Too Much and Never Enough, стр. 44
In yet another sign of Fred’s waning influence, Donald had purchased a $300 million–plus casino that would become Trump’s Castle sight unseen in 1985, only a year after he had bought Harrah’s, which became Trump Plaza. For Donald, too much of a good thing was a better thing; Atlantic City had unlimited potential, he believed, so two casinos were better than one. By then Donald’s ventures already carried billions of dollars of debt (by 1990, his personal obligation would balloon to $975 million). Even so, that same year he bought Mar-a-Lago for $8 million. In 1988, he’d bought a yacht for $29 million and then, in 1989, the Eastern Air Lines Shuttle for $365 million. In 1990, he’d had to issue almost $700 million in junk bonds, carrying a 14 percent interest rate, just to finish construction on his third casino, the Taj Mahal. It seemed as if the sheer volume of purchases, the price tags of the acquisitions, and the audacity of the transactions kept everybody, including the banks, from paying attention to his fast-accumulating debt and questionable business acumen.
Back then, Donald’s favorite color scheme was red, black, and gold, so Atlantic City’s cheap glitz appealed to him almost as much as the allure of easy money. The house always wins, after all, and it was a good bet that anybody who could afford the buy-in would do well there. Atlantic City was completely outside of Fred’s purview, which also appealed to Donald. Setting aside the massive monetary investments made by Fred and others, operating a casino, unlike the Grand Hyatt and Trump Tower, which were development projects that were ultimately managed by other entities, would be an ongoing business. As such, it would have been Donald’s first opportunity to succeed independently of his father.
Having his own casino provided Donald an outsize canvas; he could tailor that entire world to his specifications. And if one casino was good, two would be better and three even better than that. Of course, his casinos were competing with one another and eventually would be cannibalizing one another’s profits. As absurd as it was, there was a certain logic to his wanting more—after all, it had worked for his father. But Donald didn’t understand, and refused to learn, that owning and running casinos were vastly different from owning and running rental properties in Brooklyn, from the business model and the market to the customer base and the calculus involved. Because he couldn’t see that glaring distinction, it was easy for him to believe that more was better in Atlantic City, just as it had been for my grandfather in New York’s outer boroughs. If one casino was a cash cow, three would be a herd of them. He would do with casinos what Fred had done with his apartment buildings.
The only part of the scenario that defies explanation is the fact that the banks and investors in his first two casinos didn’t object more strenuously to his opening a third, which would cut into their own bottom lines. It made even less sense that he could find anybody interested in investing in it. Even a casual glance at the numbers—not least, the debt service—should have scared the most reckless lender away. In the late 1980s, nobody said no to Donald, thereby legitimizing another misguided project that had the ancillary benefit of bolstering the ego of a man who had no way of making it succeed.
In August of that year, Surviving at the Top was published, and within weeks it would become clear that the book’s subject matter and timing were bad enough to qualify as parody.
In June 1990, Donald missed a $43 million payment for Trump’s Castle. Six months later, my grandfather sent his chauffeur with more than $3 million in cash to purchase chips at the Castle. In other words, he bought the chips with no intention of gambling with them; his driver simply put them in a briefcase and left the casino. Even that wasn’t enough. The next day, my grandfather wired another $150,000 to the Castle, presumably for more chips. Although those maneuvers helped temporarily, they resulted in my grandfather’s having to pay a $30,000 fine for violating a gaming commission rule prohibiting unauthorized financial sources from lending money to casinos. If he wanted to continue lending Donald money to keep his casinos afloat (which he did), he would also be required to get a gaming license in New Jersey. But it was too late. Donald might have controlled 30 percent of Atlantic City’s market share, but the Taj was making it impossible for his two other casinos to make money (the Plaza and Castle lost a combined $58 million the year the Taj opened), the three properties carried $94 million in annual debt, and the Taj alone needed to pull in more than $1 million a day to break even.
The banks were bleeding money. Just as the Taj was opening, Donald and his lenders were meeting to try to figure out how to rein in and manage his spending. The possibility of more defaults and bankruptcies still loomed, and a solution had to be found that would protect Donald’s image, which, in turn, would protect the banks’ money. Without the veneer of success and confidence he projected (and had projected for him), the bankers feared that his properties, already in trouble, would lose even more value. His last name was the draw: without the name there would be no new gamblers or tenants or people willing to buy bonds and hence no new revenue.
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