NEW YORK — Is The Donald back?
Picture this: Donald Trump, surrounded by well-wishers, plunges a knife into a large gray-frosted cake shaped like a hunk of Manhattan's elevated West Side Highway. The party last year celebrated city approval of his planned apartment complex near the relocated road.
Fast-forward four months, to Gulfport, Miss., where Trump wants to build a casino. On a steamy July day, dignitaries jam a waterfront party to honor Trump, sipping iced tea, nibbling fried chicken and gazing, awed, at the developer. Moby Solangi, whose company plans to lease land to Trump, later recalled: "We've had the president of Honduras, and the president of Belize, and we got 300 or 400 people. When Trump came, we had 600 or 700."
Trump, the poster boy of the high-flying 1980s who looked like a glossy deadbeat a few years ago, behaves like he's enjoying a financial resurrection.
He is regaining control of his three casinos after they underwent bankruptcy reorganization. He is snapping up Palm Beach real estate for a luxurious club. Within months, the man who brought you the Trump Tower probably will introduce another namesake: the Trump Stock.
"The business is doing so well. People perceive it as this great comeback," Trump, 47, said in an interview at his Trump Tower offices, decorated with pictures of Trump casinos and magazine covers of Trump.
A peek behind the curtain of Trump hyperbole suggests a different story. Two of his casinos lost money for much of last year, and they still carry enormous debt. Bankers and some bondholders have lost tens of millions of dollars in Trump's ventures. It's unclear whether Trump himself has enough money for a major new project, although he claims otherwise.
Yet, Trump deals on.
How does he do it? Strong financial markets, a recent improvement at his casinos, and Trump's own perseverance are some reasons.
But the most important may be the Trump name. Like J.P. Morgan or John D. Rockefeller, Trump has transformed his name into a symbol of success--a myth that transcends the rockier reality. Even as his backers have experienced the Mr. Toad's Wild Ride of investing, Trump has maintained a mystique.
"He has a name that is really magic in the marketing world," said Richard Kahan, an urban development expert who agreed to support Trump's Manhattan apartment development.
Some of Trump's latest activities:
* He is expected to offer stock in his casinos over the next three to four months. Securities analysts say Trump may raise tens or even hundreds of millions--though some estimate that the casinos aren't worth more than their debt.
* Governments in Gulfport, Miss., and Gary, Ind., are supporting Trump's casino projects--even though Trump said he won't use his cash. "It just would be foolish to do that," he said. "If you have a good project, the bondholders like Trump."
* Community groups are teaming with Trump to support his 5,700-apartment project in New York. Trump is planning a novel way to guarantee financing: ask Uncle Sam.
Trump is proceeding even though he apparently didn't have enough money to pay New York taxes on the apartment property over the past year. He owes $6 million in taxes and $700,000 in interest dating to January, 1993, said city Finance Department spokesman Joe Dunn. Trump said he has reached a repayment accord. Dunn said there is no accord yet.
Only two years ago, Trump looked financially humiliated. His property empire built on borrowed money was devastated by the recession and the real estate market collapse. His Atlantic City casinos and elegant Plaza Hotel in New York all sought bankruptcy protection.
Facing enormous debts, Trump surrendered properties ranging from his Trump Shuttle airline to his yacht--featuring a bedroom with a tortoise-shell ceiling and solid onyx shower.
"The fact is, I had 15 incredible years, and then the world went into a depression, plus I probably wasn't working as hard or focusing as much as I was before, in all fairness," Trump said.
"I realized I now had to focus totally and exclusively on this. I did. And it just worked out great."
For him, maybe. But Trump admits his banks forgave some loans. While he won't say how much, the banks wrote off millions of dollars, judging from his financial documents. Banks may lose even more as they sell Trump properties they took in exchange for loans, one bank source said, speaking on condition of anonymity.
Trump's creditors could have tried to seize his assets. Instead, they bargained, anxious to avoid years of costly litigation and the possible loss of the Trump name, which they felt drew gamblers to Atlantic City.
Trump was forced to relinquish a half-interest in his casino-hotels and in the Plaza hotel to creditors.
Not for long.