I SAID AT THE START that I do it to do it. But in the end, you’re measured not by how much you undertake but by what you finally accomplish. What follows is an accounting of how the deals that crossed my desk in the week I chose to describe have since turned out.
Several weeks after selling my Holiday stake for a profit, which was substantial but not the reported $35 million, I began purchasing stock in another casino company, Bally Manufacturing Corporation. In a short time, I accumulated 9.9 percent of the stock. Bally responded by adopting poison pill provisions aimed at thwarting any attempt at a hostile takeover. When they also sued to try to keep me from buying any more stock, I countersued.
Two days after I initiated my suit, Bally announced an agreement to purchase the Golden Nugget casino at the highest price ever for an Atlantic City casino, almost $500 million, including the cost of the bonds. Once again, the real goal seemed to be to thwart me. No company is legally permitted to own more than three casinos in Atlantic City, and if I took over Bally after they’d purchased the Golden Nugget, I’d own four.
In effect, however, they put me in a win-win position. By paying such a huge price for the Nugget, Bally could only serve to increase the value of all casinos in town, including the two I already owned.
In the end, Bally offered me a settlement I couldn’t refuse. I agreed not to stand in the way of their purchase of the Nugget. In return, they agreed to buy back my 9.9 percent stake in their company at an average price much higher than I paid, giving me a profit on my brief investment of more than $20 million.
In March 1987 I made my third attempt to purchase a casino company, Resorts International, but this time on a friendly basis. In the wake of the death of Resorts founder James Crosby, several other parties had launched bids for the company, but none had been successful. In the meantime, I’d developed a close relationship with several members of Resorts who controlled the company. In April 1987 I came to an agreement with the family to buy or tender for 93 percent of the voting stock in the company at $135 per share.
Several other bidders subsequently offered a higher price, but the family stuck by our agreement. Among other things, they believed I was the bidder with the best credentials to complete construction on Jim Crosby’s pet project, the Taj Mahal on the Boardwalk. Designed as the largest and most lavish hotel-casino in the world, the Taj Mahal had already gone many millions of dollars over budget and was still nowhere near completion at the time Crosby died.
I hope to have the Taj open by October 1988. In order to create a more efficient operation, I may close the casino in the existing Resorts facility adjacent to the Taj Mahal and use it to service the Taj. Of course, I could always sell it to another casino operator for the right price. Who knows? Maybe Bally or Holiday Inns might be interested.
We ended up raising more than $100,000 for the Annabel Hill fund, which we used to pay off her mortgage and save her farm. To celebrate, we flew Mrs. Hill and her daughter to New York, where we held Trump Tower atrium’s first—and, I suspect, its last—mortgage-burning ceremony.
The owners voted unanimously to appeal the ruling under which the USFL was awarded just one dollar in damages, despite the jury’s antitrust finding against the National Football League. I think the grounds for an appeal are as strong as our original case.
The rink came in at $750,000 under budget and opened a full month ahead of schedule in November 1986. More than a half million skaters enjoyed the rink during the first year. Before the opening the city predicted a major operating loss. For the first full season of operation, we earned almost $500,000 in profits—all of which went to charity.
Lee Iacocca became my partner in the purchase of two condominium towers in the Palm Beach area, which we bought for approximately $40 million. When we took over the project, only a few units had been sold. In a short period of time, operating in a glutted market for condominiums in southern Florida, we sold or sale/leased nearly fifty units and managed to turn a bankrupt operation into a big success story. During the next year we intend to open a major restaurant on the ground level of one of the towers. Among those who’ve bid for the space are the owners of the 21 Club in New York, and Harry Cipriani, owner of Harry’s Bar. Sir Charles Goldstein was dismissed as counsel to Lee before the deal was concluded.
Although we were among the finalists being considered to operate the second-largest casino in the world (after the Taj Mahal in Atlantic City), I thought better of it at the last moment. The idea of running a business which is a twenty-four-hour plane trip from New York City just didn’t make sense—particularly when I have so much to occupy my attention in my own backyard. Shortly before the decision was to be announced by officials in New South Wales, I let them know that I was withdrawing my bid.
The hotel was finally sold to the highest bidder, oilman Marvin Davis, for a price far in excess of what I was willing to pay. After having the property inspected, I kept my own bid low. Of course, should Davis ever choose to sell, I’m sure he’ll earn a profit.
Marvin Davis subsequently became (me of the bidders for Resorts International as well. After I’d already made my deal, he not only offered a higher price but also tried to get the Murphy and Crosby families to renege on their agreement with me. They refused, and the court approved my deal, after which the New Jersey Casino Control Commission also approved it by a 5–0 vote.
Right around the same time, I happened to be at a fabulous party in California thrown by Merv Adelson and Barbara Walters, and a reporter asked me about Marvin Davis’s bid for Resorts. Kiddingly, I said that Davis, who happens to be terribly overweight, should focus on losing 200 pounds instead of wasting time trying to break my deal with Resorts. I heard later that Davis was incensed by my remark, but I can’t say I felt bad. I don’t go out of my way to be cordial to enemies.
In October 1986, several months after construction on our new parking garage had begun, I got an emergency call one morning, just before I was scheduled to make a speech to a group of businessmen in New York. My construction manager, Tom Pippett, was calling. It seemed that the operator of a huge megaton crane had reached his boom out too far for a pickup, and the result was the crane and a twenty-two-ton beam toppled over onto the garage. Pippett told me that a huge section of the garage had literally collapsed. “What about the workers?” I asked. “Was anyone hurt?”
He told me that at least a hundred men had been working on the site and that a head count was under way. I told him to keep me posted, and went off to make my speech, trying to put the issue out of my mind while I spoke. As I was walking out after the speech, I was handed a message from Tom. I called back immediately. “You’re not going to believe this, Mr. Trump,” he said, “but we’ve accounted for everyone, and no one was hurt.”
Losing even one life would have been horrible and devastating. In this case, only the sheer luck that the men at the site happened to be working on another part of the garage at that moment saved their lives.
It goes to show you how fragile it all really is. Those men were very lucky, and so was I.
The job was finished without further incident. In May 1987 we opened 1,200 new spaces in the parking facility connected by a walkway to Trump Plaza on the Boardwalk. During the week that followed, our slot-machine revenues more than doubled—mostly from the increased pedestrian traffic through our facility. By July, we had all 2,700 parking spaces opened, along with the bus terminal and the limousine dropoff—all on time and on budget.
I withdrew my application for a gaming license in Las Vegas. Between Resorts and my two other casinos in Atlantic City, I had enough to occupy me in the casino business closer to home. My focus now is on Atlantic City, but I don’t rule out building or buying in Nevada at some point in the future.
A decision has been made to go into production on two Cadillac-body limousines using my name. The Trump Golden Series will be the most opulent stretch limousine made. The Trump Executive Series will be a slightly less lavish version of the same car. Neither one has yet come off the line, but the folks at Cadillac Motors Division recently sent over a beautiful gold Cadillac Allante as a gift. Perhaps they felt I needed more toys to keep me busy.
I decided not to go forward with the hotel company deal that Drexel Burnham Lambert brought me, and I have continued to keep all my investment banking business with Alan Greenberg and Bear Stearns. It’s been a rough time for Drexel.
I said you can’t bet against Ivana, and she proved me right even sooner than I expected. When the figures were announced for the first three months of 1987, Trump’s Castle had the biggest increase in revenues among all of the twelve casinos in Atlantic City and was the most profitable hotel in town. The Castle took in $76.8 million in those three months—a 19 percent gain over the comparable period during the previous year. Good as that performance is, there is no way Ivana will be happy until she’s far outdistanced the field.
I’ve been continuing to talk to Martin Davis, the chairman of Gulf & Western, about the theaters. In addition, I’ve since purchased a great deal of stock in the department store chain Alexander’s. The chain’s flagship location between 58th and 59th streets and Third and Lexington avenues, next to Bloomingdale’s, is another perfect site for theaters—as well as for a mixed-use commercial and residential skyscraper.
The pool and the tennis court are finished, and both are as beautiful as I’d hoped they would be. As little as I’m interested in relaxing, I enjoy Mar-a-Lago almost in spite of myself. It may be as close to paradise as I’m going to get.
In January 1987, I got a letter from Yuri Dubinin, the Soviet ambassador to the United States, that began: “It is a pleasure for me to relay some good news from Moscow.” It went on to say that the leading Soviet state agency for international tourism, Goscomintourist. had expressed interest in pursuing a joint venture to construct and manage a hotel in Moscow. On July 4, I flew with Ivana, her assistant Lisa Calandra, and Norma to Moscow. It was an extraordinary experience. We toured a half dozen potential sites for a hotel, including several near Red Square. We stayed in Lenin’s suite at the National Hotel, and I was impressed with the ambition of the Soviet officials to make a deal.
I decided against setting up a separate fund to buy distressed real estate, using money raised from outside investors. I don’t mind taking risks myself, but the idea of being responsible for the money of a lot of other people—particularly when they’re bound to include some friends—just wasn’t appealing in the end. For the same reason, I’ve never been tempted to take any of my companies public. Making choices is a lot easier when you have to answer only to yourself.
The renovation on my apartment was finally finished in the fall of 1987. I could afford to take my time, and I’m happy that I did. There may be no other apartment in the world like it.
I finally found a plane. I happened to be reading an article in Business Week in the spring of 1987 about a troubled, Texas-based company named Diamond Shamrock. The article described how top Shamrock executives were enjoying incredible perks, actually living like kings. Among the examples cited was a lavishly equipped company-owned 727, which executives flew around in at will.
I sensed an opportunity. On Monday morning, I called the office of the Diamond Shamrock executive who had been pictured on the cover of the Business Week article. It turned out that he was no longer there and a new chairman, Charles Blackburn, had just been named. I was immediately put through to him, we talked for a few minutes, and I wished him well. Then I said that I’d read about the company’s 727, and that if he had any interest in selling, I was interested in buying. Sure enough, Blackburn said that as much as they all loved that plane, selling it was one of the first things on his agenda. He even offered to send it up to New York, so that I could take a look at it.
The next day I went out to La Guardia airport for a look. I had to smile. This plane could seat up to two hundred passengers, but it had been reconfigured for fifteen, and it included such luxuries as a bedroom, a full bath, and a separate working area. It was a little more plane than I needed, but I find it hard to resist a good deal when the opportunity presents itself.
A new 727 sells for approximately $30 million. A G-4, which is one fourth the size, goes for about $18 million. However, I knew that Diamond Shamrock was hungry to sell, and that not very many people are in the market for 727s.
I offered $5 million, which was obviously ridiculously low. They countered at $10 million, and at that point I knew I had a great deal, regardless of how the negotiation ended. Still, I haggled some more, and we finally agreed on a price of $8 million. I don’t believe there is any other private plane in the sky comparable to this one.
Fortunately, I don’t know the answer, because if I did, that would take half the fun out of it.
This much I do know: it won’t be the same.
I’ve spent the first twenty years of my working life building, accumulating, and accomplishing things that many said could not be done. The biggest challenge I see over the next twenty years is to figure out some creative ways to give back some of what I’ve gotten.
I don’t just mean money, although that’s part of it. It’s easy to be generous when you’ve got a lot, and anyone who does, should be. But what I admire most are people who put themselves directly on the line. I’ve never been terribly interested in why people give, because their motivation is rarely what it seems to be, and it’s almost never pure altruism. To me, what matters is the doing, and giving time is far more valuable than just giving money.
In my life, there are two things I’ve found I’m very good at: overcoming obstacles and motivating good people to do their best work. One of the challenges ahead is how to use those skills as successfully in the service of others as I’ve done, up to now, on my own behalf.
Don’t get me wrong. I also plan to keep making deals, big deals, and right around the clock.