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The Myth of Donald Trump’s Atlantic City Success

A major part of Donald Trump’s big sell is that he’s a successful businessman who knows how to create jobs and who has made himself rich by dreaming and building big. 

The Trump story sounds great, but voters thinking of investing their vote in Donald Trump would do well to ask, “Who has actually benefited and who has been hurt by the ups and downs of Trump’s business ventures?” 

According to Wayne Barrett's 1990 book Trump: The Deals and the Downfall, and Dan McQuade's reporting Trump Atlantic Cityfor Philadelphia Magazine, the reality of the mogul’s "success" in Atlantic City doesn’t always square with the story he tells about it.  

Donald Trump likes to brag that he made a lot of money in Atlantic City and got out before things went sour. But says McQuade, like the professional wrestling bouts he used to host at his casino, that's mostly an act. 

While it is true Trump once had an Atlantic City empire, he didn’t sell it — he lost it – and hurt a lot of his investors and employees in the process – the very same average Americans he is appealing to in his presidential campaign. 

Trump's plan for the Harrah’s at Trump Plaza, his first property in Atlantic City, was to attract high rollers, not day-gamblers – it was a miserable failure, at least for Trump’s partner Holiday Inn, owner of the Harrah’s casino brand. 

"Each week Harrah's Marina earned a bigger net profit than Harrah's at Trump Plaza earned in all of 1985," former Inquirer reporter David Cay Johnston wrote in Temples of Chance, his stellar book on the expansion of gambling, primarily in Atlantic City, in the 1970s and ’80s. 

Over the course of the next five years Trump bought a competing casino from Hilton, fought and won a battle with Holiday Inn and drove them out of Trump Plaza, launched a hostile takeover battle for Bally, weakening the company to the point that it was drowning in red ink, fought a battle with Merv Griffin for control of Resorts International and eventually got what he wanted – the Taj Mahal property – which he financed primarily with junk bonds. 

According to Dan McQuade the casino opened in April of 1990, but just over a year later, Trump was not going to be able to make his June payments. The New York Times reported Trump was on the hook for $900 million that year, and the Taj Mahal eventually filed for Chapter 11 bankruptcy.  

Trump lost about half of his interest in the casino, and had to sell his private yacht and plane to help pay his losses.  

According to McQuade’s reporting Trump’s creditors even put him on a budget of $54 million, not that bad for a guy who was in the tank for almost $1 billion. 

Eventually, reported McQuade, Trump consolidated his three Atlantic City casinos under a publicly traded company, Trump Hotels and Casino Resorts. By then he owned less than half of both his boardwalk casinos. The company bought the Taj in early 1996. He sold the Trump Castle to that same company later that year. The Times reported Trump did not make any cash on the first deal; he made a little under a million on the Castle deal, along with $130 million in stock. 

In 1990, noted McQuade, Trump had also purchased the old Playboy Hotel and Casino. He first operated it as a hotel, and then turned it into the Trump World's Fair and Casino in 1996. It closed in 1999 and was demolished the next year. 

And it got worse for Trump from there. In 2004 Trump Hotels and Casino Resorts Inc. filed for bankruptcy with $1.8 billion in debt.  

After the restructuring, Trump's share was reduced to 28 percent. “We have one of the most powerful gaming companies the day it comes out [of bankruptcy]," Trump said of his now vastly reduced share of the company. "There’s no way we could have done that without the ’B’ word.” 

But just five years later, the company again filed for bankruptcy with $50 million in assets and $500 million in debt, per its filing. Trump eventually resigned from the board, and having started with 100% of three casinos, he ended up with just 10 percent of the company when it came out of bankruptcy. 

By 2015, only one of Trump’s casinos still stood with the Trump name, but it’s not owned by Donald Trump or one of his companies, it’s owned by Carl Icahn.  

The Trump Plaza closed in September of 2014, costing about 1,000 employees their jobs. 

The Trump Marina (formerly Trump Castle) was sold to Landry's, which owns Chart House and Bubba Gump Shrimp Company among other restaurants; it is in resurgence as the new Golden Nugget under the new ownership.  

The Trump Taj Mahal, now owned by Carl Icahn, was mired for most of 2015 in a messy reorganization that depended upon Icahn being allowed to withdraw from the underfunded pension system of the union representing the casino hotel’s workers to make the deal go -- a move that many see as in effect busting the union.

Trump's Atlantic City casino empire, a classic example of the power of OPM – Other People’s Money – was built and funded by others. Dan McQuade says Trump did, by all accounts, make a lot of money for himself in Atlantic City, but a lot of regular people lost money investing in his casinos. 

Reuben Kramer and Christian Hetrick of The Press of Atlantic City put it this way when they surveyed Trump’s impact on the economy of Atlantic City:

“As voters examine [Donald Trump’s] Atlantic City tenure to decide whether he has the economic chops to be president, they’ll find a record marked by questionable casino management and episodic corporate bankruptcy — the legacy of a fractious know-it-all who brought publicity, tax dollars and thousands of decent jobs to South Jersey, but whose manic and myopic deal making ultimately yielded a moribund casino empire, mined into exhaustion and left to wither.” 

But says McQuade Donald Trump deserves credit — perhaps grudging credit, but credit nonetheless – for this impressive feat. He was, indeed, one of the largest employers in South Jersey for decades. But he was no visionary, getting out ahead of the crash. Trump once had an Atlantic City empire alright, but he didn't sell it — he lost it – and hurt a lot of little people in the process.

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