click to enlarge Donald and Marla Trump tour the new Trump Casino in Buffington Harbor in July 1996.

Sun-Times

Donald Trump has presented himself as the only presidential candidate with the experience and drive to rescue those Americans left behind by globalization. Amazingly enough, Gary, Indiana, a steel town that had faced agonizing decline over the last 50 years, played a part in saving Trump. As Indiana prepares to go to the polls May 3, it's useful to consider what, if anything, Gary got in return.

Trump's public relationship with Gary began with an astonishing admission of the social costs of his own business. In March 1989, Trump visited Chicago to promote his yet-unopened Atlantic City casino, the Trump Taj Mahal. Asked about the push to bring legalized gambling to Gary, Trump offered his opinion that Chicago and Gary would be bad places for casinos. The week the Taj opened, Trump told the Chicago Tribune that gambling had "not been the savior of Atlantic City. But it's certainly been good to a couple of casino companies." After 12 years of legalized gambling, "we still have slums here."

Both the city of Gary and Resorts International Holdings, a Trump competitor lobbying to legalize gambling in Indiana, argued that Trump was attempting to protect his massive investment in Atlantic City. For all of Trump's public concern about the well-being of Atlantic City, the Taj recruited workers not only from Gary, but also from as far away as Puerto Rico and Ireland for hospitality positions that paid as little as $6.25 an hour.

If Trump had been worried that Gary might be developed into a casino town that would eventually threaten his ambitions to remake Atlantic City into a national destination, his fears were misplaced. Financed by high-interest junk bonds, the Taj Mahal would need to clear $1 million a day to remain solvent. Trump had wagered that Atlantic City and the American economy would boom.

A little more than two months after opening the Taj, the Trump Organization missed $73 million in debt payments to banks and bondholders. By March 1991, the entire Trump corporate empire was in a state of noncompliance on $1.1 billion in loans. All three of Trump's Atlantic City casinos eventually filed for Chapter 11. Threatening his lenders with endless litigation, Trump was able to hammer out an agreement in which his personal debt of $900 million would be deferred until June 1995.

Meanwhile, Indiana had legalized casino gambling on boats in summer 1993. Indiana lawmakers refused to concentrate casinos in one depressed city, so Gary was rewarded with only two gaming licenses. In September 1993, Donald Trump arrived in person at Gary City Hall "to see about a riverboat."





Although his casinos were still very deep in debt, Trump had sought to own or manage additional casinos not only in Indiana, but also in New Zealand, Ontario, Louisiana, Mississippi, Alabama, Missouri, and Nevada. The stakes were high. In November 1993, the Wall Street Journal reported that Trump had been negotiating with his lenders to retake full ownership of his casinos so that he could make a public offering of the Atlantic City resorts and retire his remaining personal debt. Multiple analysts agreed that it would very difficult to sell investors a stake in one or all of Trump's Atlantic City's debt-ridden casinos alone.

That December, Trump gave a presentation that featured a 48-square-foot model of his proposed casino boat and a video of Tina Turner singing "Simply the Best." Explaining his past statements about Gary were "a guesstimate," Trump said he'd concluded that the town needed gaming "a lot more than it did five years ago" after talking to multiple community leaders. Trump bragged he ran the largest casino operation in the world. He didn't mention his lingering financial problems: according to Newsday, all three Atlantic City casinos were still $1.5 billion in debt.

By Trump's side in Gary was lobbyist Scott Pastrick, the son of one of the region's most powerful politicians, East Chicago mayor Robert Pastrick. The Post-Tribune of Northwest Indiana noted that Trump evaded the issue of how his project would be funded while fielding easy questions from the audience members, some carrying signs reading "Trump + Gary = Jobs."

The Trump Organization spent nearly $1 million on its Gary proposal, according to Vanity Fair. But unhappy with his previous treatment of the city and bothered by his lack of guarantees for local economic opportunities, in January 1994 Gary gave Trump third place in its recommendations for a casino license.