The Taj Mahal Fiasco

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In the early 80s, Donald J. Trump got bored with his building towers and fancy buildings in New York and he moved his operation to New Jersey to build casinos. At that time most wanting to build casinos in Atlantic City needed to qualify and show they did not have any history with organized crime. Many couldn't do that so it was pretty easy for Trump to come in and build a resort and casino. Trump got Harrah's to go in 50% with him and Harrah's at Trump Plaza opened in May 1984. It had 614 rooms and 60,000 square feet of gambling hall. It only made $144,000 in the first 6 months. This led Harrah's to want out and Trump bought him out for $70 million. Trump wanted to monopolize the Boardwalk in Atlantic City with casinos. He finagled, issued junk bonds, bought licenses, and bought out shares to acquire buildings that hadn't been finished. Trump is a deal-maker, not a financier. He comes up with the idea, finds the property, gets the necessary approvals, and then finds someone else to fund the project. Trump finally got the Taj Mahal built, and the complete construction was done at a 14% interest rate with the bank. The banks thought Trump's brand was too big to lose so they kept giving and restructuring loans. At this same time, Trump was spending $407 million for the Plaza Hotel and $350 million for Eastern Airlines which came with a fleet of Boeing 727s. It's not a profitable purchase at all. So, the Taj Mahal Resort and Casino opened in April of 1990 and was the largest on the boardwalk taking up 17 acres. It had 1,250 rooms, 120,000 square feet of gambling hall, 3,000 slot machines, and more than 160 gaming tables. There was also a 7,000-seat arena for boxing and concerts. Trump advertised the Taj Mahal as the 8th wonder of the world. In 1991 Trump filed his first bankruptcy, with another two in 1992, one in 2004. In an interview in 1990 with Barbara Walters she said: "You have a little more debt than most people. You have something like $3 billion in debt." His only argument was that the country was in a depression. Trump ended up with an ownership stake of 27% from the 56% he had in the beginning. He also retained a fee for the use of his name on the plaza. He sold the Taj Mahal Resort and Casino to an investor, Carl Icahn, for $50 million when it had cost him $1.2 billion to build. It later closed in 2016 due to a labor dispute between its then-owner Icahn and the union representing its workers. There were 253 contractors who had worked on the Taj Mahal. They had hired thousands of workers to sculpt the cement on domes and minarets, installing windows and chandeliers, glass and drywall, bathroom fixtures and so much more. Trump owed $70 million to these workers. They got pennies on the dollar when Trump was taken to court and many were unable to pay the legal fees when Trump used his delay, delay, delay tactic he is so famous for so they lost out completely. So, this is the man who is wheeling and dealing America away to the largest bidder. Why do people keep working with him? The picture is from travelgrove.com