Trump folds on plans for fourth Atlantic City casino
By Daniel Michaels, May 20th 2005ATLANTIC CITY - There will be no 62-story, $1.5 billion casino hotel on the old World's Fair site, nor will there be a 4,000-room, $750 million casino hotel there.
Donald Trump is giving up on his troubled Boardwalk site.
"Because of the politics in Atlantic City, probably we're not going to develop that site. ... Probably CRDA (Casino Reinvestment Development Authority) should buy that site from us and they should pay a lot of money for it," he said.
Trump made the comment Wednesday on a freewheeling conference call in which Trump Hotels & Casino Resorts officials bashed Borgata Hotel Casino & Spa, trashed the local state senator, threatened the state with legal action and announced a second-quarter loss of $10 million.
"Idiot" state Sen. Bill Gormley, R-Atlantic, has hurt Boardwalk investment by failing to protect the casino industry from higher gaming taxes earlier this month and by spearheading the development of an off-Boardwalk convention center a decade ago, Trump said.
"He has made so many bad decisions," Trump said in an interview afterward. "I'm going to let somebody else get rich. It is the best site in Atlantic City."
Gormley said Trump is trying to blame him for Trump's inability to finance a major casino project. Gormley said the convention center had to be moved if it were to compete with larger centers in the East and that the conversion of the old convention into the Boardwalk Hall arena has been an unqualified success.
"He's obviously got to blame somebody other than himself," Gormley said.
Andrew Susser, a gaming analyst with Bank of America Securities, said Trump has issues with the World's Fair site that go beyond politics.
"One, he doesn't have a big enough site. Two, he doesn't have the financing. Three, it would be difficult to get the financing of a joint-venture partner given all the problems of his company and the challenges Atlantic City has," Susser said.
The 2.5-acre World's Fair site has been vacant for almost two years. The 500-room Playboy casino hotel opened on the site in 1981 and later became Atlantis before the Casino Control Commission forced it to close due to financial instability in 1989.
Trump converted the property into a noncasino hotel, the Trump Regency, and connected it to Trump Plaza by a walkway spanning the old convention center facade. In 1996, it became the Trump World's Fair Casino at Trump Plaza, only to close 31/2 years later.
Trump in 1999 said he would "bring the magic of Manhattan" to the site with a 4,000-room casino hotel. Two years later, he proposed a 62-story casino hotel.
CRDA Executive Director James B. Kennedy was surprised by Trump's proposal but said his agency might be interested in buying the property - for the right price.
"We'd entertain any offer from any casino company for surplus property," he said. "Clearly, it is not a proposal we would reject out of hand."
Kennedy said it is premature to discuss what the CRDA might do with the site.
"Clearly, we're not in the casino business, so we would have to come up with some other public purpose," he said.
By backing out of plans to redevelop the World's Fair site, Trump has dealt a setback to the CRDA's attempts to buy the adjacent West Hall from the New Jersey Sports and Exposition Authority.
The two authorities reached a tentative $23.6 million deal in late 2001 for West Hall's sale, but never closed the agreement. West Hall, a hulking expansion to Boardwalk Hall built in the early 1970s, was to be demolished after it was acquired by the CRDA.
As part of the deal, Trump would have been given a seven-year option to buy the West Hall site from the CRDA and combine it with the World's Fair property for his new casino project.
"The whole West Hall deal was predicated on him going ahead with the World's Fair project," Kennedy said.
Trump Hotels, meanwhile, reported second-quarter cash flow of $81.4 million, down 7 percent, on net revenue of $306.9 million, down negligibly.
It reported a net loss of $10 million, or 46 cents per diluted share, compared to a net profit of 244,000, or 1 cent per share, a year earlier.
The company blamed the war in Iraq, bad weather in early spring and higher taxes and utility costs.
Business rebounded to 2002 levels after a slow start in April, Trump said.
The July 2 opening of the $1.1 billion Borgata has neither helped adjacent Trump Marina as the company expected nor hurt the two Trump Boardwalk casinos as the company expected, Chief Operating Officer Mark Brown said.
The state's failure to complete a connector between Borgata and Trump Marina has hurt Marina's business, Brown said. Trump Marina gamblers naturally want to check out the new casino but have a hard time finding their way back, he said.
The ramp was supposed to open last month but now won't be completed until September, Trump officials said.
"We're looking into the possibility as to whether the state has any liability for its slow work," Trump said.
Not that Trump officials are worried about Borgata.
"Our food quality is superior to all of Atlantic City. I've eaten over there. No comparison," Brown said.
"When you walk into the Borgata and walk into the (Trump) Taj Mahal, it's a no contest. Taj Mahal wins hands down," Trump said.
Donald Trump is giving up on his troubled Boardwalk site.
"Because of the politics in Atlantic City, probably we're not going to develop that site. ... Probably CRDA (Casino Reinvestment Development Authority) should buy that site from us and they should pay a lot of money for it," he said.
Trump made the comment Wednesday on a freewheeling conference call in which Trump Hotels & Casino Resorts officials bashed Borgata Hotel Casino & Spa, trashed the local state senator, threatened the state with legal action and announced a second-quarter loss of $10 million.
"Idiot" state Sen. Bill Gormley, R-Atlantic, has hurt Boardwalk investment by failing to protect the casino industry from higher gaming taxes earlier this month and by spearheading the development of an off-Boardwalk convention center a decade ago, Trump said.
"He has made so many bad decisions," Trump said in an interview afterward. "I'm going to let somebody else get rich. It is the best site in Atlantic City."
Gormley said Trump is trying to blame him for Trump's inability to finance a major casino project. Gormley said the convention center had to be moved if it were to compete with larger centers in the East and that the conversion of the old convention into the Boardwalk Hall arena has been an unqualified success.
"He's obviously got to blame somebody other than himself," Gormley said.
Andrew Susser, a gaming analyst with Bank of America Securities, said Trump has issues with the World's Fair site that go beyond politics.
"One, he doesn't have a big enough site. Two, he doesn't have the financing. Three, it would be difficult to get the financing of a joint-venture partner given all the problems of his company and the challenges Atlantic City has," Susser said.
The 2.5-acre World's Fair site has been vacant for almost two years. The 500-room Playboy casino hotel opened on the site in 1981 and later became Atlantis before the Casino Control Commission forced it to close due to financial instability in 1989.
Trump converted the property into a noncasino hotel, the Trump Regency, and connected it to Trump Plaza by a walkway spanning the old convention center facade. In 1996, it became the Trump World's Fair Casino at Trump Plaza, only to close 31/2 years later.
Trump in 1999 said he would "bring the magic of Manhattan" to the site with a 4,000-room casino hotel. Two years later, he proposed a 62-story casino hotel.
CRDA Executive Director James B. Kennedy was surprised by Trump's proposal but said his agency might be interested in buying the property - for the right price.
"We'd entertain any offer from any casino company for surplus property," he said. "Clearly, it is not a proposal we would reject out of hand."
Kennedy said it is premature to discuss what the CRDA might do with the site.
"Clearly, we're not in the casino business, so we would have to come up with some other public purpose," he said.
By backing out of plans to redevelop the World's Fair site, Trump has dealt a setback to the CRDA's attempts to buy the adjacent West Hall from the New Jersey Sports and Exposition Authority.
The two authorities reached a tentative $23.6 million deal in late 2001 for West Hall's sale, but never closed the agreement. West Hall, a hulking expansion to Boardwalk Hall built in the early 1970s, was to be demolished after it was acquired by the CRDA.
As part of the deal, Trump would have been given a seven-year option to buy the West Hall site from the CRDA and combine it with the World's Fair property for his new casino project.
"The whole West Hall deal was predicated on him going ahead with the World's Fair project," Kennedy said.
Trump Hotels, meanwhile, reported second-quarter cash flow of $81.4 million, down 7 percent, on net revenue of $306.9 million, down negligibly.
It reported a net loss of $10 million, or 46 cents per diluted share, compared to a net profit of 244,000, or 1 cent per share, a year earlier.
The company blamed the war in Iraq, bad weather in early spring and higher taxes and utility costs.
Business rebounded to 2002 levels after a slow start in April, Trump said.
The July 2 opening of the $1.1 billion Borgata has neither helped adjacent Trump Marina as the company expected nor hurt the two Trump Boardwalk casinos as the company expected, Chief Operating Officer Mark Brown said.
The state's failure to complete a connector between Borgata and Trump Marina has hurt Marina's business, Brown said. Trump Marina gamblers naturally want to check out the new casino but have a hard time finding their way back, he said.
The ramp was supposed to open last month but now won't be completed until September, Trump officials said.
"We're looking into the possibility as to whether the state has any liability for its slow work," Trump said.
Not that Trump officials are worried about Borgata.
"Our food quality is superior to all of Atlantic City. I've eaten over there. No comparison," Brown said.
"When you walk into the Borgata and walk into the (Trump) Taj Mahal, it's a no contest. Taj Mahal wins hands down," Trump said.
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Trump folds on plans for fourth Atlantic City casino
