Donald John Trump emerged as the dominant personality of Atlantic City in the 1980s as he developed three casinos in the East Coast gambling center. He was not yet in his forties when he won a license in 1982, along with his younger brother, Robert, to build and operate the Trump Plaza. Soon he negotiated a merger for the ownership of the property with Holiday Inn. The finished property opened in 1984 as the Harrah’s at Trump Plaza. In 1986, Trump bought out his Holiday Inn partners and also purchased a casino, which was being constructed by the Hilton Corporation, after Hilton was denied a license. The project became known as the Trump Castle. In 1988 he acquired rights to the Taj Mahal casino in a financial struggle with Resorts International and directed the completion of Atlantic City’s largest property, which at the time featured the largest casino floor in the world. By the time the Taj Mahal opened in 1989, it carried a price tag of $1 billion, the highest price for any casino project in the world up to the time. High prices come at a cost, and in the early 1990s, the property went through a bankruptcy action in order to survive. But as the economy began to improve in the mid-1990s, Trump’s properties made money again, or at least could satisfy their creditors. That is, he did well enough to be able to sell equity shares in his properties and keep everything afloat. Out of the debts he arose again as the champion of the Boardwalk. He also reached out to the Midwest by opening a large riverboat in Indiana on the shores of Lake Michigan. The self-proclaimed master of “the deal” even allowed his sights to scan the political landscape, as he publicly pondered a run for the presidency in year 2000 on the Reform party ticket.
Donald Trump was raised in wealth. His father, Fred Trump, was a builder who parlayed construction of individual housing beginning in the 1920s into development of tracts and building of large apartment complexes, often with government subsidies. His father learned all about political connections and how they were necessary in his line of work. Donald was born in 1946 in the Jamaica Estates in Queens, a borough of New York City. His family lived in a twenty-three-room mansion. As a youth, the younger Trump gained a taste for fancy cars, tailored clothes, and fancy women – what he would consider to be the most important things in life—possessions. He also showed a proclivity to follow in his father’s footsteps as a builder.
He was sent to the New York Military Academy in Cornwell on the Hudson. He was a good student, and he demonstrated leadership qualities. After military academy Trump attended Fordham University and the Wharton School at the University of Pennsylvania. He graduated with a B.A. in economics in 1968. Trump expressed disappointment that the real estate courses at Penn emphasized single-family dwellings because he desired to build big things. Soon he was working with his father building bigger things. And soon after that, he left to go on his own because his father did not want to build big enough things. His father was somewhat content to be rich building in the neighborhoods, but Donald Trump wanted Manhattan.
Trump saw his first big opportunity come when the Penn Central Railroad declared bankruptcy. He took options on some of their land alongside the Hudson River, and he also took an option on the fifty-nine-year-old Commodore Hotel. He persuaded the city to purchase the riverfront land for a major convention center. Trump cut a deal with the Hyatt Corporation to construct the Grand Hyatt on the Commodore location; the new hotel, with 1,400 rooms, was finished in 1990. Almost simultaneously, Trump started other hotel projects and also a high-rise apartment building called Trump Towers. He visited Atlantic City often and pondered casinos. He never gave them serious thought, however, until he saw reports saying how Hilton’s two Las Vegas hotel casinos made almost half the income of all Hilton properties in the United States. Suddenly he realized that even a mediocre hotel with a casino could be much more profitable that the most luxurious hotels of the world.
Trump took a long look at Atlantic City before jumping into that market. He wanted land near the center of the Boardwalk area. In 1980, some land investors came to him with a plan by which he could gain control over what he considered the most prime land in the city. In his book The Art of the Deal, Trump describes the intricacies of how to put many separately owned parcels of land together (Trump and Schwartz 1987). Every offer he made for a purchase was contingent upon all parcels being purchased. He also determined that he would not start to build a casino until he was fully licensed. In 1982 he and his younger brother, Robert, won casino licenses. After he began to construct his casino, he went into a partnership with Holiday Inn. When the casino hotel was finished in 1984, it was called Harrah’s at Trump Plaza. He bought out his partner in March 1986 and installed his brother as its manager. Later Steve Hyde took over control of the casino aspects of the operation. The property became the Trump Plaza. By then, Trump had taken over the Hilton’s 614-room hotel casino complex in a deal that was necessitated by the fact that the New Jersey gambling authorities had denied Hilton a license in 1985.
When the complicated deal was completed, Trump chose his wife, Ivana, to be the property manager of the new Trump Castle. Ivana had absolutely no experience in gaming – for a fact, neither did Trump. She saw the Castle as a place of glamour that could attract high rollers, whereas Hilton had intended to have a slot-intensive facility that would cater to the masses. The Plaza was a place for high rollers. Rather than working with a strategy that tied the two properties together, Trump encouraged Hyde and Ivana to operate as competitors. Soon internal corporate battles turned vicious. Also, Trump had found a girlfriend named Marla Maples. In order to conceal his affair with Maples, Trump allied himself with Hyde in the battle between Hyde and Ivana. His tryst flowered in the Plaza. Finally, Trump felt it was necessary to remove Ivana from the Castle and get her out of town. He publicly humiliated her as he moved her into management of one of his New York City properties. An inevitable divorce was followed by a short marriage to Marla Maples.
The next casino opportunity came for Trump when Resorts International president James Crosby died on 10 April 1986 at the premature age of fifty-eight. In 1984 he had revealed plans for the largest casino attached to a hotel in the United States. The Taj Mahal was to have over 120,000 feet of gambling space and over 1,000 rooms – the largest number in Atlantic City. Resorts won all the approvals for construction, and the process of building began. The death of Crosby plunged Resorts into a fiscal crisis, however, and Trump made a move to buy out the company and hence acquire the rights to the “largest casino in America”. As the New Jersey law provided that a casino owner could have only three properties, Trump indicated that he would close the Resorts Casino as soon as the Taj Mahal opened. Trump did win a controlling position in Resorts with his stock purchases. He found, however, that he lacked the capital to finish the Taj Mahal. Television entertainer Merv Griffin, in a sense, bailed Trump out by purchasing all Resorts property except the Taj Mahal from Trump in 1988. In 1989, the project was completed. Trump, however, did not have the funds to properly open the facility. Legal troubles flowing from his divorce further complicated his already complex financial affairs. The property was also beset with a tragedy, as Steve Hyde, who was to become its manager, and two other top executives were killed in a helicopter accident on 10 October 1989. Only recourse to bankruptcy proceedings in 1992 and transfers of equity in the property to bond holders and other creditors saved the property.
In 1995, Trump completed an initial public offering on the New York Stock Exchange to sell more than $300 million of common stock and senior secured notes backed by his casino revenue flow. That same year he was named to be a member of the World Gaming Congress Hall of Fame. When his rival, Stephen Wynn, heard this, he asked the congress to remove his name from the Hall of Fame. A rivalry persists, but Trump is the one who can say he “turned things around.” Showing that he has something like the proverbial nine lives of a cat, Trump has survived to go into riverboat gambling (actually lakeside) and set his visions on a run for political office. He remains a man in search of a big deal, wherever that deal might be found.
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