Now, Mr. Trump, What About L.A.?
NOW THAT HE has conquered the real estate business in New York, it seems logical that Donald Trump might turn his sights on the next hottest market in the country--Los Angeles. But don’t bet on it.
“I’m really concerned with the whole earthquake situation in L.A.,” Trump says. “I am a tremendous believer that someday Las Vegas may be the West Coast.”
Is this another Trump business tactic? Is he trying to talk down real estate values in Southern California so that he can buy in cheaply? Unlikely. Trump insists that he has “seen some of the damage earthquakes can cause, and I must tell you it’s disconcerting.”
“People in general are having lingering doubts about the value of real estate in L.A.,” he adds. “It’s happening too much and too often, the tremors. It’s a very scary thing.
“Hey, I can’t tell you I’m completely staying out of (the L.A. market) because of that. But I have to admit it’s a lingering problem, and if a deal is a close call, I’ll probably stick with my instincts.”
One of those close calls was the Beverly Hills Hotel, which Trump bid on in 1986. He liked the property, but he wasn’t willing to pay the $136 million that oilman Marvin Davis finally offered. (Neither was Merv Griffin, apparently. Griffin denies published reports that he, too, made a bid for the hotel when Davis put it up for sale a year after buying it. Griffin says he signed a confidentiality agreement to inspect the hotel’s grounds and financial records but decided against making an offer. Last fall, the Sultan of Brunei bought the hotel from Davis.)
Trump has always been drawn to Hollywood. After graduating from New York Military Academy in 1964, he briefly considered attending USC’s film school. “I was attracted to the glamour of the movies, and I admired guys like Sam Goldwyn, Darryl Zanuck and most of all Louis B. Mayer,” he writes in his 1987 book, “Trump: The Art of the Deal.” “But in the end I decided real estate was a much better business.”
He still thinks so. “There are too many risks in the movie business,” Trump says in a recent interview, “whereas if I can get a piece of land on 5th Avenue and 57th Street for the right price, or even the wrong price, I know I can build a great building that is going to be accepted by all.”
Still, earlier this year, Trump bought about 375,000 shares of stock in entertainment giant MCA Inc. Then he said he just might gain substantial control of MCA by raising his stake to 24.9%. So far, he is mum about his intentions. One attraction of MCA for Trump, no doubt, are its real estate holdings in Universal City and Orlando, Fla.
Despite its unstable ground, Trump says he loves Los Angeles. “It’s a great city that, like New York, has a great energy,” he says. “I’ll be in L.A. more and more as time progresses, I suspect.”
But he does not buy the increasingly popular theory that power in America is shifting from New York to Los Angeles as the center of the world economy moves from Europe to the growing nations of Asia.
“I think there’s going to be a major political backlash (against Japan), and that’s going to stop this Pacific Basin theory,” says Trump, who briefly considered a run for President last year.
“There is going to be a tremendous backlash against what Japan is doing in this country--sucking the lifeblood out of it because of our stupid policies. Our policy is to have free trade, but Japan is not reciprocating. That we are defending Japan for nothing is just absurd; we are bringing oil to Japan through the Persian Gulf, using our men and their lives and our money, and Japan gives us nothing.”