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Hong Kong Investors Finance a Trump Project

Hong Kong Investors Finance a Trump Project
Credit...The New York Times Archives
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July 1, 1994, Section B, Page 1Buy Reprints
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A group of Hong Kong investors stepped in yesterday with the money that Donald J. Trump needs to begin building the first towers of Riverside South, a project that could profoundly alter the Upper West Side of Manhattan by creating homes for thousands of wealthy residents on what is now an abandoned riverfront rail yard.

Construction could start within a year, Mr. Trump said yesterday after he signed a financing deal and joint-venture agreement with a consortium that includes the New World Development Company Ltd., headed by Y. T. Cheng and his son, Henry, and the Shui On Group Ltd., headed by Vincent Lo.

Now, we're at the really productive level," Mr. Trump said, 10 years after he took control of the 75-acre site along the Hudson River, from 59th to 72d Street.

The new "multi-billion-dollar joint venture" -- the partners would be no more specific about the amounts of money involved -- represents a high-profile plunge into the New York market by Hong Kong investors.

"We've traveled to various cities," said Daniel K. S. Yiu, president of Polylinks International Ltd. of Hong Kong, which advises private and public companies, including New World. "With all the potential, the people, the demographics, we really think that New York can't be substituted."

Their arrival is not only crucial for Mr. Trump, who has been struggling to emerge from millions of dollars of debt, but is also a "solid vote of confidence in New York City," Mayor Rudolph W. Giuliani said.

"Development of Riverside South will mean the creation of thousands of construction jobs at a time when that industry is at nearly 50 percent unemployment," Mr. Giuliani said in a statement released by his press office. "It will create thousands of permanent jobs and will brings hundreds of millions of dollars in sales and other tax revenues to the city."

Mr. Trump and his new partners said no final decision had been made on which parcels would be developed first, or how many. For now, they said, they are contemplating a mix of rental buildings and one condominium tower for the opening phase.

Under plans approved by city officials in 1992, there may ultimately be 5,700 apartments in 16 towers. At least 12 percent of the housing must be set aside for moderate- and low-income residents. There would be 1.8 million square feet of commercial space at the southern end of the site. A waterfront park would be built in phases, along with construction of the towers.

"We have no intention whatsoever of changing the original plans," Mr. Yiu said.

Money Talks, but Quietly

The developers would not disclose anything about the amounts of money involved in yesterday's deal, citing a confidentiality agreement with the Chase Manhattan Bank, which holds the mortgage on the property. Mr. Trump would say only, "Essentially the mortgage has been purchased by this group, so we don't have any debt."

Mr. Yiu said the Polylinks group was formed a little over a year ago to look for investment opportunities in the United States, particularly in New York, San Francisco and Honolulu. New World bought the Renaissance hotel chain in 1989 and the Stouffer hotel chain last year.

"We put more of a focus on New York," Mr. Yiu said. He said Polylinks has already purchased large blocks of condominium apartments in Park Avenue Court, at Lexington Avenue and 86th Street, and the Horizon, at First Avenue and 37th Street.

Because of the size of Riverside South, Polylinks sought other investors as well, including Shui On, a diversified company involved in hotels, construction and development; the Edward Wong Group, and the Far Eastern Consortium Ltd., whose holdings include the Warwick Hotel, at Avenue of the Americas and 54th Street.

Frankie Y. L. Wong, a group managing director of Shui On, attended yesterday's signing, along with Mr. Yiu. Afterward, he said: "New York is coming out of the recession. So is the United States. We see a big potential for property development."

When asked what attracted Shui On to Riverside South, Mr. Wong simply pointed across the room to Mr. Trump. "You see him there," he said.

But Mr. Wong also said the sheer size of Riverside South made it unusual. "You don't find such large-scale projects easily in New York or in the United States," he said.

Until the arrival of the Hong Kong investors, it was not exactly clear how Mr. Trump would realize his $3 billion vision for the old Penn Yards site, given the debt he was carrying.

But yesterday, he said he was "just about finished" retiring that debt, crediting in part the income from his Atlantic City casinos and hotels, which he said "have broken every record" in the last two years.

For Riverside South, Mr. Trump and his partners may take advantage of the "80-20" mixed-income housing program. Tax-exempt bonds are available to finance projects in which 20 percent of the units are set aside for lower-income tenants, with the other 80 percent available at market rates.

Mr. Trump's original plan for the site was something far grander: Trump City, which was to have had 7,600 apartments, a regional shopping mall and the tallest building in the world.

This highly unpopular proposal was withdrawn in 1991, after Mr. Trump entered into an unusual alliance with several civic, neighborhood and environmental groups, including the Municipal Art Society and the Parks Council: the very people he had been battling over Trump City. Under the name Riverside South Planning Corporation, this alliance devised the new plan.

Although Riverside South was opposed by the local community board and the local Councilwoman, Ronnie M. Eldridge, it was approved by Borough President Ruth W. Messinger and the City Planning Commission. It passed the City Council in December 1992.

The executive director of the Parks Council, Linda Davidoff, said about yesterday's deal: "The financial wizardry involved is beyond my ken. But the net result -- that an investor is prepared to build -- is thrilling and a great step forward in building a new and marvelous waterfront on the West Side of Manhattan."

There are still many critics of the project. Among their concerns is that Riverside South would add to the already overtaxed North River Sewage Treatment Plant in Harlem. A group led by the Coalition for a Livable West Side has filed suit in Federal court seeking to prevent further hookups to the North River sewage treatment plant and another one on Wards Island.

Mr. Yiu said yesterday that the investors had reached "a certain comfort level that this issue can be resolved over time as the project moves along."

Mr. Wong added that "city officials have already done a lot to reduce the flow, so there is a lot of capacity."

A version of this article appears in print on  , Section B, Page 1 of the National edition with the headline: Hong Kong Investors Finance a Trump Project. Order Reprints | Today’s Paper | Subscribe

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