In 1989 young accountant Donald C. Wood went to work for Donald Trump as the magnate built the Trump Taj Mahal hotel and casino in Atlantic City.
Things did not go as planned. Wood lasted only a year at the company and the project, piled with debt, quickly went into bankruptcy. (It closed for good last month.)
More than two decades later, Wood now heads a $10 billion shopping center firm and is among top developers guessing what his former boss might do to spark a building boom after a campaign in which the president-elect took sometimes conflicting positions on taxes, spending and infrastructure.
“I don’t think there’s ever been a more unpredictable person in that spot,” said Wood, president and chief executive of Federal Realty Investment Trust, the Rockville-based owner of 96 U.S. properties. “But because he has not been a politician before in any way, I kind of think a lot of people are banking on things that were said during the campaign and – I don’t want to say that’s all out the window – but that’s got to be put through the prism of practicality. And I do think Donald from what I remember is a very practical person. And I think that’s a huge positive.”
Though George Washington and Thomas Jefferson worked as land surveyors before entering office, Trump is the first real estate developer to be elected.
It’s a job that frequently involves keeping one eye on economic variables — job growth, interest rates, consumer spending, real estate values — and another on opportunities to buy into deals that Trump considers himself such a maestro at negotiating, even if financial anaylsts say he frequently exaggerates their worth.
In his acceptance speech Nov. 9, he sounded the part of Developer in Chief, someone who knows how to make something out of nothing and could pick up a tidy profit (for America) in the process.
“I’ve spent my entire life in business looking at the untapped potential in projects and people all over the world. That is now what I want to do for our country,” he said. “We are going to fix our inner citites and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We are going to rebuild our infrastructure. Which will become by the way, second to none. And we will put millions of people to work as we rebuild it.”
As with other Trump proposals, the pledges so far have come with few specifics, which has his cohorts in commercial real estate guessing at what kind of an interest he will take in generating growth in the industry he knows best.
Many of Trump’s most prominent real estate projects, frequently touted in the campaign, relied on the mingling of public works with private investment dollars, among them the Grand Hyatt Hotel at Grand Central Terminal, a Central Park ice rink and the Old Post Office pavilion in Washington, where he opened a $212 million hotel this fall.
Trump pursued other such deals during his career that didn’t pan out. In the 1970s, he pushed to get the District of Columbia government to help him build a convention center and 20 years later he tried to take control of the Empire State Building.
“I do believe that the brightest thing to come out of yesterday was having a practical businessperson who does believe that the creation of jobs and a healthy economy is the most important thing,” Wood said.
As a candidate, Trump vowed to both cut taxes and make investments in infrastructure. New spending on roads, bridges and public transit has been a priority for elected leaders in both parties recently, including many mayors.
Washington Mayor Muriel Bowser, a Democrat, said Nov. 10 that she “perked up” while watching Trump’s acceptance speech at his mention of infrastructure spending and hoped that D.C. and the Trump administration might cooperate on addressing the city’s dated bridges and underfunded Metro system.
“There wasn’t a whole lot of substantive or policy messages in his statement last night but infrastructure was one of them and rebuilding American infrastructure is certainly important,” she said.
Nela Richardson, chief economist at the housing data firm Redfin, surmised that Trump might see opportunity in goosing a housing supply that she said was chronically low in many metropolitan areas, a move that could create jobs and cut into a record-low home ownership rate.
“Trump is a real estate developer and could see an opportunity there,” she said.
Others questioned whether Trump would invest in urban centers after so much of his support came from rural and suburban areas. The Republican Party’s convention platform championed highway spending and claimed the Obama administration “subordinates civil engineering to social engineering as it pursues an exclusively urban vision of dense housing and government transit.”
Raymond Ritchey, senior executive vice president at Boston Properties, a $20 billion developer, said he was “aghast” at Trump’s victory but that Republican control of the White House and both chambers of Congress could accelerate spending on the party’s priorities.
“I don’t think you’re going to see additional funding for Metro,” Ritchey said. “But if there is a dam to be built in Tennessee or a highway in Arizona or some sort of federal project in Wisconsin, I think you’ll see that get funded. It’s great for the economy in general.”
The Washington area often benefits directly from increased defense spending, something Ritchey considered possible despite Trump’s social media slogan #DrainTheSwamp.
Trump could also take an interest in the General Services Administration, which manages federal real estate (and leases the Old Post Office to his company). The GSA is scheduled to announce a plan for a new $2 billion FBI headquarters next spring, a project Trump and his daughter Ivanka once said they considered bidding on.
“He may be more personally interested in the FBI headquarters or something like that,” Ritchey said. “So I think GSA may have a more important role.”
Kevin Thorpe, chief economist at the real estate services firm Cushman & Wakefield, said the country “desperately needs” infrastructure spending and that if Congress went along with the new president the country could enjoy a near-term building boom.
“Will the establishment Republicans, and the Democrats, will they shift?. . .Or will we see more gridlock?” Thorpe said. “Based on Mr. Trump’s trajectory, he has a way of surprising and moving things forward.”