Bankrupt & Bust: Trump's Atlantic City Adventure

Donald Trump is back. Love him or hate him, there is absolutely no way to ignore him. He is a force of nature. Trump is the personification of The Art of the Deal — a walking-talking-wheeling-dealing business behemoth, always one step ahead of the competition.

Or is he?

We're taking a deep dive into the rise and fall of Trump's Taj Mahal and his whole Atlantic City casino empire — and the destruction he left behind.

BOOM! At 9 am on February 17, 2021, Atlantic City finally said goodbye to Donald Trump. It took 3,000 sticks of dynamite to demolish the building. Clearing up the mess Trump has left behind will take generations.

Trump's legacy in Atlantic City is debt, broken contracts, and unemployment. His aspirations as an entertainment mogul were demolished. Bidders raised $175,000 in a charity auction for the right to push the button and detonate the derelict Trump Plaza Hotel.

Donald Trump. Everything about the man splits opinion. To many, he is the no-nonsense leader, the self-made businessman, the American dream personified. The billionaire man-of-the-people who gets deals done, wages war on the wokeness, and stands up to the swamp.

The truth about Trump is that he also fails. His touch is not golden. This isn't political — this is pure accounting. Trump's business career is a demolition derby of litigation, setbacks, tough decisions, and restructurings.

His father, Fred Trump, was a ruthless and cunning businessman — a rags-to-riches real estate multi-millionaire who built it all from nothing. Donald Trump inherited the 'ruthless,' but what about cunning?

Trump's impressive catalogue of failure really came into its own in the 1980s, when he tried to follow in the golden footsteps of casino entrepreneurs like Sheldon Adelson, Kirk Kerkorian, Steve Wynn, and Stanley Ho. By 1990, the Trump Organization was $3.4 billion in debt. In the golden era of Atlantic City, Trump managed to hit a zero, with every number on the roulette table covered.

In 1978, Atlantic City opened its first casino. The New Jersey seafront city had been in decline for decades. Casino gambling would be the key to future prosperity. Atlantic City would be the Las Vegas of the East Coast.

On March 15, 1982, Donald Trump received a casino license from the New Jersey Casino Control Commission. He planned to build his own casino but cosied up with Harrah's CEO Mike Rose — Trump would handle the construction and Harrah's would operate the property. Trump got his license application fast-tracked by threatening not to build the casino at all.

The property opened in 1984. Harrah's at Trump Plaza had 614 rooms, seven restaurants, a health club, and a 60,000 sq ft casino. It started to fail from the opening day.

Trump wanted the whales. He had built 85 high roller suites to accommodate the 'good people.' But Harrah's was the Walmart of wagering; high rollers rolled elsewhere. The casino made only $144,000 in the first half of 1985.

In 1986, Trump bought Harrah's out for $70 million. Undeterred, Trump bought the Atlantic City Hilton hotel and casino from Hilton Hotels for $325 million — a deal that happened because the Hilton Group had been denied a gaming license just two months before it was due to open. The property was called Trump's Castle Hotel Casino. It was managed by his first wife, Ivana. The casino would be filing for Chapter 11 bankruptcy protection in less than a decade.

In 1983, Resorts International began construction of the Taj Mahal casino in Atlantic City with a budget of $250 million. When the Resorts CEO James Crosby died in April 1986, the hotel became a takeover target. Trump offered to personally finance the construction in exchange for ownership. Former singer Merv Griffin stepped in with a counter-offer; chaos ensued. In the end, Trump takes the casino, Griffin has the hotel. Both claim victory.

The Trump Taj Mahal Casino opened its doors on April 2, 1990. Trump described it as the 8th Wonder of the World. On the opening night, Michael Jackson was the guest of honour.

Now, it's time to pause and recap. Trump owns three casinos in Atlantic City. It's 1990. He has just unleashed the mother of all betting shops. The problem is that everything is built on debt. It's borrowed money and pure Trumpian chutzpah.

The Taj Mahal was built on junk bonds. The casino would have to make close to $1.3 million a day, to barely break even. Atlantic City is popular in the summer months, but from October to February, no one comes to the ice-cold, wind-swept northeast coast of America.

Of course, Roffman was right. Trump had him fired. In the end, Roffman counter-sued for wrongful dismissal and settled out of court.

Within two years, all three of Trump's casinos had filed for bankruptcy. By the end of 1990, the Trump Organization owed money to 70 banks. Trump owed more than $70 million to 253 contractors who worked on the Taj Mahal — each of them with their own staff to pay.

Trump delayed payment initially because he feared they were cheating him. That was the excuse. The truth is, there was no money.

Of course, Trump cleverly managed to guarantee his own wealth, by ensuring profit and loss calculations didn't include debt. Clever debt restructuring, multiple Chapter 11 bankruptcy filings, and that famed chutzpah enabled Trump to get away with it.

Here's the thing. If morality, ethics, social norms, and decency are not important, then Donald Trump is truly the brilliant businessman he claims to be.

Love him or loathe him, he walked away from the Atlantic City disaster and ended up as leader of the free world — twice.