NEW YORK — NEW YORK -- Donald Trump sold his half-interest in the Grand Hyatt Hotel in New York to the Pritzker family's Hyatt Corp. yesterday for $140 million, bringing to an end an often rancorous, 17-year partnership in a landmark property that marked the developer's rise to prominence.
Trump, who has wrestled with the Pritzkers over the management of the 32-story black glass hotel next to Grand Central Terminal, said he had some regrets about the sale.
"It's both a very happy and a very sad day," Trump said. "I am tTC selling an asset to which I gave birth. But not only did I make money over the years, I'm getting $140 million for a half-interest."
Hyatt Corp. and an affiliate now own 99 percent of the 1,407-room hotel, with the remainder owned by the Pritzker Family Philanthropic Fund. Hyatt officials in Chicago, who declined to confirm the sale price, said the deal reflected optimism in both the hotel and the New York market.
"We have a great deal of faith in the long-range viability of this project," said Alex Alexander, division vice president in New York for Hyatt Hotels and Resorts.
The deal also removes an obstacle to the hotel chain's growth in the New York market, according to Trump and hotel analysts familiar with the partnership. The Hyatt, which also manages the Park Hyatt Hotel at the United Nations, has been hobbled by a noncompete clause in the partnership agreement with Trump that prohibited the hotel chain from opening another property in New York City. Alexander said he expected the Hyatt to explore other opportunities in New York City.
But more than anything, the deal finally disentangles the very private Pritzker family from the very flamboyant Trump. He bought an option to buy the old Commodore Hotel in 1977 for $1 for his first project in Manhattan. With the help of extensive tax abatements, he and his new partner, the Pritzkers, spent $100 million converting the dowdy Commodore into the glitzy Grand Hyatt, a development that signaled the revival of New York after the fiscal crises of the 1970s.
But the two partners never really got along. Two arbitration proceedings failed to stem the bickering, and in 1993 Trump sued Jay Pritzker and the Hyatt Corp. The company countersued seven months later. The two sides managed to settle their dispute in 1995, with the Pritzkers agreeing to pay Trump's legal fees and to finance a $25 million renovation of the hotel. But the peace treaty was seen by many hotel analysts as a prelude to a sale.
"The transaction concludes what for a fair amount of time has been an acrimonious relationship between the parties," said John A. Fox, senior vice president of PKF Consulting, which specializes in the hotel industry. "I think this represents a substantial profit for Trump, but it finally gives Hyatt complete control of the property."
Pub Date: 10/08/96