The Real Deal New York

What Trump’s lawsuits say about how he’d govern: Trump v. Tenants

Part II of TRD's dive into the GOP front runner's legal history

April 28, 2016 07:30AM
By Will Parker

donald-trump-illustrationFrom the April issue: Donald Trump is on the verge of claiming the Republican nomination for President of the United States.

In this month’s issue, The Real Deal took a deep dive into Trump’s litigation history, focusing mostly on Manhattan real estate. We reviewed hundreds of cases filed in Manhattan courts between the early 1980s and last month that involved Trump or one of his business entities. The suits also offer a window into his temperament — beyond the campaign bluster — and into how he would conduct himself as the leader of the free world.

Below is the second web installment of a story that looks at decades of Trump’s legal battles and how he handled each one.

Trump v. Tenants
Discrimination accusations

Trump’s first major foray into the legal system traces back to the early 1970s, when his father’s company, then called Trump Management, was accused of racial discrimination at rental buildings, mostly in Brooklyn and Queens. The U.S. Department of Justice spoke to witnesses who claimed that the Trumps used racial codes on rental applications to flag (and reject) minority applicants. For example, “Colored” was marked with a “C,” one witness charged.

The Trumps did not take these accusations lying down. They sued the federal government for $100 million in damages. They settled the DOJ suit two years later in 1975, reaching an agreement with the Feds on how Trump Management would change its business practices.

As part of the agreement, Trump Management promised to adhere to a set of anti-discriminatory procedures and to provide the Urban League, the civil rights organization, with lists of rental vacancies on a regular basis.

But Trump later touted the settlement as a win.

“In the end, the government couldn’t prove its case, and we ended up making a minor settlement without admitting any guilt,” Trump later wrote in the “The Art of the Deal.”

If Trump wins the presidential election he will, of course, appoint the next U.S. attorney general, who heads the very Department of Justice that went after him all of those years ago.

And it could be said that the first case filed by the DOJ set Trump on course to tap the courts.

He later flipped the tables and took on tenants in Manhattan.

Making foes in Manhattan

When Trump left the outer boroughs for good in the late 1970s, he butted heads with tenants at some of his ambitious Manhattan development projects.

Around the same time he was suing the city over 421a, he had another major project planned on Central Park South. He had just purchased two buildings — the 15-story rental building 100 Central Park South and the neighboring Barbizon Hotel — that he was planning to demolish to pave the way for one giant condo tower. The former of those buildings, however, was inconveniently full of rent-stabilized and rent-controlled tenants.

“No one has ever been successful at vacating a building in a super location like this,” Trump was quoted saying. “I’ll be the first.”

To empty the building, Trump filed a string of lawsuits against stubborn tenants, many of which were quickly dismissed. He also made a well-publicized attempt to move homeless New Yorkers into the building to push the building’s remaining tenants to leave. In 1984, a group of residents fired back and sued Trump for harassment.

Trump’s response? He sued the tenants’ lawyers — who were led by high-profile tenant attorney David Rozenholc — claiming they had violated the Racketeer Influenced and Corrupt Organizations Act, aka RICO, by helping tenants bring harassment charges against him. In the suit, Trump sought an astonishing $105 million. But in early 1986, the complaint was dismissed.
Rozenholc said that he had never seen such a suit — and hasn’t seen one like it since.

“It was not run of the mill. Not every developer sues attorneys representing the other side, or brings a RICO action in federal court for $105 million,” he said.

Having litigated his way to a stalemate, Trump finally struck an agreement with tenants: He wouldn’t evict them, he wouldn’t demolish the building, and he would only renovate units as they became naturally available. Trump, not surprisingly, attempted to quash any whiff of concession.

“They haven’t really won,” Trump spokesman Thomas Macari said at the time.
“They’ve lost because they wanted to buy their apartments.”

More than a decade later, some of the building’s tenants would finally get that chance: 100 Central Park South became Trump Parc East Condominium, with longtime residents getting first dibs on buying their homes at discounted prices.

And by then, the once-incensed John C. Moore, who had led the residents’ group years earlier, had changed his tune altogether. “Donald Trump has acted like a gentleman for a long time now,” he told the New York Times in 1998.

Trump has also gone up against commercial tenants.

In 2005, luxury restaurant operator Cipriani sued Trump over un-refunded payments when its bid to buy the commercial condo at the Trump Park Avenue fell through. Years of conflicts with the Food Emporium at Trump Palace ended in multiple settlements; the most unique among them required the grocery store to do a twice-annual brass polishing.

Kyna Doles contributed research to this story.

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