GARY, Ind. (AP) -
Donald Trump swooped into Gary, Indiana, on his private jet and pledged to
make the down-on-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 the problems
of crime and poverty is disturbingly familiar. Like others who have done
business with Trump, they say their experience offers a cautionary tale.
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 one-third of residents live in poverty.
Trump’s lawyers later argued in court that his pledges to the city were
never legally binding. Trump told The Associated Press that his venture was
good for Gary.
Local civic leaders
disagree.
“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.”
Gary is a victim of
the economic shifts Trump has bemoaned on the campaign trail. 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-foot long 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. Trump was 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.
However, the men
said Trump reneged once the license was 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 were dumped after Trump’s license was
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 businesses never came to fruition, according to local leaders.
“It simply did not
happen,” said Richard Hatcher, a Democrat who was Gary’s first
African-American 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 up of racial minorities, the lawsuit said blacks were
overwhelmingly relegated to minimum wage jobs, such as valets and janitors.
Trump’s lawyers
argued the minority hiring goals were not legally binding and succeeded in
getting the lawsuit dismissed.
The other 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 $1.8 billion
in debt, much of it tied to hotels and casinos in New Jersey and New York.
Trump sold his
company’s stake in the Gary casino the following year for $253 million.
According to financial disclosures, the proceeds from the sale were used to
shore up the financial condition of Trump’s other casino and resort
properties. Through his spokeswoman, Trump told the AP he stood by his
record.
“It worked out very
well and was very good for Gary, Indiana,” Trump said.
The riverboat is
still docked in Gary’s industrial harbor. On a recent workday, a sparse
jeans-and-sweat-pants 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 it would 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. “What he’s looking for is to make some money for
Trump."