Boardwalk Empire: The Birth, High Times And Corruption of Atlantic City (45 page)

Upon opening his second casino in June 1985, Trump was a prince, and not just of his Castle. By owning more than one casino, Trump had positioned himself to become a major player in Atlantic City—more influential than politicians or casino regulators. There was only one annoyance. As he basked in the glory of the casino’s opening, Trump was hit with a lawsuit by his partner on the Boardwalk, who was also his competitor across the street at the Marina. After fighting with him over the name of Harrah’s at Trump Plaza, Holiday Corporation didn’t want Trump to use his name on his new property, which was across from Harrah’s Marina. Having a taste of what it was like to run his own casino, Trump went back to the junk bond market and raised the funds needed to buy out Holiday’s interest in the Plaza. A short time later, he successfully fought, and bought, his way out of costly road improvements, which Hilton had agreed to as part of the approvals for the casino hotel. Trump then made some quick money in the stock market, employing “green mail” to weaken several competitors, by threatening takeovers of Holiday Corporation, Caesars World, Inc., and Bally Manufacturing Corporation.

Trump’s next big move came shortly after the death of Resorts International’s Jim Crosby in 1986. He convinced Crosby’s heirs he was the one to complete Crosby’s dream hotel, the “Taj Mahal.” They sold their stock in a deal resulting in Trump having control of three casinos—the maximum allowed by law at that time. To comply with the three-casino limit, Trump proposed to close the casino at Resorts when the Taj Mahal was completed. While casino regulators are supposed to encourage competition and prevent “economic concentration,” they accepted his plan to shut down a gaming hall rather than force him to sell it. Resorts never did close because entertainer/game show producer/investor Merv Griffin acquired it.

There was a brief struggle between Trump and Griffin for control of the corporation, but in the end they both acquired what they wanted. Griffin had purchased large amounts of Resorts’ stock while Trump was dealing with the Crosby heirs. He was someone Trump had to reckon with. In an arrangement between the two, Griffin took control of all of Resorts assets except the partially constructed Taj Mahal, which was the only asset Trump wanted anyway. A few months later, after the Casino Control Commission refused to renew a license for Elsinore Atlantis Casino Hotel, formerly Playboy, Trump exploited Elsinore’s fears that the state might appoint a conservator to run its casino hotel. Shortly before the company’s license expired, Trump bought the property. Since he couldn’t have another casino, he bought the Atlantis as a non-casino hotel to provide rooms for his Trump Plaza on the opposite side of the Boardwalk Convention Hall. With a Plaza and a Castle in hand, Donald Trump turned his attention to the Taj Mahal.

Construction of the Taj Mahal was floundering badly when Trump stepped in. Crosby’s fantasy had become a money pit and spelled financial disaster for his company. The project was too costly for Resorts International and had drained the company’s cash. Most casino industry analysts believed it was simply too expensive to finish and was better off abandoned. Trump was unfazed. He promised that not only would the Taj Mahal be completed, it would be “an incredible place—the eighth wonder of the world.” He set a completion date of spring 1990 and met that deadline, opening in April.

The grand opening was befitting of both Trump and his new casino hotel. Standing on a large platform erected for the occasion in front of the hotel, Trump rubbed an over-sized magic lantern, which spewed smoke and shot a laser beam hundreds of feet into the air, cutting an enormous red ribbon and bow draped from the top of the 42-story hotel tower. The laser show and speeches were followed by a thunderous fireworks display along the Boardwalk. Thousands were on hand both indoors—the gambling had already begun—and out. Despite the usual dignitaries and celebrities on hand, it was the people inside at the slot machines and gaming tables who were most important to Trump. The Taj Mahal would need many thousands of gamblers to be successful.

“Success,” namely
survival
for the Taj Mahal, required truckloads of cash. Prior to its opening, it was widely speculated by serious observers that Trump had to generate revenues in excess of $1 million per day in order to meet his debt service and operating expenses. Trump had leveraged himself so completely that as the grand opening of the Taj approached he didn’t have enough cash on hand to operate his three casinos. In order to comply with Casino Control Commission regulations on the cash reserves required for a casino, Trump secured an interest-free loan from his father. That spring, Fred Trump came to town in one of the Donald’s limousines and brought a suitcase full of cash. Fred exchanged the cash for $3.5 million in Trump Castle Casino gambling chips and provided his son with badly needed cash. The incident led to the adoption of a new regulation by the Commission and enabled Trump to bridge a gap in his financing.

The size of Trump’s financial obligations were exceeded only by the Taj Mahal itself. At the time of its construction, it was the biggest and most expensive building ever erected in New Jersey. Trump’s Taj bears no resemblance to the elegant mausoleum of an Indian Princess for whom the original one is named. Its eclectic architecture incorporates bits and pieces of several extravagant buildings, including the Regency Pavilion in England’s Brighton Beach, the Alhambra Palace in Spain, and Moscow’s candy-cane striped St. Basil’s Cathedral. There’s also some early Miami Beach thrown in together with touches of Las Vegas. Captain John Young would have loved it.

From a distance, Trump’s Taj looks like a gigantic, thickly frosted, multilayered wedding cake, custom-baked for someone with more money than taste. What Trump calls “quality,” others might consider gaudy. Regardless, the numbers on this behemoth of a building are staggering. While only a visit to the property can give one a sense of the place, a recitation of some of the parts that make up the building is helpful in appreciating the commitment Donald Trump has made to Atlantic City. It’s a marriage that won’t end anytime soon.

Trump’s Taj Mahal stands nearly 500 feet tall, making it one of the highest buildings in New Jersey. It covers 17 Boardwalk acres and includes 1,250 guest rooms (400 luxury suites), 175,000 square feet of meeting and exhibit space, an 80,000-square-foot arena, a 1,500-seat theatre, a 30,000-square-foot ballroom, and a 6,000-space parking garage. There are a dozen places to eat and when all the restaurant and banquet facilities operate at capacity, 13,000 people can be served at a time. Construction of the Taj consumed enough steel girders to make nearly five full-scale replicas of the Eiffel Tower. There are acres and acres of marble used lavishly throughout the hotel’s lobby, guest rooms, casino hallways, and public areas—the quantity consumed nearly two years’ output for Italy’s famed Carrara quarries. Austrian-made chandeliers hang over the gaming tables, escalators, and throughout public spaces of the building—the total chandelier bill came to $15 million. Another $4 million was spent on uniforms for the staff of more than 6,500 employees. At the time of the grand opening, mercifully scaled back since,
everyone
was outfitted in outlandish costumes, a mixture of Arabian Nights fantasy and traditional Indian garments.

The core of Trump’s Taj—and from which all blessings flow—is a 120,000-plus-square-foot gambling casino, the world’s largest at the time of its opening. On the day this mirror-lined cavern opened, it increased Atlantic City’s gaming floor space by more than 20 percent. The casino contains more than 3,000 slot machines and nearly 200 gaming tables. To accelerate the pace at which money is fed to the house, there are 1,300 compact change machines scattered over the casino floor along with dozens of ATM machines. The roaring and ringing of the slot machines, and shouting and groaning from the blackjack and craps tables, are endless.

Visually, the casino is dazzling. The lighting is the type you get when you decorate a room in crimson, violet, purple, orchid, fuchsia, salmon, and scarlet—the type of light that makes everyone’s hair look as if it’s been dyed. Toss in big-breasted cocktail waitresses, statues of elephants decked out in jewels, and men on stilts with turbins, and the effect is dizzying. As the
New Baedeker
said of Atlantic City nearly a century ago, so may be said of Trump’s Taj, “It is overwhelming in its crudeness—barbaric, hideous, and magnificent. There is something colossal about its vulgarity.”

The only vulgar thing to Donald Trump about his Taj Mahal was the debt incurred in constructing it. Despite early receipts averaging in excess of $1 million per day, Trump still couldn’t handle both the construction debt (nearly $1 billion) and daily operating expenses. Within less than a year after opening the Taj, Trump made a prepackaged bankruptcy filing, which reorganized the debt with his banks and bondholders. However, the reorganization plan approved by the Bankruptcy Court clobbered many contractors who had worked on the job. To this day there are local contractors and suppliers who cringe at the mention of Donald Trump’s name. It wasn’t a proud day for the Donald, but he survived it and his Taj Mahal is a winner, earning slim but consistent profits. In the Taj and his other holdings, Donald Trump’s presence will be felt in Atlantic City for many years to come.

Another person who helped transform Atlantic City was Arthur Goldberg of Park Place Entertainment, who died at age 58 in October 2000. Smart and tough, yet ethical and courteous, almost courtly, Goldberg was a leader in the true sense of the word. In the brief period he was active in the gaming industry he earned an enviable reputation with casino moguls and Wall Street investors alike. In August 1999,
Barron’s
, the Dow Jones business and financial weekly, declared him “King of Craps” in a feature article.

Arthur Goldberg’s empire began with his family’s Newark-based trucking company, Transco Group, a hauler of goods for such national accounts as Tropicana, Safeway, and Pepsi-Cola. A graduate of Villanova Law School, he gave up the law after only two years to run the family business for his father, who had suffered a serious heart attack. In 1979, with earnings from Transco, Goldberg acquired a major position in Triangle Industries, a wire and cable maker. He quickly became CEO of Triangle and realized a $7 million profit on his investment when Triangle was bought by other investors a year later. In 1983, Goldberg made another large investment into International Controls, a conglomerate producing everything from bomb casings and electric utility towers to tractor-trailers. Again, Goldberg became CEO and several years later, after improving the value of the company, sold his stock for another large profit. His reputation as an investor willing to get his hands dirty by involving himself in the management of the companies he bought added to Goldberg’s aura.

As the decade of the ’80s came to a close, Goldberg had been so successful that he found himself with little to do. In 1989, he acquired controlling position of a food distributor, DiGiorgio Corporation, which sold Italian food items. It was profitable, but not enough of a challenge. A year later he paid $14 million, or $8 a share, for a 5.6 percent interest in Bally Entertainment, Inc., the owner of Bally’s Park Place Casino Hotel. At the time, Bally’s was in serious trouble and was in danger of being forced into a
Chapter 11
bankruptcy filing.

Goldberg had bought into a headache. Consistent with past ventures, he dove into the casino business feet first, never contemplating failure. He went to Bally’s Board of Directors with a turnaround plan, conditioned on his being named Chairman and CEO. The Board accepted his proposal and Goldberg never looked back. His performance in turning Bally’s around was extraordinary by anyone’s yardstick. Investors who stayed with Goldberg from the day he joined the company in November 1990, to the Hilton Hotel’s purchase of Bally’s nearly six years later, saw their shares increase in value from $3.50 to $28. At Goldberg’s encouragement, despite the earlier debacle, Hilton reapplied for licensing and this time was successful.

The Hilton merger moved Arthur Goldberg and the Hilton organization—and with them, Atlantic City as well—to the first tier of the gaming industry, worldwide. Goldberg became President of Hilton Gaming and brought 11 Hilton properties, including the Flamingo and Las Vegas Hilton, under his control with the four he had. That total increased to 18 gaming properties with the purchase of three major Mississippi casinos when newly formed Park Place Entertainment was spun off from Hilton. The final addition to his empire before his early demise was Paris-Las Vegas, a lavish $800 million casino hotel that opened in September 1999. Arthur Goldberg set the standard for the new gaming entrepreneur in Atlantic City and the nation. He is sorely missed.

Several political leaders whose efforts in the public arena throughout the 1980s and ’90s complimented the dynamism of people like Goldberg, Trump, and Wynn are James Usry, William Gormley, and James Whelan. Despite differences in politics and styles, each, in their own way, worked to keep Atlantic City moving forward.

James Usry was part of the last wave of Blacks drawn from the South to Atlantic City’s hotel industry. Born in Athens, Georgia, in 1922, Usry’s family came north shortly after his birth. He was a soldier in World War II, serving in a famous segregated unit, the “Black Buffaloes.” An outstanding athlete, he played for a short time with the “Harlem Globetrotters.” A graduate of Atlantic City High School and Lincoln University, Jim Usry devoted most of his career to education. As a teacher and school administrator, he touched the lives of thousands of local children.

Usry had been a community leader for years prior to making his first run for political office in 1982. He lost to Michael Matthews in a bitterly contested election. Following Matthews’ indictment, Usry was elected Atlantic City’s first African-American mayor in the recall election of 1984. Re-elected to a full term in 1986, Jim Usry’s agenda was Atlantic City’s residents. As stated by the
Press of Atlantic City
at the time of his death: