earlier, needed an unprecedented tax break from New York City to get his Commodore deal done. To get it, he needed New York City’s land-use authority, its Board of Estimate, to approve the tax exemption.
Here’s the Trump threat that got them on board, according to Trump Revealed. This occurred during a press conference outside the hotel called by three local lawmakers, just a day before the Board vote.
When the politicians had finished, Trump, who had shown up to refute their argument, told reporters that if the city did not approve the assistance, he would walk, and the Commodore would rot.
To dramatize how decrepit the Commodore would be without him, Trump had [earlier] directed his workers to replace the clean boards covering up the hotel windows with dirty scrap wood.222
Trump got his tax exemption.
Was his threat “to walk and [leave] the Commodore to rot” and the stark image of a dirty, shuttered hotel in a decrepit part of town effective? Yes.
First, it reflected strategic planning. Trump smartly understood the public impact of the image of a shuttered hotel with “dirty scrap wood” and directed it like a TV producer.
Second, was his threat to walk credible or empty? Credible. Without a significant tax exemption, no developer could make that project work. But Trump highlighted the city’s risk by focusing on his control of the hotel site. And the city wanted the area improved (the city’s Plan B now appeared worse).
Third, was this strategically selective? Perhaps. Trump’s flair for the dramatic and the visually compelling image of the run-down hotel could have impacted a board member who might otherwise have voted against it. In that sense, his threat could have broken an impasse.
Did it undermine the legitimacy of the vote or engender ill will or resistance to implementation? Unlikely.
Fourth, was the threat appropriately framed?
– Specific and detailed? Yes.
– Address the Board’s interests in redeveloping a rundown area? Yes.
– Delivered respectfully in a measured, serious tone? Unclear.
– Include meaningful consequences? Yes.
– Link to a timeline? Yes, the Board voted the next day.
– Include an escape route if circumstances change? No, but that would have been counterproductive as the Board would either approve or disapprove the redevelopment.
Overall, Trump’s threat satisfied many of these elements, and he got his tax exemption two years later, after working with the city to address many other items on the negotiation table.
Thus, this particular threat didn’t appear to cause long-term damage to his relationship with the city.
• Trump’s Tiffany Threat
Trump had a grand vision for Trump Tower. To make it work, however, he needed the air rights from his soon-to-be neighbor on Fifth Ave, Tiffany. Tiffany occupied a small classic building adjacent to Trump’s proposed tower. Trump was willing to pay $5 million for the air rights but didn’t want to. He also was afraid Walter Hoving, who ran Tiffany, would balk, as Trump’s proposed design was radically different from the architectural style in that area.
What did Trump do? Before meeting with Hoving, Trump had his architect construct two different models of his tower. One was a graceful, fifty-story building. The other was an ugly building Trump could argue would be what New York would end up with due to zoning requirements if he didn’t have Tiffany’s air rights. Trump showed Hoving both models, implying Hoving’s Plan B would be a very ugly neighbor. Trump limited the attractiveness of Hoving’s perceived Plan B.223
Hoving sold Trump his air rights.
Was this implicit threat to build an ugly tower next door effective? Yes.
First, Trump strategically planned it.
Second, was it credible or empty? Probably empty. Would Trump have built an ugly building if he didn’t get it? Unlikely. He probably would have just paid more for the rights.
Third, strategically selective? Not according to our criteria. On the other hand, it would be far less likely to engender ill will and invite retaliatory measures than if it were explicit.
Fourth, did Trump appropriately frame it?
– Specific and detailed? Yes.
– Address Tiffany’s interests in a beautiful structure next door? Yes.
– Delivered respectfully in a measured, serious tone? Unclear.
– Include meaningful consequences? Yes.
– Link to a timeline? Unknown.
– Include an escape route if circumstances change? Unclear but unlikely.
Overall, pretty effective.
Trump’s threats, though, proved ineffective in other business negotiations.
• Trump’s NBC/Television City Threat
Donald Trump controlled 75 acres on New York City’s west side in 1986. NBC had recently informed city hall it planned on leaving Rockefeller Center and Manhattan unless it received a huge tax break. To Trump, a marriage made in heaven.
His vision? Lure NBC to the site, build the world’s tallest building along with 7,600 luxury condos in six 76-story apartment buildings, two office buildings, a retail mall, a massive parking garage, and a vast amount of open space and parkland. Trump hoped to vault to the top of New York City developers in one single bound.
The problem? He needed a huge tax break to make these nuptials happen. NBC wasn’t yet committed. Neither was New York City. So Trump applied for a $700 million tax abatement from New York City to underwrite the development’s construction, hoping to use it to entice NBC. Trump called this development-in-waiting “Television City.”224
Here’s a description of Trump’s negotiations with New York City and Mayor Ed Koch and the threats associated with them. Keep in mind that Trump’s relationship with Koch and New York City had already been strained due to problems related to the Commodore Hotel.
The following meeting took place on September 11, 1986 and included Koch’s top economic development officials, including Deputy Mayor Alair Townsend. It was described in Trump Show.
A cocksure Trump told the assembled bureaucrats that unless the city acted, a cramped NBC might move to New Jersey or to Burbank, where the network had a great deal of extra acreage….
Trump argued that he had the only site in the city suitable for major new television studios and that he had worked out a deal with the network giving it a third of his site. “NBC is in love with it,” he said, claiming that the network had been designing its own facility for the property over the past three months. Asked by Townsend how strong a commitment Trump had from NBC, Donald
