Real estate developer Donald J. Trump said Monday that he will lease the biggest commercial space in the glittery Trump Tower to Galeries Lafayette, France's largest department store company, shoring up a key part of his financial empire.
The space was formerly rented to Bonwit Teller, the upscale retailer that was forced to close and sell its stores this spring because its parent company, L. J. Hooker Corp., was in bankruptcy.
Trump assumed the lease and had held extensive talks to rent the space to Galeries Lafayette, which plans an 80,000-square-foot luxury store focusing on French women's fashions and accessories.
The lease was a coup for Trump, who has been sitting on the empty space on Manhattan's Fifth Avenue while his real estate and casino empire tottered on the edge of bankruptcy.
"We took a little risk when we bought out the lease of Bonwit Teller, but it turned out to be a well-founded one," Trump said in his first news conference since his financial troubles surfaced last month.
Trump, looking subdued in a conservative dark suit, said little at the conference, which was crowded by throngs of local reporters as well as numerous foreign correspondents and television reporters.
Perhaps a hundred tourists looked out over the balconies into the garden level of the Trump Tower to catch a glimpse of the real estate magnate.
Trump reached a preliminary agreement with his bankers last month for $65 million in fresh loans needed to meet the interest payments on his massive debts that were threatening to bring down his empire.
The developer received $20 million of the loan immediately to make an overdue interest payment to bondholders and avoided default on the bonds, issued against one of his Atlantic City, N.J., casinos.
"This is very good news," said one banker close to the Trump talks, who asked not to be identified. "It reinforces the Trump Tower as a valuable piece of real estate."
Trump had nearly concluded a lease agreement with the French company before his financial troubles surfaced. The talks were then put on hold for about a month while the developer worked out his bank agreement, the banker said.
Asked whether he was concerned about Trump's finances, Galeries Lafayette Chairman Georges Meyer said: "We are a tenant. . . . If Mr. Trump decides to sell the Trump Tower we will still have a lease."
Trump quickly interjected: "It's highly unlikely that would happen."