the hotels. Conversion into Grand Hyatt The New York Central had experienced financial decline during the 1960s, merging with the Pennsylvania Railroad in 1968 to form the Penn Central Railroad. Penn Central continued to face financial issues and failed to make mortgage payments. By late 1970, the Commodore Hotel was facing foreclosure, as were several other buildings that Penn Central owned around Grand Central Terminal. After Penn Central went bankrupt that year, the company sought to sell its properties, including the land below the Commodore Hotel. The buildings were placed for auction in October 1971, but the proceedings were delayed for several years. Penn Central, which had placed all of Realty Hotels' properties for sale, subsequently withdrew its offer to sell the hotels. Both Penn Central and the Commodore continued to struggle financially, and the hotel recorded a 49 percent occupancy rate in 1974. Penn Central, which had not paid taxes on the site since June 1970, owed over $10 million in back taxes by the beginning of 1976. The Commodore could not be converted to an apartment building because of its large size and inefficient room layouts. Even razing the hotel would cost $7 million. Trump offer and closure Donald Trump's Trump Organization and the Pritzker family's Hyatt hotel chain entered a formal agreement in May 1975, making a joint offer to purchase the Commodore. Trump planned to buy the hotel for $10 million and convert it into a hotel called the Hyatt Regency, spending $70 million on renovations. Trump had one year to purchase the hotel and another 18 months to conduct renovations, after which Hyatt would take over the hotel. Trump planned to re-clad the hotel with a glass facade and expand its public rooms, providing additional space for conventions. The project would create 1,500 jobs, boosting the city's struggling tourism industry, and would be one of Donald Trump's first major projects. One unidentified real-estate expert said that, if Trump succeeded in redeveloping the Commodore, "you could call him 'the William Zeckendorf of Bad Times'". Trump wanted to buy an option from Penn Central, allowing him to purchase the Commodore at a later date, but he did not have $250,000 on hand to pay for the option. City officials asked Trump to supply a copy of his agreement with Penn Central, but Trump sent the option agreement paperwork without signatures. Penn Central spent $1 million on renovations