James Perry is backed by money, new management, and Donald J. Trump, but more will be needed to run the developer’s ailing Atlantic City casino.
“You need Job’s patience because it always takes longer than you think,” said Perry, who stepped down from retirement over the summer to become chief executive of the Trump Taj Mahal, Trump Plaza, and Trump Marina Casino. “This is not going to happen overnight.”
Perry and Chief Financial Officer Mark Giuliano face the daunting task of reversing the decade-long decline of Trump casinos in a fierce gambling market.
The Trump property, which opened in the mid-80s as customers’ tastes and Atlantic City changed, did not. As a result, it lagged behind not only in its new attractions but also in its appearance.
The October sales figures released yesterday by the New Jersey Casino Management Board showed how far they have to go. 온라인카지노
Overall, the 12 Atlantic City casinos recorded revenues of $428 million, up 10.2 percent from October 2004. All three Trump casinos recorded total revenues of $86.3 million in October, down 11.6 percent from the same month a year earlier.
Of the three Trump casinos so far this year, only the Trump Taj Mahal has seen revenue increase. Year-over-year revenue for the Taj Mahal is up 2.2 percent from a year ago, while the Trump Plaza and Trump Marina are down 3.9 percent and 4.9 percent, respectively.
Borgata, two and a half years old, was once again the city’s top grossing casino, grossing $63.3 million last month. The Taj Mahal came in fourth with $43.1 million. Trump Plaza ranks ninth among 12 casinos with $25 million, while Trump Marina ranks second with $18.2 million.
“Companies need credibility,” Perry said in a recent interview in the Taj Mahal, Trump’s flagship property that opened in April 1990 and the source of many of his financial problems in Atlantic City. “Companies need to energize themselves as operators.”
In May, Trump Entertainment Resorts Inc. emerged from bankruptcy with a $500 million credit loan from Morgan Stanley to upgrade the Atlantic City casino it needed and expand into other gambling markets, including Pennsylvania.
Barbara J. Capaert of KDP Investment Advisors, a high-yield debt research firm based in Montpier, Vt., said, “The transition from cash saving and sufficient financing to growth and rehabilitation mode is difficult. It’s going to take time.”
Trump says he wants to team up Perry, who is known for his balance sheet organization in the industry, and Giuliano, who is known for his capital reinvestment moves, to throw a one-two punch at the casino.
“This is a great team,” Trump said yesterday, “and they’re going to take those attributes to a level they’ve never seen before.”
Perry, 58, was honest with Trump that it would take at least three years for a turnaround. He said Trump empowered him.
“Mr. Trump told me three things, ‘No. 1, I want to be proud of these properties. No. 2, I want them and the people in them to succeed. No. 3, I want to divest the company,'” Perry said.
As a condition of a reorganization proposal approved by a bankruptcy court earlier this year, Trump was forced to step down as CEO of Trump Entertainment, which runs his casino. He retained his position as chairman.
Trump has accused him of paying huge interest on junk bonds used to finance his crown jewel, the Taj Mahal, which failed to reinvest in real estate.
His casino this summer finally got new carpets and slot machines. Hotel rooms and suites have been renovated. Public spaces are being redesigned. A new $150 million hotel tower is under construction for the Taj Mahal.
“We need to physically speed up our hotels and transition them from survival to growth mode, which we like,” said Giuliano, 50, a former president of Caesars Palace in Las Vegas, a building known for its elegance and ability to turn off high rollers. He is sharing about Perry’s pragmatic approach.
“These hotels are no different than any other,” he said. “People have expectations. If you meet or exceed them, you build brand loyalty and make repeated visits.”
However, Capart said Trump casinos need to reduce their reliance on one-day bus crowds and cash promotions such as free coins or slot cards, which typically consist of low-cost slot players who don’t spend a night there.
Argosi Gaming, a riverboat casino operator located in Alton, Illinois, received high leverage and nearly went bankrupt like Trump Casino. In 2000, Argosi was named gambling company of the year, and Perry was named CEO of the year. He retired from Argosi in 2002.
“He has that vision and the ability to articulate what needs to be done,” said Virginia McDowell, who started last week as Trump’s vice president and chief intelligence officer. She is one of only a handful of former Argosi executives that Perry brought to Trump.
Argosi was recently acquired by Wyoming, Pennsylvania, and the company is rumored to be interested in buying one of the Trump casinos. Neither Penn National nor Trump officials deny the interest.
“If someone comes in and suggests more than what you think you can get, as an open company, you have a responsibility to check it out,” Perry said.
Last week, Trump Entertainment finally agreed to sell the Riverboat Casino in Gary, Indiana. Perry said the net $227 million from the sale would go toward an improvement of the Atlantic City Casino and an expansion project, including a potential Trump casino in Philadelphia.
Giuliano said the Trump brand is getting a premium because of the success of Trump’s TV show Apprentice.
“It’s very difficult, if not impossible, to separate their identity from Trump,” he said of the casino. “They are still a must-see attraction in Atlantic City because of the name Trump. All they have to do is bring it in the next century.”