Trump on the Ocean: An Analysis

Finally, the semester is over, below is an analysis I had to complete for a course of mine this spring. Sources are not embedded they are simply listed under a works cited heading towards the end. Anyways expect this blog to get back to regular schedule rather soon.

To transform into the epitome of corporate commercialization or to preserve the characteristics of a beach community recognized across the nation? This was the problem presented to Nassau County and New York State when the restaurant/catering hall now know as Trump on the Ocean was first introduced. Below I will attempt to accurately trace the history and development of this complex problem. I will first highlight the historical development of the catering hall and restaurant complex including the governmental proceedings that took place for this complex to be built. Next I will examine the two dilemmas the state faced in approving construction as well as the interest groups involved. Lastly I will seek to summarize all government involvement within this process and offer my own opinions on what I believe were the right actions to take.

The Trump on the Ocean website elegantly displays the words “coming soon” underneath its nameplate and cascading ocean waves (http://www.trumpontheocean.net) however, “soon” certainly took a long time to arrive. The state began searching for bids on construction in January of 2004. The New York State Park Commissioner at the time was Bernadette Castro. According to a recent Newsday article her tenure was primarily marked by efforts to attract private investment in hopes of making state parks a little less dreary (Moore, Newsday). To help aid in the implementation of this philosophy Castro’s office composed 298 solicitation letters in order to create interest (Moore, Newsday). Despite the offices great efforts, those 298 solicitations netted only 2 proposals come March: one from the Riese Organization and the other from caterer Steve Carl (Moore, Newsday).

After the Riese Organization dropped out of the bidding (due to them losing another unrelated bid within the same state park) the Jones Beach project was basically handed to Steve Carl (Vitello, The New York Times). Carl had already established himself as quite the caterer prior to him obtaining the bid. He is responsible for Carlyle on the Green, Bethpage State Park’s clubhouse which grossed ten million dollars last year (Moore, Newsday). His original proposal to the state named Carlyle on the Ocean called for a building that at 98,000 square feet was five times as large as the original structure (that had been damaged in the 1960’s, vacated, and subsequently demolished in 2004) as well as three times as tall. At around the same time the State Park was being placed on the National Register of Historic Places, so needless to say a plan that would drastically change the physical make up of Jones Beach was not looked highly upon by the state’s historic preservation staff (Moore, Newsday). Both New York State and Steve Carl then seemed to compromise on a layout the included a basement and one floor in which the state, although they had final control over the layout of the structure were satisfied with as of the spring of 2007 (Moore, Newsday). However things changed very quickly as soon as Carl announced a new partner in his Jones Beach plans.

“I needed somebody that would understand the striving for quality that I stand for,” Steve Carl said when he introduced Mr. Donald Trump as his aforementioned new partner (Moore, Newsday). The principal idea was that Carl would take care of the catering side of the business and Trump would serve as the piggy bank that would make this complex “the largest grossing-facility on Long Island” as Carl once termed it (Moore, Newsday). The well known Mr. Trump spent short time placing his stamp on the project. For instance on August 30^th he filed papers to change the official name of the joint venture to Trump Palace on the Ocean. The name was subsequently changed to Trump on the Ocean since the former name drew much criticism from the state including former parks commissioner Brunette Castro due to the large size the name implied. Also another change that has drawn criticism from state officials is Trump’s change of the building layout where his name is the predominate feature. State officials and groups such as the Society for the Preservation of Long Island Activities (SPLIA) say that it adds an aspect of commercialism which Jones Beach has never had. Furthermore, Trump has been sent back to the drawing board four times by the state due to his plans on the interior layout of the building. These reasons mainly included violations of building code as well as the fact that at one time only those willing to spend three hundred dollars a plate could see the beach’s main attraction: the ocean (Vitello, The New York Times). Trump is currently in litigation with the state about whether or not an expansive basement that would violate building code can be allowed. The trial has yet to be heard however as of April 29^th 2008 the judge scheduled to hear the dispute recused himself because of his ties to certain state legislators (Tyrrell, Newsday).

Despite the aforementioned pitfalls the addition of Trump to the Jones Beach project has greatly enhanced the wealth that can be derived from the catering hall/ restaurant by New York State. For instance Carlyle on the Ocean was only expected to make $828 million over its 40 year lease period while Trump on the Ocean will expect to make $1.5 billion over that same time (Moore, Newsday). The State will subsequently make $74 million over that same 40 year period. Trump also was able to obtain arguably the most lucrative lease agreement ever. Trump on the Ocean will only have to pay roughly $200,000 which is approximately less than 1% of the revenue the complex expects to take in. In years 4 through 6 of operation they will pay base rent as well as 2% of sales to the State. Then for the remaining time left in the initial 25 years of the lease Trump on the Ocean will pay about 4.7% of all sales (Moore, Newsday). This type of contract is certainly unique since special legislation was needed in order for its length of time to be approved. Furthermore corporations that lease out of state parks generally pay around 10% of their sales which is a figure Trump on the Ocean never comes close to reaching. Also Trump on the Ocean can use its lease with the state as collateral to borrow unlimited amounts of money in order to cover construction, and operating expenses.

As of now the foundation has already been set both figuratively and literally for the Trump on the Ocean complex however much resistance to these plans still exist. As I hope I have already displayed some of the particulars of this case involve putting into question the nationally renowned status of one of New York States finest State Parks as well as the necessity of such a generous contract. Below I will discuss and examine these problems and when possible seek a resolution that would benefit both parties involved.

As mentioned before the addition of Trump on the Ocean will vastly change the physical dynamic to Jones Beach which was just recently reward by being placed on the National Register of Historic Places. One of the main detractors of Trump on the Ocean due to this reason is the Society for the Preservation of Long Island Activities (SPLIA). Founded in 1948 SPLIA simply states their mission as: “to preserve Long Island’s cultural heritage and historic environments” (http://www.splia.org/about.htm). The Director of this organization, Alexandra Parsons Wolfe, stated her reasons for disapproval in an op-ed piece for Newsday in which she states: “The design needs to yield to historic context. Its overall scale needs to come down and its design needs to relate to existing structures as through stylistic references, massing and materials” (Wolfe, Newsday). Furthermore SPLIA takes issue with the 7 ½ foot monuments that bear the Trump name leading to the complex as well as the eight wall posters that will advertise for the building along Robert Moses Highway. However the organizations grievances come at too late of a time according to current parks commissioner Carol Ash. The group did not attend a 2006 public meeting in which these details were discussed (Moore, Newsday). Nevertheless Wolfe and SPLIA remain adamant in their detractions.

Simply put this is a problem that can be easily dealt with if both parties are willing to concede to certain facts. Trump must realize that Jones Beach is a National Historic Place and drop the abrasive tone that he is most famous for. For instance at one point during negotiations he called Nassau County Tax Assessor Harvey Levinson a “loser” (Kilgannon, The New York Times). Obviously for Trump to peacefully work with the state and all other members involved he must treat everyone as equals. As for SPLIA they must understand that for business to grow, as it must be able to especially considering the near drastic state of the economy, advertising must occur that promotes business. Usually in the business world the commodity with the biggest, brightest and flashiest signs wins business. The large signs and monuments being put into place by Trump are only efforts to promote interest in creating business.

A potential compromise between these two interests would include a downsizing of either the Trump logo on the building, the building itself, or the amount of monument and billboard advertising. SPLIA can not have free rein over all of these items since Trump should have the liberty to advertise for his business as much as he plans, since only through ample advertising will this joint venture succeed. Personally if I was representing SPLIA I would beg and plead a local legislator (since the legislature is the only body that has authority to circumvent these problems now) to get rid of the monuments since they are the most permanent structure that is not a part of the building. I would not ask that the building be downsized. The building needs to be certain dimensions in order to gross certain amounts of net profit for both Trump and New York State. By limiting its size you limit its potential economic yield. As for the wall posters, these can easily be taken down once the complex has become well known for unlike monuments these are not permanent structures.

As for the other problem that is presented by the more than generous leasing agreement; many government officials are split on whether or not they acted properly by handing out such an offer. For instance current Nassau County Tax Assessor Harvey Levinson termed the generous offer given to Trump a “raping of the beach” (Kilgannon, The New York Times). He then went on to say that “a place that offers $250-a-plate events does not serve the public purpose” (Kilgannon, The New York Times). Levinson does not understand how Trump on the Ocean can cater to the middle class citizen who lives on Long Island. Park officials justify the lower lease payments for Trump on the Ocean by “noting the high cost to build and run” as well as “the lack on any guarantee on its revenues” (Moore, Newsday). Also the state justifies the fact that Trump on the Ocean can borrow without a limit from the state by citing that Donald Trump and Steve Carl must commit $11 million of their own funds (Moore, Newsday).

Quite simply the state is economically tied to the success or failure of this operation. If Trump in the Ocean succeeds than the State will be at least $74 million dollars richer after forty years, however, if Trump on the Ocean becomes an abysmal failure New York State will feel the repercussions of such a failure for a long time. Since Trump and Carl can borrow as much as they see fit a bankrupt Trump on the Ocean may potentially (in the worse case scenario) equate to a bankrupt New York. Since no changes can be made to the contract that the state has signed it is hard to remedy this potential problem. I believe that New York State has handicapped itself into a terrible position and while the prospects for failure do seem little in number that does not mean that it can not happen. As we have said in class many times hubris is often the downfall of many a great men.

The ways that New York State government has been a part of this process is quite evident. The local government of Nassau County was a primary agency involved within this matter. For instance the legislature along with County Executive Thomas Suozzi passed the legislation that made the 40 year contract lease possible. Also as mentioned the Office of Parks, Recreation and Historic Preservation which is part of the Governors Office has had a large hand in constructing and developing Trump on the Ocean. For instance, former Parks Commissioner called the Steve Carl bid on the Jones Beach property “A gift from God” (Moore, Newsday) as well as approve the initial architectural rendering of the building. The Department of Environmental Conservation also had to approve the building. The New York State judiciary has had a say and will continue to have a say in the development of this property for as mentioned a trial about the building code of the complex’s basement is currently scheduled to occur in the upcoming week.

Overall the dilemma created by Trump on the Ocean is one that asks the question whether economic development is plausible when the building grounds in question could upset the surrounding atmosphere. After a thro consideration of all the factors involved within this case I would have to agree with reservation in favor of the creation of such a large complex. It pains to say this since the parking lot to Trump on the Ocean would erase a significant portion of the pitch and putt course I normally frequent (Vitello, The New York Times). However if New York State can make $74 million over forty years by me sacrificing the distance of my favorite back nine I can only support the measure. Perhaps I would not be as forgiving if the economy was not in such a dire condition. All things being considered I believe that anything that could help the economy now is a good thing no matter what trivial evils they may cause.

As for the problem that SPLIA sees in Trump on the Ocean I share some of their concerns. For one I believe that one of the great things about Jones Beach is that citizens can get away from the commercialized aspects of suburbia and go for a walk or fishing or simply lie in the sun without begin bombarded by advertisements. However I do believe that SPLIA is blowing things out of proportion a little bit. Compromises have been made that make Trump on the Ocean not as much as an eyesore as it once was. For instance, the large Trump nameplate that once was going to appear on the building has shrunk exponentially in size. Also the structure may be twenty plus feet tall however this is not nearly as large as the light house structure that is the central monument and most recognized feature of the beach. I believe that with added shrubbery, Trump on the Ocean will not stick out as much as SPLIA fears. The one concern I do share with SPLIA are the monuments bearing the Trump name. These monuments are spread across a distance and are made to stick out and attract attention which would be okay if only they were not permanent structures.

My most pressing concern is that of the special deal that Trump and Carl have received to build this complex. As I have mentioned before the State seems tied to the success or failure of Trump on the Ocean which should have never occurred. However I personally believe that something ultimately cataclysmic would have to occur for Trump on the Ocean to fail. Being located on Jones Beach, Trump on the Ocean is at a prime location to attract the affluent East Enders from the Hamptons as well as the multitude of Park Avenue patrons from New York City. I believe that a sufficient compromise has been made between the State and Trump that would allow median income families to dine at the restaurant and still have a prized view of the Atlantic Ocean. Hence Trump on the Ocean would not just be catering to the rich upper class. However, I do believe New York State should have gotten a little greedier on the revenue it will take from Trump on the Ocean. This prime real estate should not have come at bargain price because only one bid was placed on it. I think that New York State should have worked out a similar deal that it has with other properties on parks.

In conclusion, I believe that this will ultimately be a great deal for New York State as long as some compromises continue to be made. Working with New York State certainly complicates matters quite a bit. For instance Trump on the Ocean has survived three changes in governor and two changes in Parks Commissioner which could make communication between the business interests and governmental interests difficult and confusing. All things considered, I believe that New York State has found itself a great deal but could have found itself a better one.

Works Cited

Kilgannon, Corey. “Trump Irate Over Rules for Restaurant on Ocean.” The New York Times 6 Dec. 2007. 7 May 2008 <Trump Irate Over Rules for Restaurant on Ocean>

.Moore, Elizabeth. “State gives Trump a day at the beach.” Newsday 22 Apr. 2008. 7 May 2008 <http://www.newsday.com/business/ny-bztrum0422,0,6987990.story?track=mostemailedlink>.

SPLIA. SPLIA. 7 May 2008 <http://www.splia.org/about.htm>.

Trump on the Ocean. Trump on the Ocean. 7 May 2008 <http://www.trumpontheocean.net/>.

Tyrrell, Joie. “Judge recuses himself from Trump Jones Beach case.” Newsday 29 Apr. 2008. 7 May 2008 <http://www.newsday.com/news/local/ny-litrum0430,0,175743.story>.

Vitello, Paul. “Trump Vows Fight After Board Rejects Expansion of Jones Beach Plan.” The New York Times 6 Mar. 2008. 7 May 2008 <http://www.nytimes.com/2008/03/06/nyregion/06trump.html?scp=2&sq=trump+on+the+ocean&st=nyt>.

Wolfe, Alexandra P. “Don’t Mess with Moses.” Editorial. Newsday 20 Apr. 2008. 7 May 2008 <http://www.newsday.com/news/opinion/ny-opwol5655736apr20,0,102298.story>