In Gary, Trump deal a bad bet
Civic leaders hard-hit Ind. city recall ‘slick’ pitch to help in
GARY, Ind. — Donald Trump swooped into Gary on his private jet and pledged to make the downon-its-luck city great again.
It was 1993, and the New York mogul was wooing officials in the mostly black city to support his bid to dock a showboat casino along a Lake Michigan shoreline littered with shuttered factories.
Trump and his representatives later told state gaming officials he would leverage his “incomparable experience” to build a floating Shangri-La, with enough slot machines and blackjack tables to fill city coffers and local charities with tens of millions each year, while creating scores of well-paid jobs for minority residents.
“We are looking to make this a real peach here, a real success,” Trump said of the project.
Today, as the Republican presidential nominee pursues black voters with vows to fix inner-city troubles, many Gary residents say his pitch to solve crime and poverty is disturbingly familiar.
Little more than a decade after investing in Gary, Trump’s casino company declared bankruptcy and cashed out his stake in the boat — leaving behind lawsuits and hard feelings in a city where more than onethird of residents live in poverty. Trump’s lawyers later argued in court that his pledges to the city were never legally binding.
Trump said his venture was good for Gary. Local civic leaders disagree. Donald Trump’s casino deal left a series of broken promises, lawsuits and hard feelings
“What you had was a slick business dealer coming in,” said Roy Pratt, a Democratic former Gary city councilman. “He got as much as he could and then he pulled up and left.”
Just 30 miles southeast of Chicago, Gary’s fortunes fell with the steel industry. The remaining 77,000 residents abide persistent crime and chronic unemployment.
In a presentation to the Indiana Gaming Commission in 1994, Trump’s team touted his “superior marketing and advertising abilities” to pitch a 340-footlong vessel called Trump Princess with more than 1,500 slot machines.
To sweeten the pot, Trump’s representatives said they would try to ensure that at least two-thirds of the casino’s staff would be minority residents from the surrounding area, according to a transcript. He offered to fund a new charitable
foundation endowed with casino stock worth $11.5 million. His official proposal also listed eight “local minority participants” in the project, a diverse group of Indiana businessmen.
The state gaming commission eventually awarded Trump a casino license. A May 1996 agreement signed by the Trump organization said the developer would “endeavor” to fill 70 percent of its 1,200 full-time jobs with minorities. Trumpwas to invest $153 million.
The eight business partners in Trump’s license application had been offered a chance to buy shares worth more than $1 million, but most didn’t have the money. So both sides negotiated a deal — for no cash up front — offering the group 7.5 percent of the stock for the riverboat and another 7.5 percent into a trust for charity. in its wake, say civic leaders
However, the men said Trump reneged once the licensewas approved. None got stock in the casino, and the money for charity was less than promised.
All eight sued for breach of contract, alleging they weredumpedafterTrump’s licensewas approved.
As construction proceeded in spring 1996, Trump’s company began hiring in advance of the casino’s grand opening in June. But his commitments to hire minorities and local firms never came to fruition, according to local leaders.
“It simply did not happen,” said Richard Hatcher, aDemocrat whowas Gary’s first black mayor.
Hatcher helped bring a 1996 lawsuit alleging Trump’s organization had only hired about 20 percent minorities. Though more than half of Trump’s casino staff was eventually made in Gary, Ind. The riverboat
up of racial minorities, the lawsuit said blacks were relegated tominimumwage jobs. Trump’s lawyers argued the minority hiring goals were not legally binding and succeeded in getting the lawsuit dismissed.
Theother lawsuit, filed in federal court by the eight jilted business partners, continued. Six of the men dropped out of the case after Trump’s company agreed to pay them a combined $2.2 million, but two refused to settle.
The jury awarded them $1.3 million. But Trump appealed, and in 2001 a federal appeals panel overturned the jury’s award, saying their agreements with Trump’s company had not been legally binding.
In 2004, Trump Hotel & Casino Resorts Inc., the parent company of the Gary casino, sought Chapter 11 bankruptcy protection. Trump sought to restructure is still open.
$1.8 billion in debt, much of it tied to hotels and casinos in New Jersey and NewYork.
Trump sold his company’s stake in the Gary casino the following year for $253 million.
Through his spokeswoman, Trump said he stood by his record.
“It worked out very well and was very good for Gary,” Trump said.
The riverboat is still docked in Gary’s industrial harbor. On a recent workday, a sparse crowd lined up for the serve-yourself soda and coffee between games.
Asked about Trump’s recent “What do you have to lose?” pitch to black voters, former Indiana gaming commissioner David Ross said itwould be a bad bet.
“What you have to know is that Trump is for Trump and he’s not for any black voters or anybody,” Ross said.