-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- WJPBR Email News List [EMAIL PROTECTED] Peace at any cost is a prelude to war! Dear Brigade, Interesting Wall Street Journal article below about Donald Trump and how he owns only 30% of Trump Place, the new 75 acre Trump development near the UN in Manhattan. According to the WSJ, the majority owners are Hong Kong investors. This sounds like Trump's own ChinaGate. These Hong Kong investors are the same Chinese moguls who finance the factories throughout China and Asia which take advantage of our free trade policy -- to take our manufacturing jobs and destroy so many of our communities. GO PAT GO!!!!!!!!! Linda ------------------------------ THE WALL STREET JOURNAL - January 19, 2000 Commercial Real Estate Trump's Billions Are Based on Profits That Are Far in the Developer's Future By LINDA SANDLER Donald Trump, who hates to shake hands, happily pumps the grimy hands of construction workers who are laying the 19th floor of his latest condominium project, Trump World Tower. "That's good working dirt," he explains, glancing at Manhattan's United Nations buildings below. All of the 53-year-old developer's site tours these days are practice for a possible $100 million presidential run, which he says he'll announce a decision on soon. "I'm rich and I'm successful," Mr. Trump says. "Isn't that the kind of president you want?" Well, maybe. But just how rich and how successful is Mr. Trump? He puts his net worth at $5 billion, and indeed lives a lavish lifestyle, including a gold- lettered 727 jet and helicopter, a penthouse apartment in Trump Tower on Fifth Avenue, assorted houses and long-legged models. But a look at the major sources of his wealth, including the Trump Place apartment development on New York City's west side, the 70-story Trump World Tower project and the midtown General Motors Building, shows that several of his billions are based on profits that are far in the future -- and far from guaranteed. "Donald exaggerates sometimes. He's talking of futures," says Mr. Trump's aide, Abraham Wallach, executive vice president of Trump Organization. Indeed, many real-estate professionals privately assert that Mr. Trump's real worth, consisting of assets and fees that are more or less in hand, falls far short of the $1.6 billion tallied by Forbes magazine. This needn't hurt Mr. Trump's chances with the Reform Party he's espousing. "What blue-collar workers [who are the core of the party] really like about Trump is he's a rich guy who got knocked down, and he got up off the mat," says Roger Stone, who is running the pre-campaign, referring to Mr. Trump's reverses and the Trump casinos' bankruptcy reorganization in the early 90s. Touting his wealth Mr. Trump says, "I have assets you don't even know about." However, he isn't as big as he says. Take Trump Place, which he deems "the largest development ever approved by the New York City Planning Commission." Finished, it would have 16 apartment buildings on 75 acres. Entitled to 30% of future profit, Mr. Trump says it's already worth $2 billion to $3 billion to him, making it appear the biggest single component of his net worth. But only two buildings are complete, with richly appointed lobbies and great views but cut off from the Hudson River by an elevated highway. A third building has just begun. Meanwhile, the Hong Kong investors who control the development tried to sell part of it in 1998, but couldn't get the price they wanted from bidders such as Related Cos. If the market turns down, it could take 10 years to make a profit, Mr. Wallach says. He maintains that in 10 years Mr. Trump could still "walk away with $1 billion." But factoring in uncertainty and delay that $1 billion would have to be severely discounted when tallying Mr. Trump's current net worth. Mr. Trump's Atlantic City casinos show the danger of counting chickens before they hatch. Two years ago, he shopped the casinos for $1 billion -- Mr. Trump now says he was only thinking of selling part of the company. But his 42% stake today is valued in the market at a mere $50 million or so. "That's my biggest sleeper," he says. Counting his wealth, Mr. Trump may be a bit premature, too, with the $360 million Trump World Tower project, where he boasts of having put up only $6.5 million, or 10% of the equity, to get 50% of the profit. Typically Mr. Trump, having once lost his shirt, risks little money but earns a profit -- paid only after lenders and partners get their money back -- by acting as developer and promoter. He currently values his stake in what will be very fancy waterfront condos at $250 million. To get that number, he assumes condo prices will keep rising through the sales period ending in mid- to late- 2002. But conservative accounting would require Mr. Trump to discount -- by 20% to 30%, say real-estate investors -- the $250 million he expects from Trump World Tower, as the money is three years away and may be reduced by a slowdown or failure to finish the building on time. Even Mr. Trump sometimes worries about an end of the long condo boom. Mr. Trump likes to boast that he owns 50% of the General Motors Building, the pin-striped office tower that looms over Central Park. He says the building is worth "much more" than the $800 million paid in a 1998 bidding war. But to see a profit, he must reduce debt and pray the office market doesn't cool. He and insurer Conseco Inc. each invested only $9 million of equity, according to confidential documents of the transaction, while heaping debt of about $780 million onto the trophy building, including an $80 million subordinated loan from Conseco. Meanwhile, an advertised plan to make a quick profit by selling offices as condos seems to have fizzled. And though Mr. Trump says, "I'll make more money without it" because leases are turning over at high prices, there are signs that Conseco may be restless. A Conseco spokesman says, "We're happy with the investment." But Mr. Wallach, just back from Germany to try and raise $400 million, says, "We're actively working to pay off Conseco's subordinated debt as well as a piece of the other debt." For sure, Mr. Trump is "a great builder," says Robert Dowling, managing director, real-estate lending, for Germany's HypoVereinsbank AG, which lent $295 million for Trump World Tower, whose great height has drawn neighbors' ire. Mr. Trump's renovation of 40 Wall Street, a once-distressed 1929 office building, is widely applauded. But while Mr. Trump says it is now worth $350 million, Mr. Wallach says a would-be buyer valued it at $150 million, net of debt. One of Mr. Trump's specialties is fees: He expects to earn $50 million of them this year. After licensing his name to the Trump Tower Seoul, he hopes to name buildings in Dallas and Vienna in the next year or so. From Trump World Tower condo sales, Mr. Trump stands to earn sales commissions and incentives of $30 million over three years, plus a $10 million fee for licensing his name. He gets fees for managing buildings and for marketing services to his casinos, which despite their poor performance also paid him compensation of about $3 million in 1998, including stock options. The self-made man downplays the amount he'll get when his late father's will is distributed this year. He is entitled to a one-fourth share of an estimated $200 million. While bankers in the bad days put him on a budget of $5.4 million a year, he says it is less now. "Most of the restaurants I go to don't charge me," he says. "They want me there." 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