Trump: The Greatest Show on Earth: The Deals, the Downfall, the Reinvention by Wayne Barrett

Author:Wayne Barrett [Barrett, Wayne]
Language: eng
Format: epub
Tags: Biographies & Memoirs, Leaders & Notable People, Political, Rich & Famous
ISBN: 9781942872979
Google: ZQ_9CwAAQBAJ
Amazon: B01ECV4H0G
Barnesnoble: B01ECV4H0G
Goodreads: 29928473
Publisher: Regan Arts.
Published: 2016-04-25T23:00:00+00:00

There are a variety of versions of the events that led to Donald’s lucrative partnership with Harrah’s. Trump’s favorite is that he “had never thought of a partner in Atlantic City” until Holiday Inn’s chairman Mike Rose told him their Harrah’s subsidiary was interested in becoming one. Donald claims he told Rose that he had the site, the financing, the license, and the approvals—“what do I need you for?” But Phil Satre, Harrah’s president, countered in an affidavit that it was Trump who first raised the possibility of a partnership with Rose, and even Trump staffers acknowledge that Harrah’s examined Trump’s early plans for the project and balked. Contrary to his claimed indifference to the need for a partner, Donald had asked Paul Longo as early as 1980 or 1981 to find him one, and Longo had approached Harrah’s. In fact Donald had spoken so openly about a partner that he’d even told Ed Colanzi, hardly a confidant, that he was actively looking for one.

However they began, the talks with Harrah’s ended successfully by June of 1982, three months after Trump Plaza was licensed. With the project barely under construction, Donald signed a contract with the gaming giant that may have been the single best deal of his life. Harrah’s agreed to pay him $22 million up front to cover his supposed project expenses, including a $2.3 million supervisory and overhead fee for himself together with nearly a million in legal fees, mostly for Dreyer & Traub, who handled virtually all his varied real estate matters. The $22 million was part of a $50 million investment that Harrah’s agreed to make from its own funds. Under the agreement, Trump would build the casino and collect a construction fee, while Harrah’s would operate it and share half the profits with Donald. Harrah’s was even willing to guarantee Donald against operating losses for five years.

Little did Harrah’s realize that had they waited to sign the deal for a few weeks, Trump would have had to halt the limited construction activity then going on at the site, since he would have literally been out of money. Haunted by the rusting Guccione beams next door, a stalled Donald might have been forced to deal on Harrah’s terms. What Harrah’s didn’t know was that Donald was fishing for financing everywhere, even traveling with Drexel Burnham Lambert’s casino consultant Daniel Lee out to Los Angeles to meet junk bond king Mike Milken for the first time—a pilgrimage described in Drexel inner circles as “kissing the ring of the Pope.” While willing to consider financing his casino, Milken advised him, without any prodding, on the inapplicability of Milken’s junk bonds to Trump’s main line of business—Manhattan real estate projects.*

That lesson behind them, Milken, Trump, and Lee continued detailed talks over the succeeding weeks. Milken wanted Donald to come up with a $30 million equity investment in the project and to sign a completion guarantee. Donald was resistant to both demands, seeking 100 percent financing. In the middle of these negotiations Donald suddenly announced to a surprised Milken the terms of Harrah’s offer.

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