Trump pushed for a sweetheart tax deal on his first hotel. It’s cost New York City $410,068,399 — and counting
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In 1975, New York City was run-down and on the verge of bankruptcy. Twenty-nine-year-old Donald Trump saw an opportunity. He wanted to acquire and redevelop the dilapidated Commodore Hotel in midtown Manhattan next to Grand Central Terminal.
Trump had bragged to the executive controlling the sale that he could use his political connections to get tax breaks for the deal.
The executive was skeptical. But the next day, the executive was invited into Trump’s limousine, which ushered him to City Hall. There, he met with Donald’s father Fred and Mayor Abe Beame, to whom the Trumps had given lavishly.
Beame put his arm around the Trumps. “Anything they want, they get,” Beame said, as recounted by Trump’s first biographer, journalist Wayne Barrett.
Trump got an unprecedented 40-year tax break. According to new figures given to us by the New York City Department of Taxation and Finance, the break has cost the city $410,068,399.55 in forgone revenue to Trump and the hotel’s subsequent owners. The break ends this April.
In “The Art of the Deal,” Trump said there was a reason for the 40-year deal: “Because I didn’t ask for 50.”
Trump got it over the misgivings of some state officials. The former chairman of the state economic development agency, Richard Ravitch, recalled in an interview that Trump approached him in December 1975. Trump, who had ties to Gov. Hugh Carey, “started raising his voice, and threatening me, and said, ‘If you don’t give me a tax abatement, I’m going to have you fired.’ I said, ‘Get the fuck out of here.’”
Ravitch was not fired, but the state agency did approve the break. Trump has said the decision was made on the merits.
“Really the story of Donald Trump, rather than this Horatio Alger figure, this is a guy who managed to learn how to turn politics into money,” said Barrett during a 1992 WNYC interview, the same one in which he told the Beame story. (Barrett died on Jan. 19, 2017, on the eve of Trump’s inauguration.)
Trump has long worked hard to avoid taxes. “That makes me smart,” he famously retorted during a 2016 presidential debate. But Donald Trump didn’t come up with those smarts himself.
In 1954, Fred Trump appeared before the Senate Banking Committee, which questioned his practice of valuing his properties at top dollar for government mortgages while using much lower assessments for tax purposes. A federal report criticized the practices that Fred Trump and other developers engaged in, calling them “outright misrepresentation.”
It’s all in our latest episode of “Trump, Inc.” Listen.