Two Way Hard Three | Las Vegas Casino & Design Blog

June 29, 2011

Trump selling Steel Pier reveals much

Posted by daveschwartz

The Wall Street Journal is reporting to day that Trump is looking to sell the storied Steel Pier, which currently houses an amusement park.

The current incarnation of Steel Pier dates to the early 1990s. As it is right now, Trump leases the pier to a third party who operates the rides and games. When the Taj first opened, Trump used the pier as a heliport; he'd shuttle back and forth from NYC in a helicopter. I remember reading the SOPs for helicopter landings in an old security manual when I started at the Taj back in 1994.

Jen A. Miller has pointed out that this isn't the first time changes have been proposed for the site, and a little bit of googling reminds me that I let loose with a "log flume" blast when asked about a possible redevelopment 5 years ago.

Back in 2004 I wrote an AC History column for Casino Connection about the history of Steel Pier. I've reproduced it on my own site, right here, if you want to read some of the pier's fascinating history. My final AC History column was about Tony Grant, whose career was deeply intertwined with the pier.

Turning from history to current events, I want to focus on the justification for selling Steel Pier:

"We believe selling the Pier through auction is the best course of action for the company to increase the equity value for our shareholders," said Brian Cahill, a spokesman for Trump Entertainment. "We are a gaming company, and Steel Pier is not part of the casino." (bolding is mine)

Nothing could be further from the truth. The company's name is Trump Entertainment Resorts, not Trump Gaming. Though I'll point out here that, as of today, the company is still listing a casino that no longer exists as one of its fine resorts (the link gets redirected to the Golden Nugget site).

Still, the idea is that the company is supposed to be offering more than just slots, particularly at its flagship resort. People have been beating the drum for diversification of the travel offerings in Atlantic City for thirty years now. If an oceanside amusement park isn't exactly the kind of family destination that needs to be tweaked and improved to draw a bigger clientele and to take advantage of an asset that Pennsylvania (and Vegas, for that matter) can't beat, I don't know what is.

To me, Steel Pier is symbolic of the failures of the casino industry in Atlantic City. When it was being built, a bridge over the Boardwalk to Steel Pier was considered one of the marquee attractions of the Taj. This would have hosted a restaurant or nightclub offering tremendous views of the Boardwalk. I can only imagine how great it would have been to sit down for a meal or go out for a night of dancing with the lights of the Boardwalk and the ocean waves surrounding you.

Because of money problems, the "Bridge Restaurant" was never finished. Back when I was working security at the Taj in the mid-1990s, there was a little sign pointing people towards the BRIDGE RESTAURANT in the back of the house. Some wag scrawled "to nowhere" after "BRIDGE," and if it's still there I'd love for someone to snap a photo and share it with me; that little piece of graffiti sums up just went wrong in Atlantic City. Operators spent money, but didn't follow through, and as a result didn't use some of their best assets.

If there's one thing a company with the name "Trump" on it should be good at, it's real estate development and getting deals done. I'm dumbfounded that, in the past 21 years, no one was able to swing a deal that would get the bridge restaurant finished or find a better use for Steel Pier that would incorporate amusements but add a unique twist.

Add to this that the casino's already taken on the sunk costs of constructing a bridge to the pier, and you've got to ask: why aren't you making better use of the pier? It's like Harrah's not using its marina; I just don't get it.

If I was calling the shots at the Taj, I'd work on finishing the bridge restaurant and start looking for a new operator for the pier. You've got five years before the lease with the existing operator is up, so there's plenty of time. I'd look for someone who would invest some money to create an attraction that would really draw people--maybe some kind of diving bell off the pier--and would complement amusements and whatever else you want to have. That was you give people a reason to drive all the way to Atlantic City, but also have some lighter fare for whose who have already seen it.

As a gaming destination, Atlantic City has a pretty bleak future. As a resort/leisure/entertainment destination? There, at least, it has a fighting chance.


Read archived comments (4 so far)
June 30, 2011 5:03 AM Posted by jinx

Well put, it is absolutely baffling that companies can't seem to take advantage of their assets or think outside of the proverbial box when it comes to Las Vegas, AC, or anywhere else.

They wait and wait until someone else does something and then copy it and call it new. So depressing to watch.

June 30, 2011 11:43 AM Posted by dave202

But Harrah's is NOT using its marina. When the property was built in the 1980s, it included a Marina. 10 years ago, the marina was dismantled and the name was changed to Harrah's AC.

Perhaps you were thinking of Trump Marina, which indeed used the state marina to its fullest until the property was recently sold to the Golden Nugget.

But I completely agree with your premise. The "new" AC is supposed to be about much more than just gaming. The announcement of this sale is confusing. And the asking price is even more confusing. How can $2.5 million really contribute to the equity value of the shareholders when the company is more than $300 million in debt?

July 1, 2011 1:10 PM Posted by Dave

^ Exactly. I said, "It's like Harrah's not using its marina; I just don't get it.."

I still don't understand why they aren't using their marina.

July 6, 2011 3:30 PM Posted by American Gaming Guru

Well said Dr. Dave. I was so disappointed to read that article on their intentions to sell Steel Pier. Lets not forget that Trump now owns less than 10% of the company. Additionally, he really gave up interest in the company quite some time ago (2 bankruptcies ago?). Anyway, I would argue further that this company is anything but an entertainment and/or gaming company. It is one big garage sale if you ask me! The current owners (bondholders) want recover-ability on their inherited investment. It is truly shameful that Donald could care less. They clearly are not focused on operating a better and more attractive business.