- Famous Atlantic City casino cost a mammoth $1.2 billion to construct in the 1990s
- Hard Rock International has purchased the building for fraction of that price
Built in the early 1990s in a wave of hubris, ostentatiousness and all the other qualities that are synonymous with erecting a grandiose casino, the famous Trump Taj Mahal cost an impressive $1.2 billion to construct.
The Atlantic City resort, whose entrance bears a carving of now-President of the United States, Donald Trump was sold in March to a group of investors that includes Hard Rock International following much debate, discussion and decision making.
But, the figure that it’s finally sold for may not be exactly what you’d expect, or indeed what President Trump would have guessed during the time he was involved with the property.
The eighth wonder of the world
When it opened in the early 90s, the Trump Taj Mahal casino resort was referred to – in typically grand fashion – by Trump himself as the “Eighth Wonder of the World”.
However, its last owner, Carl Icahn – who acquired parent company Trump Resorts International last year – decided to offload the casino in October saying that he could see no way in which the venue would make a profit. It was at this point that many began speculating that the property was likely only going to fetch a few cents in the dollar of its original market price.
And, although Ichan’s deal to sell to Hard Rock was announced in March, the exact details weren’t accessible until now as documents filed with the US Securities and Exchange Commission have become available.
No direct association with Trump
Although the Taj Mahal casino hasn’t had any direct association with Donald Trump since 2009, the fact that it still bears his name and imprint has caused many to still link it with the polarising US president.
And, as the sales figures are finally released one can only question whether a few onlookers will possibly feel just a touch of schadenfreude upon learning of the casino’s sale price, even if it makes absolutely no difference to Donald Trump or his net worth.
Despite having acquired the Trump Taj Mahal for a fraction of the price it cost to build, now owner Hard Rock will have to roll its sleeves up if they’re to see a return on their thus far modest investment. In addition to the hundreds of millions of dollars that the renovation and rebranding exercise will cost – estimated by the business to be around $375 million – there’s the small matter of a rumoured $224 property tax bill that the resort’s new owner will also be expected to foot.
Sells for four cents on the dollar
Those two figures, however far outweigh the incredibly small price that Hard Rock picked up the building for. If you’re wondering what it is, and thinking somewhere north of $1 billion, you need to head south. Way south.
In fact keep going south till you hit $100 mill and then keep going souther still…
That’s how much Hard Rock International snapped up the Trump casino for. It doesn’t take a maths genius to deduce that this is a meagre fraction of its original valuation.
With (plenty) of cash to spare, Hard Rock International is not planning to rest on laurels. The business, which is owned by the Seminole Tribe of Florida, has earmarked 2018 for the casino’s relaunch. It’s safe to assume that there won’t be many monuments left to Donald Trump by the time the casino’s new owners have finished making it their own.
It was Donald Trump who – now famously – once wrote The Art of the Deal but, in this case, it appears that the Seminole Tribe has mastered the art. We concede, Trump no longer has any direct link to the Taj Mahal Casino but, being such a divisive figure it’s only natural he is going to be at the centre of stories like this. Mostly because one can’t help wonder what he would make of the $50 million that the Taj Mahal has sold for.
Make no mistake, in the casino world that’s a pretty small feature and, if he hasn’t bigger things to worry about at the moment, one that Trump would likely not be smiling about. That being said, this is the same man who tweeted in 2014 that no one gives him the credit he deserves for getting out of Atlantic City ‘before its demise’. Bearing that in mind, perhaps he may not be as shocked as others in the industry seem to be.
What happens from hereon in is anyone’s guess, but what’s for sure is that Hard Rock International has a lot of work to do.
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