NEW YORK - He's back.
Bloodied but unbowed by his real estate empire's near-collapse, Donald Trump is courting his bankers once again.
This time the developer is talking up an ambitious pet project that didn't make it off the drawing board during the 1980s boom.
Some of his lenders privately dismissed the idea as mere bravado. They said it was highly unlikely that their banks would help the flamboyant developer finance a complex of apartments and television studios on Manhattan's West Side.
But Mr. Trump expressed confidence that over time, he would persuade them to sign up.
Kudos for Professionalism
In a telephone interview last week, Mr. Trump went out of his way to praise his bankers' "professionalism" during a tortuous two-year, $2 billion debt restructuring. "The banks worked with me, and I'm really proud of that," he said.
And he maintained that their patience has already paid off on two of his condominium projects - representing about 10% of his outstanding debt.
On one, the Trump Palace in New York, he expects a bank group led by Citicorp to be paid in full on a $200 million construction loan. At least 53% of the 283 units have been sold, more are in contract, and a retailer is expected to take space on the ground floor shortly, Mr. Trump said.
On the other, a condominium project in Palm Beach, Marine Midland Bank will receive most of the principal on a $27 million mortgage, he said. That project, which Mr. Trump acquired at a foreclosure sale just as the market went sour, is now sold out and under the management of the unit owners, according to the general manager of the complex.
At both condominiums, Mr. Trump credited the banks for their willingness to cooperate, rather than "wage warfare" and force construction and marketing to a half.
By being frank at the outset, Mr. Trump suggested, he was able to win that cooperation. "The banks have to have confidence and trust in you," he said.
But some bankers thought Mr. Trump was painting too rosy a picture.
"The residential side in New York and other places is far less damaged than office and hotel," said one of Mr. Trump's lenders, who did not want to be named. "I think the banks stepped up on the Palace because it was in their self-interest to do so."
Indeed, considering the losses his banks have taken on previous loans, the once-magic Trump name could be a hindrance in getting the new project off the ground.
"As far as I'm concerned it would be very difficult for Mr. Trump to obtain financing," said one banker who helped finance the purchase of the Plaza Hotel and wound up having to take an equity position when Mr. Trump could not meet the payments.
"First, the environment is still very difficult. Second, we do not think Mr. Trump has deep pockets. Third some of us working for the bank" are "not comfortable" about the prospect of repeating the experience with Trump.
Another lender added that he "was not terribly impressed" with how Mr. Trump handled the restructuring of the Plaza credit, including public comments he made about plans that did not materialize.
For his part, Mr. Trump acknowledged that all of his projects obviously had not worked out as smoothly as the condominiums. Besides the Plaza Hotel restructuring, he also had to cut partnership deals and pay down other debt to sidestep foreclosures and bankruptcy on other projects.
But he said his progress, coming while the once towering Olympia & York Developments Ltd. struggles to get a workout off the ground, is a testament to the quality of his projects.
"Canary Wharf is 30 years in the future," he said, more than tripling the consensus estimate on how long it will be before O&Y's big multiuse project in London will succeed. "Our developments are sound - visionary, but very sound," he said.
Waiting for Change in the Wind
Mr. Trump expressed confidence that lenders would step up with financing for the new West Side project, which would not be formally sought before next year. "It's going to be a while before we ask," he said. "Maybe things will change."
The 75-acre development, called Riverside South, would be built over an abandoned rail yard and include 16 apartment buildings with nearly 4,000 apartments, a two-block-wide film or television studio, and a riverfront park.
The project is modest compared with earlier proposals that included plans for the world's tallest building.
But last month it passed a key hurdle when the application was certified by the City Planning Commission - an accomplishment none of the earlier efforts achieved.
Mr. Trump hopes to receive zoning approvals by yearend.
A key to gaining financing for the project is building on the goodwill created by the successful condominium workouts in New York and Florida.
Both Mr. Trump and bankers gave credit for those workouts to Louise Sunshine, president of the Sunshine Group, a brokerage and consultant that acted as a go-between among bankers, developers, and buyers.
Ms. Sunshine said her firm is often "in the middle position - ostensibly working for the sponsors but really working for the banks."
Ms. Sunshine, who was employed at the Trump Organization from 1975 through 1985, and now calls Mr. Trump her mentor, said that after a period of anger the banks are getting down to the business of working out their problems. Recently, they are "willing to give us the tools that enable us to be successful."
The Trump Palace was "a building in a great deal of trouble, to say the least," when she first arrived on the scene as a consultant in October 1990, Ms. Sunshine said.
The building was opening amid the publicity surrounding Mr. Trump's restructuring and at a time when the residential market was in collapse.
But Ms. Sunshine, who describes herself as "a very determined lady," was able to convince Citicorp to provide a $10 million guarantee of common charges and taxes in order to reassure buyers that the project was financially stable.
She also helped convince members of a 19-bank group to accept 20%-30% discounts from the original price targets,
Ms. Sunshine acknowledged that financing will be a major obstacle for Mr. Trump's new project, but said he isn't the only developer who will face reluctant bankers, tougher loan criteria, and bigger fees.