Politics

A lesson from the flamboyant American Billionaire Trump to parents: The art of treating your children equally pays

Donald Trump Intends for All Three Children to Help Run His Empire

All of Donald Trump's grown children attended last week's unveiling of the Trump Organization's $200 million plan to convert the Old Post Office Pavilion in Washington, D.C., into a luxury hotel. But his daughter Ivanka was the only one who spoke, introducing the design team and thanking the local elected officials who helped make it possible.
After Mr. Trump rose to the podium, he turned to his daughter, pointed at her, and smiled mischievously. "Ivanka, congrats to you and your team," he said, before invoking his reality-TV show's famous tag line: "And you better do a good job, or you're fired!"
Ms. Trump pretended to look aghast. "He's not kidding!" she said in a stage whisper.
Actually he was. It is scenes like these that have many in the real-estate industry thinking that the heir apparent in the Trump dynasty is Ms. Trump—and not her brothers Donald Trump Jr., 35 years old, and Eric, 29. In the past few years, Ms. Trump, 31, has taken more of a lead role than Eric or Donald Jr. in many of their father's most high-profile U.S. deals.
Besides being in charge of the Post Office project, Ms. Trump was lead negotiator on the $150 million acquisition of the Doral golf resort in Miami, according to people involved in the deal. And when Mr. Trump paid $48 million to a group of junior creditors led by Fortress Investment Group to buy out their debt on the 92-story Trump International Hotel and Tower in Chicago, it was Ms. Trump who negotiated the terms of the deal up to the very end, when Mr. Trump approved the price.
To be sure, at this point, no clear-cut succession plan appears to have been finalized. Donald Trump, 67, shows no sign of slowing down.
More important, both he and his children said in interviews that he wants the empire to be run by the three of them. Mr. Trump pointed out that each of the children has developed an expertise in different parts of the real-estate business. (Mr. Trump has two other children, Tiffany and Barron, from his second and third marriages, who are too young to be involved in the family real-estate business.)
"Eric is very much focused on construction. He loves it. Don is very good at leasing, selling. He has a knack for leasing," Mr. Trump said in an interview.
Donald Jr. was involved in negotiating project financing for Trump projects in Las Vegas and Chicago and more recently has taken the reins on hotel projects in Vancouver and Hawaii. His brother Eric has taken the lead on projects in Panama and the Philippines, and has handled the acquisition of several golf course assets and a winery in Virginia.
"My kids are treated very equally. I think, and I hope, for their own sake, that they'll be able to get along…It's not a deal where there's going to be one person succeeding me," Donald Trump said.
Mr. Trump will be breaking new ground if he is planning to give his children equal power in making decisions in the Trump Organization over such critical matters as whether to buy or sell property or how to allocate capital. The real-estate families that have been most successful in passing power from one generation to the next have named one family member to lead the way, like Bill Rudin or Douglas Durst.
"In real estate it's usually one person," says William Zabel, a founding partner of the law firm Schulte Roth & Zabel, who has represented numerous real-estate families. "You have to give one of them the mantle and hope that it works."
Some families have run into such intense conflicts over succession that they have divided up assets rather than keeping the family business together. In one current battle, for example, the three daughters of the late real estate mogul Louis Feil are fighting their brother in court partly in an effort to liquidate part of their family's real estate empire. Even when transitions happen smoothly there can be resentment and hurt feelings. For children who get passed over "it's so fundamental and so painful," says Mr. Zabel. "You may be forever giving one or more an insecurity complex."
Mr. Trump clearly recognizes the succession question poses big challenges. "Succession is usually a disaster, whether it's because of jealousy or something else," said Mr. Trump.
Mr. Trump's father, the late Fred Trump, was one of the biggest developers of housing in Brooklyn and Queens. Mr. Trump, the second oldest son of five children, rose to the top of the family business partly because he and his father were like-minded. "I was drawn to business very early, and I was never intimidated by my father, the way most people were," he wrote in his book "Trump: Art of the Deal."
Today Mr. Trump shares a love of real estate with his daughter. Ms. Trump, 31, as a teenager worked as a fashion model and for a time her father thought she would chose that as a career.
But she chose business. "To be honest, I always envisioned Ivanka—because she's done phenomenally as a model," Mr. Trump said. "But one day she came to me and said, 'Daddy, I love real estate.' …From the time she was a little girl, she's been hearing me do real-estate deals."
In 2009, Ms. Trump converted to Judaism and married Jared Kushner, a real-estate developer and owner of the New York Observer newspaper. In 2011, the couple had their first child, a daughter. Their second child is due in the next few weeks.
For her part, Ms. Trump says she agrees with her brothers that the company ought to be run by all three of them when her father retires. "If we were looking at an acquisition and one of my siblings felt very strongly about not doing it, that would mean something very important to me," she said.
She also said it was too early talk about the specifics of how such a decision-making process would look. "Who knows?" Ms. Trump said. "From my perspective, that's all intellectual. The more important question, from my perspective, is, do we love what we're doing?"
If the Trump Organization is run by a triumvirate it will help that the three children are close. They all had the same mother—Mr. Trump's first wife, Ivana—and often vacation together with their young children. Each year in March, for example, the family goes skiing in Colorado.
"A family business is incredible when it works, and it's a disaster when it doesn't," says Donald Jr. "Our biggest obstacle will be to prevent any of that sort of infighting…While [Donald Sr.] is here, there's no democracy. But with the three of us, there will be."
For the Washington hotel project, which the Trumps plan to finance using their own equity, Ms. Trump has been the sole deal-maker and point-person, negotiating with dozens of government officials, financial partners, preservationists and designers to bring the project together.

Tags: Global