of the assessed value. To try to minimize the building’s revenue, Trump had listed $107,000 in legal fees he’d paid to try to evict eight tenants and had concealed $137,000 in bonuses he tacked on to the store rents. With these figures adjusted, Trump was making a 15 percent profit on the building and couldn’t tear it down.
“You mustn’t have liked being referred to as ‘the gang that couldn’t shoot straight,’” Moore teased.
“You have to look at the article as a whole,” replied Trump, stunning Moore. “If nothing else, it brought attention to my real estate. That building is worth much more now. As a result of this article I have had countless offers to sell the building, to condo and co-op converters, around the $30,000,000 area.” Trump added that he’d bought the building so cheaply the contract barred him from revealing its price, and Moore commented that it was “amazing” that Donald had found “something positive” in the article or in the whole situation at 100 Central Park South.
“Sell, Donald,” Moore urged. “Sell at $30 million. Please, make your money. Take your money. Make your huge profit and just go away. It’s not personal, but people will always be afraid living with you as a landlord.”
“Well, you know,” Donald responded, “it may be just as good an idea for me to sell it because if I co-op it, or convert it, or condo it myself, there could be tax problems, and there could be regulatory problems, as well.”
Somehow, Trump, Moore, and Rozenholc drifted into a conversation about the concept of a sale of the building to the tenants, with Goldfine listening quietly. Trump, Moore, and Goldfine would provide affidavits a few weeks later that differed in their accounts of who had initiated the rather revealing chat, but neither side disputed the fact that they began discussing a purchase deal in grand detail.
While a sale to the tenants was only one of several options discussed, it was clearly the one that Moore and Rozenholc found most enticing. Indeed, Rozenholc would later contend in an interview that “the idea to buy the building was mine,” adding that “from the moment John came to me” about Trump’s initial approach, “I thought, let me use our leverage to buy the building.” At the right price, the Tenants Association would control a potential gold mine, with twenty apartments vacated since Trump’s purchase and thus available for lucrative resale as part of a co-oping of the building. This prospect—which would put Moore and Rozenholc in control of a multimillion-dollar property—had long intrigued the two and, though it was hardly the goal of the building’s poorest tenants, their pursuit of it at the expense of other alternatives would in the coming months shape, skew, and even extend the conflict over 100 Central Park South. Most of the tenants Moore mentioned in his chats with reporters—especially the fifteen women over the age of sixty living alone—could not afford to buy their apartments no matter who owned the building. Their primary interest was in compelling Trump to execute a binding nonharassment commitment and getting reliable maintenance and repair restored, not in trying to provoke a cheap purchase by the association.
But to the wandering entrepreneur Moore, a purchase began to look like the deal of a lifetime. At the very least, he calculated that he could make a $300,000 profit by buying and selling his own apartment if the tenants could obtain the building from Trump at a good price. Rozenholc stood to gain as well—he would serve as lawyer for the tenant corporation during the closing, co-oping, and future management of the building, a long-term source of fees. According to Goldfine’s sworn and uncontested recollection, Trump, Moore, and Rozenholc got down to such specifics that they began figuring out how many apartments could be altered or combined to maximize the number of units with views of Central Park—hardly the expected concerns of tenant champions.
Trump also raised the possibility of selling the building to another developer, but he made it clear that it would be cheaper for tenants to buy their own apartments if he co-oped the building than if he sold it at a premium and the new owner co-oped it. Trump’s favorite option, however, was a settlement involving his withdrawal of the demolition permit, the termination of the state and tenant legal actions, and a written guarantee that he would make substantial improvements and provide adequate services to the rental tenants.
Moore and Rozenholc flatly rejected this offer, with Moore saying that the tenants expected to get a protective order against him at the end of the state hearings and that if they settled without such an order, “we have no assurance that you would not begin harassing us again in another year or two or three, and then we would have to start all over with a protective order.” The rejection of this proposal, as well as the expression of interest in an outright sale, were positions Moore took without any clear reading from the sixty or so families left in the building. He and Rozenholc were becoming the sole arbiters of 100 Central Park South’s fate; Rozenholc did not even tell Fischbein about the meetings.
Donald and Rozenholc began discussing the tax and other legal implications of Trump’s co-op options, and Donald gradually moved in the direction of a sale to the Tenants Association as the most advantageous deal. As the three-hour luncheon ended, Trump said he would try to determine a fair price for the building and Moore offered to find out how many tenants would buy apartments if Trump sold the building to the association. Goldfine’s sworn recollection was that Moore asked Trump to come back with a price; both sides agree that they expected to move forward with a possible negotiated sale. The lunch ended without a tab; the billionaire’s veal would ironically appear on the tenant leader’s monthly club bill.
A few days later Trump called Moore again and said he’d like to come over to his office immediately for a quick one-on-one chat. Trump made it clear that he had not done his homework, and had no firm proposal to make, but said he had “some numbers together” and thought they should talk again. Moore declined, insisted on bringing Rozenholc to any meeting and added another member of the Tenants Committee for a February 22 lunch at The Brook.
Trump opened this second discussion with the same settlement proposal he had made ten days earlier—a mutual withdrawal of the tenants’ petitions and a modernization of the building. When that was rejected, Trump said: “I have a bad feeling in my stomach about sitting down here and trying to work out our problems as long as we’re moving full speed ahead with this state DHCR case. I ask you to see if we can’t stipulate to stop those proceedings, or hold them off while we’re discussing alternatives.” The state enforcement action was now in its third week, and DHCR attorney Joyce Goldstein was making solid progress, increasing the pressure on Donald to settle the case.
“We can’t do that,” said Moore, who hadn’t yet told Goldstein about his meetings with Trump. “There are fifty people who have been harmed. Unless I am ordered to by the state, or by Mr. Manny Mirabel, the head of DHCR, I can’t do it because the people want a conclusion of this.”
“I don’t want to negotiate with a gun to my head,” Donald answered.
“It’s a psychological problem,” Moore said. “You will have to go ahead. We are going to continue the hearings, and if you want to talk to us about ideas you have, we are here to listen.”
Donald began talking about a new vision he had for the building, and even Moore thought he appeared genuinely excited about this plan to preserve and restore it. Trump praised the way the Helmsleys had recently maintained intact the landmark Villard Houses and built the Helmsley Palace around them. He said he’d decided that he really liked the look of 100 Central Park South and that with arches, a new bronze door, redone windows, and sprucing up in front, it could be terrific. He now wanted to do the project in two phases—to put in condos at the Barbizon and sell them at $700 a square foot and then to “soup up 100 Central Park South, maintaining the integrity of the building.”
Ideas were pouring out of him at “a mile a minute,” recalled Moore, who labeled Trump a “very fertile man.” He began discussing making the two buildings look alike, “wrap it around with one skin, make it look like one big thing, one unified piece.” While these architectural plans represented a major shift from his earlier concepts, and meant the building might survive, they were hardly what Moore and Rozenholc wanted to hear. Where did they fit in?
Both sides agree that Trump made the following offer at that lunch: “I will continue the building as a rental, but won’t rent the twenty vacant apartments for a one-year period. For a period of two years the tenants will have the option to buy the building from me at a price of $15 million.” From Trump’s vantage point, with supposed offers of $30 million, he was offering a bargain, yet one that would still leave him with a sizable profit. But to Moore, it was an unclear and unacceptable price. Rozenholc later recalled: “We got him to put the building on the market, and at a price that was not that outrageous. We rejected it, but only because I thought we’d do better.”
Trump agreed to rethink a price based on whether he’d sell the tenants the entire building, sell it without the eight to ten stores, or sell it without the stores and without the vacant apartments. Unbeknownst to the media, which was covering the 100 Central Park South conflict as a David versus Goliath tenants’ rights war, it had in fact become a behind-the-scenes haggle over price and terms.
A few days after the second lunch, Donald called Moore, reiterated his $15 million price, and adding that it was for the building without the stores. “Donald, this is ridiculous,” Moore cut off Trump. “I consider that a nonoffer, and I think we have probably said about all we have to say.” Rozenholc said the offer was rejected because they believed they had “the leverage to get him lower.”
Moore and Rozenholc knew that time, as well as the power of the state and city governments, was on their side. In addition to the DHCR hearing, the city administration was just about to bring a stunning lawsuit against Trump. Moore had been meeting with two young assistant corporation counsels, and they had agreed to sue Trump under a relatively new anti-eviction statute, passed by the city council in 1982 and largely untested in the courts. The city suit, which sought to enjoin Trump from his reputed “unlawful and egregious attempts to harass and evict without due process of law,” was filed a week after Moore’s second lunch with Donald and sought $10,000 fines against Trump for each provable act of harassment.
The city complaint added little new information to the case against Trump, but it refocused public attention on the plight of the 100 Central Park South tenants, got John Moore’s phone ringing again, and pitted the city against Trump at the moment when he could least afford it. Trump needed a good relationship with City Hall because in January of 1985 he’d finally bought the property that had been his seventies obsession, the 60th Street rail yards. Every indication was that, for the moment at least, Ed Koch was willing to keep an open mind on Trump’s potentially billion-dollar West Side extravaganza. Donald’s ambitions for this property were a powerful impetus for him to resolve the tenant mess; indeed he had made his initial approach to John Moore the same week he closed on the yards. The last thing he needed was a dirty tenant war a couple of blocks away from his planned gargantuan project.
Much the same situation applied in Atlantic City, where the Division of Gaming Enforcement and the Casino Control Commission, which would soon review his first Castle license application, would surely look askance at any harassment findings.
While Trump was under no immediate time pressure in the DHCR proceeding, where tenant testimony would continue for months, the city suit required a quick response. The city was seeking an injunction against him pending a full hearing, and if it obtained one it would be a terrible public relations blow. Donald had to find a way to block that. He consequently alleged in his response papers that the city had filed the suit for “political” reasons, charging that the Koch administration had “jumped on the bandwagon,” joining the state on the side of tenants in a battle with a prominent landlord in the middle of an election year. The argument was a credible one, especially since the complaint merely duplicated the allegations of the state action and was initiated by a young assistant who was running the Koch campaign on the East Side. Donald certainly noticed that this was the second city lawsuit filed against him at the start of a mayoral campaign; the Trump Tower tax abatement issue had exploded precisely four years earlier, in March 1981. Another political twist was that the lawsuit was filed three weeks after Badillo withdrew as a possible candidate against Koch, announcing his enmity for the two anti-Koch candidates left in the race. In the months ahead, with the city aggressively pursuing Trump in litigation crucial to the financial viability of Badillo’s firm, Fischbein arranged a rapprochement meeting between the mayor’s former foe and top City Hall brass.
