Trump Taj touts newest addition

ATLANTIC CITY - For the company behind the Chairman Tower at Trump Taj Mahal Hotel & Casino, completing it on budget for $255 million came easy.

"That's all [the money] we had," joked Mark Juliano, chief executive officer of Trump Entertainment Resorts Inc., which owns the Taj and two other casinos here, as he gave a tour last week of the new 782-room hotel.

The Chairman Tower, which opened about half its rooms Friday, represents a milestone for Trump Entertainment and its chairman, developer and mogul Donald J. Trump, who did not reach far for inspiration in naming the hotel (there was already that Trump Tower in New York).

"It represents something very positive," Trump said last week. "It's going to be terrific for the Taj."

And none too soon. It is the casino's first expansion in 18 years.

When the $1 billion Taj Mahal opened April 2, 1990, it was billed as the must-see property in Atlantic City for its opulence and over-the-top decor: White concrete elephants, purple and pink carpeting, and gold minarets - a gaming takeoff of the real Taj Mahal in India.

But the casino Taj, which was financed primarily by junk bonds with onerous interest payments, put Trump into a financial abyss. The heavy debt - about $1.5 billion worth - plagued him throughout the 1990s and into this decade, and it hamstrung his casino company's ability to make capital improvements on its three aging gambling halls.

Competitors in Atlantic City expanded around him and ate into Trump's market share. When the Las Vegas-style Borgata Hotel Casino & Spa opened in July 2003 and became the town's new "it" casino, things only got worse for Trump.

By May 2005, Trump's casino company underwent its second bankruptcy restructuring. It secured a $500 million line of credit from Wall Street investment firm Morgan Stanley and hired a new management team that included Juliano and Jim Perry, who was recruited from the former Argosy Gaming Co. as CEO.

In December, Trump Entertainment paid off its loans with Morgan Stanley and obtained a new line of credit for $493.2 million from Beal Bank Nevada.

Half of the company's line of credit went toward the construction of the Chairman Tower, and the rest to refurbish all three Trump casinos.

"They are putting half of their egg - $255 million - into this tower," said Joseph Weinert, senior vice president of Spectrum Gaming Group L.L.C., of Linwood, N.J. "This is going to help the Trump Taj Mahal regain its mojo."

Juliano, 53, a 30-year gaming-industry veteran, took over as CEO after Trump, in vintage fashion, fired Perry last summer. Trump wanted more change, more quickly. Much is riding on the Chairman Tower, and Juliano knows it. But he has been in this spot before.

As former president of Caesars Palace in Las Vegas from 2002 to 2005, Juliano is credited by analysts for resurrecting that casino. He built a new hotel tower there, brought in several name-brand restaurants, dramatically improved its table-games business, especially among high rollers, and signed on Celine Dion, Elton John and Jerry Seinfeld for The Colosseum, its 4,100-seat entertainment venue.

"He managed the final renovations for Caesars to do what it's doing today," said gambling analyst Andrew Zarnett of Deutsche Bank AG in New York. "He was very important for the turnaround there."

Trump gave him the top job last August because of his finesse with a certain group.

"He's really good at handling the high-end level high rollers," Trump said. "They love him. That is a piece of the market we do very well with."

Juliano said the Chairman Tower gave those high rollers an additional place to stay, and adds to a severely underroomed market. The hotel brings the total room inventory in Atlantic City to 17,029. Las Vegas, by comparison, has about 115,000 casino hotel rooms.

He said Atlantic City had to go after upscale customers because it was losing slots customers to Pennsylvania.

"Your higher-end gaming customer will stay in these rooms," he said.

A ribbon-cutting ceremony for the formal opening of the hotel is scheduled for Sept. 18 with Trump and Gov. Corzine planning to attend. A standard room at the Chairman Tower is priced about $40 to $45 higher than in the 1,200-room original Taj Tower. A weeknight stay ranges from $175 to $225, and a little more in the summer. Each room offers a bay or ocean view.

Earlier this year, the company announced the sale of Trump Marina for $316 million to a New York development firm, Coastal Development L.L.C., which plans to turn it into a Margaritaville-themed casino. Juliano said the sale would close later this year.

The company is also currently negotiating with a third party to operate a 35,000-square-foot casino in Panama City, Panama. The Trump Organization, Trump's real estate company in New York, is the developer.

Trump Entertainment is looking for big returns from the 40-story Chairman Tower - incremental cash flow of $35 million to $40 million - it projected in its second-quarter earnings report released earlier this month.

"If they are able to achieve that kind of cash flow, that would represent a return on investment of between 14 and 16 percent," Weinert said. "Fifteen percent is really the bar you want to reach."

The Taj, like every other Atlantic City casino, is struggling against new slots competition from Pennsylvania and New York. It earned $26.4 million in gross operating profit for the second quarter ended June 30, down 1.4 percent from a year earlier. Total "casino win," or gambling revenue, which includes both slots and table games, was down 19.1 percent in July compared with the same month in 2007.

Year-to-date revenue at the casino was down 7.9 percent this year vs. the first seven months of last year.

Contact staff writer Suzette Parmley at 215-854-2594 or

» READ MORE: sparmley@phillynews.com

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