There is no name more synonymous with real estate — or self-promotion — than Donald J. Trump. From the glistening marble of Trump Tower, to NBC’s mega-hit, The Apprentice, the shadow of “The Donald” looms large over his eponymous empire.
But not everything "The Donald" touches turns to gold. Here, we take a look at some of his biggest gambles — those that paid off, and those that didn't. Click ahead for Donald Trump's best and worst business gambles.
By Constance Parten
Posted Nov. 10, 2011
In 1974, Trump brokered a deal with Penn Central Railroad to purchase one of their distressed assets, the Commodore Hotel. He paid $130 million to buy and renovate the hotel.
After six years of construction, the hotel reopened in November, 1980, as the Grand Hyatt. One of Trump's better gambles, the 34-story building featured a new façade of shimmering glass, reflecting the image of Grand Central Terminal next door.
In 1980, Trump began construction on his second major project in New York City. He planned to build a $200 million luxury high-rise on the site of the Bonwitt Teller building. Trump Tower would provide tenants with upscale stores, high-end office space and luxurious condominiums with breathtaking views of the city.
To do this, Trump Tower needed to be taller than its neighbors, presenting a unique challenge. One of the major obstacles for getting the project off the ground was air rights. Air rights determine the maximum height of a building, and Trump had secured enough to construct a 48-story skyscraper, but he wanted more. He turned to his next-door neighbor, Tiffany & Co., and compelled them to sell their unused air rights for $5 million, allowing him to add 20 stories.
All the effort paid off and in early 1983, the still-notable Trump Tower opened.
In May 1986, Trump criticized New York City’s ongoing efforts to renovate Wollman Rink, a popular ice skating spot in Central Park. Disgusted by the city’s inefficient use of time and resources, he contacted Mayor Ed Koch and offered to complete the renovation for $3 million dollars.
Initially, Koch balked, but after the media ran the story, the mayor agreed to let Trump take the reins.
Construction began in July, 1986. Four months later, Trump finished the project on time and $750,000 under budget. On Nov. 13, 1986, with standard Trump fanfare, Wollman Rink reopened and remains one of Trump's key contributions to the city.
In March, 1994, it was announced that Trump had teamed up with GE Capital to turn the Gulf & Western building into Trump International Hotel and Tower, a 52-story luxury condo-hotel at the southwest corner of Central Park.
Though the building bears the Trump name, he had very little control in anything other than the restaurant, retail, and roof space. Trump still made a significant mark on the lucrative project, however, selecting noted New York chef Jean Georges Vongerichten who opened Jean Georges on the ground floor. The five-star restaurant was the winner of the 2009 James Beard Foundation Award for Outstanding Restaurant.
Trump purchased the building at 40 Wall Street in 1995 for $1 million and slated it for a $35 million renovation. Property values soared and the building was worth as much as $500 Million by 2008.
With floors ranging in size from 6,000 square feet to 38,000 square feet, Trump ended up making $20 million a year in rentals in the 72-story landmark building, the tallest office building in downtown New York.
Trump bought 76 acres of the West Side rail yards along the Hudson River in Manhattan between 59th Street and 72nd Street in 1976. He later sold the land, but then re-purchased it in 1982.
He planned for and designed “Television City,” including the world’s tallest building, television studio space, 6,000-7,000 apartments housed in six 70-story buildings, a two-million-square-foot mall, and a 6,000-car garage. He battled with the West Side community for years to push the plans through.
In 1997 after years of negotiating, he finally broke ground on Trump Place, a reworked but still sprawling project including 25 acres of open space, 5,700 apartments, 18 residential buildings and 3,500 parking spaces.
This gamble not only paid off, it forever changed the Manhattan skyline.
In January, 1994, The Apprentice premiered on NBC. Trump not only stars in the business-focused reality show, but also serves as its Executive Producer, earning more than $1 million per episode. And he gets to fire people. Publicly. Definitely a good gamble.
In 2005, Trump spent $73 million to purchase and demolish the Chicago Sun-Times building. It would become Trump International Tower, Chicago, housing a hotel, condo, spa and retail and restaurant spaces. Even before the property was purchased, Trump Tower was slated to be the tallest building in the world. Trump scaled back the plans after the Sept. 11 attacks, however.
The project was completed in 2009 at a cost of $847 million, and Trump International Tower became the second tallest building in Chicago. But was it a good gamble? In 2010, the hotel was ranked Travel+Leisure's No. 1 large city hotel in North America.
In 1983 Trump bought the New Jersey Generals in the fledgling United State Football League. By 1986, the USFL suspended the league after failing to make money.
Trump reportedly spent about $22 million on the New Jersey Generals. While this deal wasn’t successful for Trump, it was great for the career of some football players, including Doug Flutie, Herschel Walker, Jim Kelly and Freddie Gilbert.
In 1985, Trump purchased the former Marjorie Merriweather Post estate in Palm Springs, Fla., from the Post Foundation for $8 million. He used the 126-room, 110,000-squqre-foot estate as a private residence until 1995 when financial woes required him to convert the home into the Mar-a-Lago Club. While the purchase didn't work out quite as expected, the club has been successful in its own right.
In the mid-1980s, Trump opened two casino hotels in Atlantic City, N.J. — the Trump Plaza and Trump Castle. To attract visitors, Trump held professional boxing matches at the city's Convention Center. Celebrities, professional athletes, and politicians flocked to Atlantic City and the casinos become a goldmine. Two years after opening, they gross $30 million per month. Continued…
With the success of Trump Plaza and Trump Castle under his belt, Trump began the construction of his third and most expensive casino, The Trump Taj Mahal, in 1988.
The $1 billion casino was a huge gamble. By 1993, all three Atlantic City casinos filed for chapter 11 pre-packaged bankruptcy. They emerged shortly after with restructured debt and lower interest rates. In 1995, Trump took the casinos public, raising $2 billion in two separate public offerings, using most of the proceeds to repay previous liabilities, turning an OK gamble gone south into a soft landing.
In 1988, Trump bought the famed Plaza Hotel on 59th Street and 5th Avenue in New York for $390 million. He won the hotel in a bidding contest against Philip Pilevsky and Arthur G. Cohen, two other Manhattan real-estate developers.
It was there that he married his second wife, Marla Maples in 1993. But by 1994, his money troubles require him to sell his share of the Plaza to help pay off debts. An OK gamble, but his financial situation didn't allow him to wait for the full payoff.
In 1989, Trump purchased airline Eastern Shuttle for $365 million, renaming it Trump Shuttle. The airline almost immediately ran into financial worries.
With a focus on luxury over convenience, the airline started losing a lot of its “important” passengers to Pan Am and Amtrak due to their more convenient and cost effective plans. But the real nail in the coffin for Trump Shuttle was gas prices, which doubled in the mid-1990s due to the invasion of Kuwait.
The Trump Shuttle ceased operations when it merged with Shuttle Inc, operating as USAir Shuttle in 1992, marking the end to Trump's travel miscalculation.