Trump: The Art of the Deal

Donald Trump’s interest in the Bonwit Teller building at 57th Street and Fifth Avenue began in 1971 when he saw its prime location and large lot as “perhaps the single greatest piece of real estate in New York City” (145). However, when he approached Franklin Jarman, the head of Genesco, which owned Bonwit Teller, Jarman dismissed the idea of selling. Trump persisted, writing multiple letters over three years despite receiving no encouragement. In 1978, Trump read that John Hanigan had taken over Genesco to sell assets and pay off debt. Trump called Hanigan, who agreed to meet after recognizing him from the letters. This, Trump says, shows the importance of “timing” (148) in any deal. Hanigan was eager to sell the property, and Trump negotiated a $25-million deal to buy the building and lease. However, Trump needed to keep the deal secret to avoid competition. He convinced Hanigan to sign a letter of intent without a board approval clause, securing the deal before others could bid.

Trump approached Chase Manhattan Bank for financing, but they hesitated because Genesco did not own the land. Since the Equitable Life Assurance Society owned the underlying land, Trump met with George Peacock, head of Equitable Real Estate, and proposed a 50-50 partnership: Trump would contribute his building lease, and Equitable would contribute the land to develop a skyscraper with Trump.