Tenants thwarted Trump’s Central Park real estate ambitions

NEW YORK >> Madelyn Rubinstein moved to New York City from Long Island in 1985 with big dreams of making it as a professional pianist.

She had a head start: a very cheap rent-controlled apartment, recently vacated by her grandmother, on Central Park South. When Rubinstein took possession of it, her rent was $93.08 a month — the same price that her grandmother had been paying since 1967.

Several months later, Rubinstein came home one evening to find an eviction notice on her door.

The building’s new owner, Donald Trump, wanted her out.

Trump’s plan was to knock down the building and the one next door, which he also owned, and replace them with a luxury high-rise condominium complex facing Central Park.

What he got instead was a New York brawl with a group of tenants fighting to save their homes and clinging to some of the city’s legendary rent deals. The battle played out for years in courtrooms and the New York news media, becoming a kind of parable of the limits of 1980s capitalist ambition in the social democratic city.

Looking back on the fight, on the eve of Tuesday’s New York Republican primary, one can see Trump waging a much different sort of campaign, but with many of the same tactics — the threats, the theatrics, the penchant for hyperbole — that he has deployed in his quest for the Republican presidential nomination.

As far as the tenants are concerned, Trump lost that contest.

“Oh, absolutely, we won,” said Rubinstein, sitting in the one-bedroom apartment where she still lives. “He wanted this whole corner to be one big Trump building.”

But Trump refuses to admit defeat.

“A great deal,” he said, without hesitation, when describing 100 Central Park South — now known as Trump Parc East — during a phone interview last week. “It was a long battle, but it was a successful battle. As usual, I came out on top.”

Trump paid $13 million for 100 Central Park South and the building adjoining it, the Barbizon Plaza Hotel, in 1981. At the time, he was 35 and making bold strides to emerge from his father’s shadow. In recent years, he had built the 68-story Trump Tower and completely overhauled the building near Grand Central Terminal that became the Grand Hyatt New York.

This would be a no less audacious project, and on one of the city’s most desirable blocks.

To realize his dream, he had to first clear out the residents of the building, a 15-story tower with 80 apartments, some overlooking Central Park, nearly all inhabited by tenants paying well below market rates.

Rent-controlled and rent-stabilized apartments occupy a kind of mythic place in New York City history. Rent protections were created to guard families from the whims of landlords and the market; they still cover about 1 million apartments in the city. State laws limit their rent increases and guarantee tenants, and often their children and grandchildren, the right to stay.

But in expensive neighborhoods, the deals can become skewed. At 100 Central Park South, for instance, there were three-room apartments overlooking the park with rents as low as $436 per month.

Trump wanted all of the tenants out. But rather than buying them out, a common tactic, he and the management company he hired tried to get the job done free.

So the battle began, captured in numerous lawsuits, court documents and news media accounts from that time. Leaks went unfixed, tenants alleged, and broken appliances went unrepaired. Aluminum foil was placed over windows in empty apartments, giving the building a run-down appearance. (Trump defended the action as standard procedure for vacant units.)

More dramatic were the eviction notices from Trump’s lawyers, on a variety of grounds. One tenant was told that he had not paid his rent on time. (He presented a canceled check in court to prove that he had.)

Others who had done construction on their apartments, with the approval of prior landlords, were told that they had 10 days to restore them to their original conditions.

Suzanne Blackmer, a B-movie actress and one of the original Rockettes, was ordered to vacate her two-bedroom unit, for which she paid $203.59 a month, because it was not her primary residence, meaning she was not entitled to rent protections. Blackmer insisted that it was; after a legal battle that lasted more than a decade, she prevailed.

Trump made his opponents out to be millionaire plutocrats, “people of great wealth.”

And also whiners.

“Let me tell you something about the rich,” he said in one interview in the midst of the battle. “They have a very low threshold for pain.”

Recounting the story later in his memoir “The Art of the Deal,” Trump acknowledged that he had deliberately tried to drive out tenants, but he said that most of them were exploiting an undeserved government subsidy. He recalled getting rid of a free telephone in the building’s lobby that he claimed tenants were using “to call their friends in Gstaad and St. Moritz.”

Rubinstein and two other residents from the time said they remembered only a pay phone in the building. And while its roll of renters included a successful fashion designer and an architect, it also included a number of older people living on fixed incomes.

As Trump’s frustration with the tenants grew, he offered the building’s dozen or so empty units as shelters for the homeless, promising free apartments with “beautiful views.”

The city declined, questioning the wisdom of moving people into a building headed for demolition.

“I actually thought it was a very generous offer,” Trump said last week. “I don’t want to see people out on the streets.”

The tenants eventually hired a lawyer, David Rozenholc, to represent them. Now a familiar nemesis to New York City developers — last year, he negotiated a $25 million total payout for three clients whom Tishman Speyer was trying to eject from a small apartment building in Hudson Yards — Rozenholc took advantage of a legal flaw in Trump’s plans to block his application to begin construction.

Rozenholc also sued Trump, accusing him of harassing his clients. The lawsuit claimed, among other things, that the building’s superintendent had been instructed by the management to spy on tenants.

Trump brought his own action against Rozenholc, a federal racketeering suit that sought $105 million in damages and found its way to The New York Post before it was filed.

Rozenholc said the suit, which was dismissed, was entirely frivolous. But he offered some words for Trump that were relatively kind, given the men’s contentious history.

“He knows how to negotiate, he knows how to use leverage and he’s very perceptive about his opponent’s vulnerabilities,” Rozenholc said. “It didn’t work against me, but when you deal with Putin and Iran, these could be useful qualities.”

The tenants were waging their own campaign in the news media, casting Trump as a slumlord and a bully.

In 1986, after five years of fighting, Trump abandoned his plans to knock down the building. The tenants could stay in their apartments, paying their existing rents.

Trump would never realize his vision for the project. But in a sense, his defeat had been a victory, as he claimed. Even as the tenants were refusing to budge, preventing any demolition or construction, the value of the property was soaring along with the rest of New York City’s real estate market in the 1980s.

In the late 1990s, Trump finally converted the building into condominiums, but renters were allowed to remain. Today, some continue to rent one-bedroom units for under $1,000 a month, less than a third of what similar apartments cost.

Rubinstein, who was guaranteed below-market rent for life, chose instead to buy at a steep discount, paying just $150,000 for an apartment that is now worth at least $700,000. She is also a member of the condo board, along with one of her more noteworthy neighbors, who lives on the building’s 13th floor: Trump’s son Eric.