, ,

Chapter 9 – Wynn-Fall: The Battle for Hilton

“It’s not easy to make your own mark on a company your father founded and built into a huge success.  Some sons opt out altogether and don’t even try to compete.  Others are content to manage what their fathers have already built.  A few sons set out to outdo their fathers at the same game, and that may be the toughest thing of all, particularly when the father’s name is Conrad Hilton.”

“Hilton might have survived everything if Barron himself had taken the licensing hearings more seriously.  Instead he virtually ignored them.”

“There are times when you have to be aggressive, but there are also times when your best strategy is to lie back.”

“Conrad Hilton used his will to disenfranchise his children and grandchildren. … Conrad believed very strongly that inherited wealth destroys moral character and motivation.  I happen to agree that it often does.

I’m not saying I would also have won, but if I went down, it would have been kicking and screaming.  I would have closed the hotel and let it rot.  That’s just my makeup.  I fight when I feel I’m getting screwed, even if it’s costly and difficult and highly risky.

“He’s got a great act.  He’s a smooth talker, he’s perfectly manicured, and he’s invariably dressed to kill in $2,000 suits and $200 silk shirts.  The problem with Wynn is that he tries too hard to look perfect and a lot of people are put off by him.  Barron Hilton was one.”

“Steve Wynn underestimated how much he’d become anathema to Barron.  That’s where I came in.  One day after Wynn made his takeover bid, Barron Hilton became much more serious about negotiating with me.”

“John asked me a couple of questions and after two minutes he said, ‘We have a deal.’  Just like that.  It goes to show you the value of credibility.  In return, I did something I’d never done before: I personally guaranteed the loan.”

“It was a disgrace, I said.  It was immoral, it was wrong, it was dishonorable [to be delaying the closing of a done deal].  My tone was more hurt than outraged or angry.  I can be a screamer when I want to be, but in this case I felt screaming would only scare them off.”

I recognize that lawsuits are sometimes inevitable, and I accept that as a reality of business.  But when a person tell me he’s going to sit down with me, I expect him to honor that commitment.  If we still can’t resolve the situation, that’s another story.  From that day on I stopped defending Barron Hilton to anyone.

Chapter 10 – Low Rent, High Stakes: The Showdown on Central Park South

“Sometimes by losing a battle you find a new way to win the war.  What you need, generally, is enough time and a little luck.”

“I barely looked at what the two buildings were earning.  I was drawn to the real estate value, not the income.  I was buying a great location at a modest price, and the way I looked at the deal, there was virtually no downside.”

“Unfortunately, rent control is a disaster for all but the privileged minority who are protected by it.  As much as any other single factor, rent control is responsible for the desperate housing crisis that has plagued New York City for the past twenty years.”

Perhaps the worst thing about rent control is that it stopped protecting the people who needed it the most.  The best rent-controlled apartments have always been prized and difficult to come by, and people with power and money have always had an inside track on them.

“Unlike most developers, I don’t advocate eliminating rent control.  I just think there ought to be a means test for anyone living in a rent-controlled apartment.  People below a certain income would be permitted to keep their apartments at their current rent.  People with incomes above a certain sum would be given a choice between paying a proportionally higher rent for their apartments or moving somewhere else.”

If there’s one thing I’ve learned about the rich, it’s that they have a very low threshold for even the mildest discomfort.

“It was not one of my best experiences with the media, but it taught me something.  You don’t act on an impulse – even a charitable one – unless you’ve considered the downside.”

“What the tenants didn’t count on is that I’m not one of those landlords who roll over to avoid bad publicity or save a few bucks – particularly when I think the charges are unfair.  Fighting back might run up my legal bills and even make me rethink my strategy.  But the one thing I wasn’t about to do was allow myself to be blackmailed into a ridiculous settlement.

“I’ll ultimately earn a profit of more than $100 million on a deal that many people thought would turn out to be a total loser.  And it was largely because the tenants managed to delay me.”