As Trump appeals to black voters, Gary recalls casino deal
Posted September 21
GARY, Ind. — 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."
Chart the path Donald Trump and Hillary Clinton must take on the Road to 270 to reach the White House with AP's Electoral College interactive map: http://elections.ap.org/content/road-270-0
Biesecker reported from Washington.
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