to offer the network a sweetheart deal on its portion of it. “I don’t want the mayor to confuse the issue by bringing up other sites [NBC’s and New York City’s Plan Bs],” said Trump. “Nothing else in Manhattan does it.”
To underline the seriousness of NBC’s threatened departure, Trump then sent [Deputy Mayor] Townsend a confidential copy of the network’s request for proposals for a competitive site in New Jersey’s Meadowlands.225
Trump sought to step in the shoes of NBC—which had the leverage with New York City—and use its leverage, in the form of threats to leave New York City, to get his full tax abatement.
There are two problems here. Trump bluffed on his authority to represent NBC, which was simultaneously negotiating with New York City over a possible tax package incentivizing it to stay at Rockefeller Center. And Mayor Ed Koch, a huge personality, was not prone to give in to threats.
Trump’s strategy backfired. Here are sections of two letters Trump and Koch exchanged after New York City rejected Trump’s requested tax benefit.
Trump letter to New York City Mayor Ed Koch, May 26, 1987:
Dear Ed,
Your attitude on keeping NBC in New York City is unbelievable. For you to be playing “Russian Roulette” with perhaps the most important corporation in New York over the relatively small amounts of money involved because you and your staff are afraid that Donald Trump may actually make more than a dollar of profit, is both ludicrous and disgraceful…. I am tired of sitting back quietly and watching New Jersey and other states drain the lifeblood out of New York—and consistently get away with it for reasons that are all too obvious.226
Mayor Ed Koch letter to Trump, May 28, 1987:
Dear Donald,
I have received your letter of May 26. I was disappointed that you continue to believe that you can force the City’s hand to your advantage through intimidation. It will not work…. I also refuse to place hundreds of millions of dollars in future taxes at risk so that you can more easily build a 15-millionsquare-foot luxury condominium and retail development…. If NBC chooses your site and you make a profit, that’s fine and the American way, but it will not be on the backs of the New York City taxpayer…. I urge you to refrain from further attempts to influence the process through intimidation. It should already be clear to you that this tactic is counterproductive.227
This wasn’t just a personal feud between Trump and Koch. The city officials’ attitude toward Trump was summed up by NBC’s representative, Michael Bailkin, a former city official who had worked with Trump on the Commodore deal.
Bailkin indicated “the city did not like or trust Trump and was being forced to do business with him.”228
But Donald Trump wasn’t prepared to give up on Television City even without NBC. How could he proceed? Threaten to support a new mayor in the 1989 elections.
He met in Trump Tower with Lee Atwater, head of the Republican National Committee, and Roger Stone, the GOP consultant who was Donald’s lobbyist, and discussed ways he could put a fortune on the line against Koch without violating campaign finance limits. The strategy they came up with, leaked to the newspapers, was that he would spend up to $2 million on commercials that assailed Koch yet endorsed no one.229
Later, after several political developments, and with Koch looking better in the polls, Trump dropped this effort.
We know Trump’s advertising threat was empty. How? Trump and Koch ran into each other at Cardinal John O’Connor’s residence on Christmas eve 1988, shortly after Trump made this threat. According to Trump Show, “Donald [there] confided [to Koch] that he wasn’t really going to buy the commercials attacking Koch that he’d announced only days before.”230
Koch lost that election. But before he left, he put another nail in the coffin for Trump’s Television City. It was yet another example of how Trump’s threats backfired. According to Trump Show,
In the final months of the mayor’s twelve-year reign, top Koch officials moved to push the administration’s favorite projects to the top of the certification list…. [Trump’s Television City was placed] on the bottom. It was the first time that City Hall had ever dictated the priority list for certification.231
A footnote. NBC and New York City negotiated a deal directly in which New York City gave NBC and Rockefeller Center a “thirty-five-year property tax abatement, $800 million in partially tax exempt bond financing, and a fifteen-year sales tax write-off on most of an estimated billion in machinery and equipment purchases…. [This was] the richest package of public benefits ever given [to] a city business.”232
Its value to NBC? $98 million.233
Trump’s reaction? Threaten to sue. He also claimed the city deal gave NBC “substantially more tax abatements” than had ever been offered for Television City and that it created a “horrible precedent.” NBC’s representative Bailkin conceded this, noting that NBC received a better package than anything it had offered Trump.234
This seems strange. Why would the city give up a financially better deal with Trump to go with NBC? Only one reason—the city distrusted Trump. This had value.
One final comment on this deal, this one from Trump.
There were some who told me that I was hurting my chances for zoning approval by taking on Koch in the media. They may well have been right. I’ve waited a long time to build on the West Side, and I can wait a little longer to get the zoning I feel is necessary. In the end, I will build Television City with or without NBC and with or without the current administration.235
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