Fred Trump built his real estate empire favor by favor, brick by brick. From the 1930s onward, starting in Flatbush, relying on the New Deal program of the Federal Housing Authority to underwrite loans, he made millions, then tens of millions, then more. He was the biggest operator in Brooklyn. He built thousands of homes and owned tens of thousands of apartments. He didn’t want to edge into the Manhattan market, where the land prices were high and the competition fierce. He had Brooklyn wired.
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Donald not only had his eye on the Penn Central yards but also spotted the seedy Commodore hotel next to Grand Central Station. The part-owners of the Penn Central property were owners of the hotel. He thought he could get a two-for-one bargain. Donald got an agreement from the Hyatt hotels to manage it, but it was non-binding. He needed a huge tax abatement to finance the $80m renovation to pay the mortgage and property taxes. This is when the art of the deal kicked in. Its secret was the friends of Fred Trump.
Beame and Steingut got behind a bill in the assembly crafted to provide exactly this unique type of tax abatement. Unfortunately, the assembly was overwhelmed with the city fiscal crisis and adjourned before passing it in the 1975 session. Beame’s administrator for the Lower Manhattan Development Corporation, Michael Bailkin, devised a scheme for Trump to buy the Commodore from Penn Central and donate it to the city, which would pay the taxes to itself and lease it to Trump for 99 years, who would reap the benefits but pay no taxes.
Donald hired a lawyer, Bunny Lindenbaum’s son, Samuel “Sandy” Lindenbaum, who would become renowned as the “dean of zoning”. The idea of the 99-year lease wouldn’t fly. If the city owned the hotel, it would have to put it up for sale to public bidding. So Bailkin proposed using the state’s Urban Development Corporation as a vehicle to give the tax exemptions and evade public bidding.
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Donald stomped through the city like he was King Kong. He built Trump Tower on Fifth Avenue with ready-mix cement from the mob, the “Concrete Club”, they called it, provided by Anthony “Fat Tony” Salerno, boss of the Genovese crime family, the client of Roy Cohn, and under the supervision of teamster boss John Cody, under the control of Paul Castellano, boss of the Gambino crime family. Cody bought an apartment for his mistress in the completed building without filing a loan application to show his income.
(Cody was convicted of labor racketeering in 1982 and sentenced to prison. Salerno was convicted in 1988 and sent to prison. His contract for concrete to build Trump Plaza was listed in his indictment as one of the charges of racketeering. Castellano was assassinated at Sparks Steak House in Manhattan in 1985 on the orders of John Gotti, who assumed control of the Gambino family.)
