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TR U M P STR A TEGI ES FO R R E A L ESTA TE

given the prime location they believed they could get a high price and
move their offices into better space nearer the business hub of New
York City. The zoning ordinance affecting the site limited the size of
any new building on the property to a 10:1 ratio: Any new structure
could be no bigger than 10 times the square-footage of the land. Since
the land area was approximately 37,000 square feet this would have
limited Trump to constructing a 370,000 square foot building on the
site. Trump knew that the property was very expensive but it was an
entire block from 47th Street to 48th Street with an unparalleled view
of the United Nations headquarters and the East River. He felt he had
to build something extraordinary that would justify the high price of
the land and take advantage of the sight lines of the property. Fortu-
itously, the existing zoning covering the property permitted the trans-
fer of unused “air rights” from one parcel of land to a contiguous
parcel on the same block. When the city wrote its zoning law, it
wanted to limit the amount of bulk on a particular block but not nec-
essarily building height. It didn’t care if the bulk was in one building or
20 buildings. In other words, if a building on Parcel A was 10,000
square feet but the zoning permitted a 30,000-square-foot building,
the owner of Parcel A could sell the excess 20,000 square feet of
building coverage (“air rights”) to the owner of Parcel B. In fact, the
building department liked the idea of the bulk being in one structure
because it gave you more light and air everywhere else in the neigh-
borhood. Since there was little likelihood that the owner of the un-
used air rights would ever use them, their sale to an adjoining owner
who wanted them could fetch a price far in excess of their worth to
the owner who had them.
After making preliminary evaluations, Trump, “thinking big” as he
typically does, decided to build a huge luxury condominium tower
using air rights from adjoining underbuilt properties. No other devel-
oper recognized this possibility, and it was the key to Trump turning
this “ordinary” property into something extraordinary. But the process

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