and their families in World War II. It was at his father's real estate
company that Trump got his start in business.
In 1971, he took control of his father's apartment rental
company, Elizabeth Trump & Son Co., and later on, he renamed
it The Trump Organization. Trump stuck mostly with real
estate investments during this period, particularly condo
associations, huge apartment buildings, and the Federal
Housing Administration (FHA)-backed housing, all in the New
York metropolitan area.
Trump hit a milestone in 1980 when he teamed up with the
Holiday Inn, Corp.,– at the time the parent company of Harrah's
casino resorts – to develop a $250 million hotel and casino
complex in Atlantic City, named Harrah's at Trump Plaza.
Eventually, Trump would buy out his partners and rename
the property Trump Plaza Hotel and Casino. Following the
successful launch of Trump Plaza, Trump purchased a second
property in Atlantic City from Hilton Hotels for a sum of $320
million. After the hotel chain had failed to obtain a gaming
license, Trump renamed this latest purchase, Trump Castle.
TRUMP’S SETBACKS
Back in New York, Trump purchased the Plaza Hotel in 1988 for
over $400 million and spent an additional $50 million renovating
and redecorating under his wife, Ivana Trump’s, direction. While
it seemed nothing could stop Trump’s meteoric rise in the
1980s, even the most ambitious real estate tycoons are at the
mercy of city bylaws.
When Trump purchased an apartment building and an adjacent hotel
in Manhattan, his plans for a large condominium tower on the site
were curtailed by the city’s rent control programs. In 1985, Trump
unveiled his plans for an $88 million complex on the West Side of
Manhattan, dubbed 'Television City.' However, community opposition
and a lengthy approval process ended Trump’s vision for the project.
These two failures pale in comparison to the setbacks that
would soon befall the Trump organization. In 1990, when the
booming real estate market of the 1980s began to decline, many
of Trump’s highly leveraged investments began to weigh heavily
on the company’s balance sheets.
TRUMP FACES BANKRUPTCY
Ultimately, in the early 1990s, Trump’s winning streak ground
to a halt. The national economy started to slow down, and New
York's economy stalled, causing Trump’s income streams to
dwindle. Soon, he found it difficult to make the interest payments
on the debt he'd accrued to finance his different businesses.
His annual loan payments were $300 million. The Trump
Organization and its subsidiaries owed $9 billion and Trump's
personal debt totaled $975 million.
The TRUMP RALLY Publication 103