Twin Villains

Donald Trump and Chris Christie, the Twin Villains of Atlantic City

Residents of the nearly bankrupt boardwalk town gripe about the mogul's failed casinos and the governor’s power play. 

By Amy S. Rosenberg

Earlier this month, at the very moment Donald Trump was naming Chris Christie to head a still-theoretical presidential transition team, Bill Dilorenzo, an Atlantic City fire captain, was inside the Ducktown Tavern worrying if his city was about to go belly up.

The Ducktown, a bar located a few blocks from a Boardwalk whose dead center is still a fossilized former Trump Plaza Casino, stripped of all Trump branding by order of a judge, was one of several bars to offer discounts to police and firefighters while their paychecks were deferred to keep the city afloat. (The bar had also offered $1 Fireball shots to anyone signing a petition against a state takeover sought by the governor.)

The Friday before, city workers had gotten paid for the first time in a month. Now the Ducktown was packed with cops and firefighters. It escaped no one’s attention that two of the men most enmeshed in the near death spiral of the seaside resort town—the debt-saddled casino owner whose multiple corporate bankruptcies had foretold if not hastened the city’s financial misfortune and the governor whose latest plan to rescue the city sounded to many like a politically driven death warrant—had found common cause on the national political stage.

“We’re the smokescreen,” Dilorenzo, president of the firefighters Local 198, which has been fighting a bill that would give the state the right to terminate union contracts, said over a turkey club and an iced tea. All the focus on the unions, he said, is just a way for Christie and politically connected developers to take control of coveted assets, like the city’s Water Works, and to divvy up those yawning parcels of undeveloped waterfront land. Few in that darkened bar would disagree. For that matter, few in Atlantic City would disagree. “Bruce Springsteen Hates Both of You” read a sign at a recent rally Trump held in New Jersey to raise money for Christie’s presidential campaign debt, a twist on the placard that has for years dogged Christie, a devoted fan of the Boss.

As Trump and Christie forged an unlikely political alliance—one of them a brash outsider promising to bring lost American jobs back home and the other an uneasy sidekick whose career has been both propelled and derailed by a similar petulance—Atlantic City is the one place in America that has been most clearly shaped by the both of them.

Atlantic City, as much as his native New York, was the place where Trump staked his career and made his reputation—opening three casinos in the 80s and early 90s, and establishing himself as the biggest name on the Boardwalk. But he was also the first developer to run into trouble when competition sucked away customers and profits with them. Trump has recast his bankruptcies as brilliant business maneuvers, timely exits from a city in distress. But the unemployed workers and the contractors who recouped pennies on the dollar weren’t applauding.

For Christie, too, Atlantic City’s slide into insolvency has challenged his ability to slay deficits not to mention his ability to impose his will throughout the state. He came into office in 2010, the year after Trump’s final bankruptcy and the beginning of a six year slide that has seen the city’s tax base tumble by two-thirds. But Christie’s proposed solutions led to bitter battles with Democrats in the state legislature and even Atlantic City’s Republican mayor, who likened Christie’s plan to a “fascist dictatorship.”

On Friday, just before the Memorial Day weekend, Christie signed two bills that give Atlantic City 150 days to come up with a plan to balance its budget and hold back the onerous takeover threatened by the state. The bills redirect tens of millions of dollars in aid to the city from casinos, a state loan and other sources. For the time being, it will stave off a municipal bankruptcy that arguably would have hurt the governor more than the city of Atlantic City. Whether the emergency bills will give the city enough breathing room to right its finances for the long-term is anyone’s guess. (And the city still must fight off a Christie-backed referendum on the ballot in November that would bring two casinos to North Jersey, which Atlantic City casino executives warn could lead to as many as five more casino closings in the seaside town.) But there’s more certainty about the men who have been called the city’s twin villains.

“Trump and Christie have one thing in common regarding Atlantic City,” says Frank Becktel, a jitney driver and Atlantic City loyalist suffering along with the rest of the town in its hour of need. “They both knew how to squeeze a buck out of us and leave us for dead.”

Well, maybe on life support.

If you want to know what a Trump-Christie playbook looks like, go no further than this iconic city by the sea, says Councilman Moisse “Mo” Delgado, a native of a place that has long attracted outsized personalities, from Nucky Johnson, boss of the Atlantic City Prohibition-era political machine, to Mr. Peanut, the monocle-wearing mascot from the 1930s.

It’s still a place that fills up most weekends with roving bands of bachelorettes and bros in search of bottle service even as the local government may go belly up and politicians argue over the details. It’s a broke city where four casinos closed in 2014, but one where last year gamblers still left behind $2.6 billion in the eight surviving casinos.

What Trump left behind is a hotly debated subject.

“Trump, he smiled and did a few things,” says Delgado. “And did things behind closed doors, back room deals, to make sure he kept his power. He had a lot of people shaking in (their) pants here in Atlantic City because of his influence. When that influence started dissipating, he no longer wanted to be here. If he can’t rule, he doesn’t want to stay.”

But for many, leaving wasn’t an option.

“In a business way, he’s brilliant,” Delgado said. “He protected his assets. He protected himself. He left everyone else, the employees, the community, everyone else holding the bag.”

At one time, Atlantic City was the only place to gamble on the east coast. But the spread of casinos in neighboring states gutted the city’s coffers. From a peak of $5.2 billion in 2006, the city’s casino industry has lost half its annual revenue. As casinos lost money, they appealed their tax assessments, leaving the city with $400 million in debt and its largest taxpayer, the Borgata Hotel & Casino, withholding quarterly taxes against the $150 million it alone is owed. The city barely avoided default earlier this month.

But the battle over how to save Atlantic City from becoming the first city in New Jersey to go bankrupt since Fort Lee in 1938 has been excruciating -- and long.

Mayor Don Guardian and others have argued that Christie has had control over the town since 2010, and if it’s in worse shape now, the state has itself to blame. Some think the intervention up until now has been designed to force a more draconian takeover that gives the state control of union contracts and city assets, including its Water Works, sought after by at least two politically connected private firms.

The city, which sends about $55 million to the state in hotel, luxury tax and parking fees, nearly had to shut itself down after the state refused an $8 million bridge loan in late March. (The shutdown was averted when municipal employees agreed to defer their paychecks for a month.) Guardian is still waiting for the $33.5 million in “Casino Redirected Alternative Payment” the state told them to budget and assured was coming. The line item’s acronym is not lost on anyone. Guardian personally thanked many of those who showed up in May to pay quarterly taxes.

Christie’s previous moves in Atlantic City did little to prevent the current crisis. He jump-started the Revel casino in 2011 with $261 million in state tax incentives, only to see that $2 billion casino go bankrupt and close in just over two years. He created a state-run tourism district that prompted cries of apartheid by then Mayor Lorenzo Langford, but also failed to stave off the closure of four casinos along the Boardwalk. Dreams of remaking sections of Pacific Avenue as something other than a pock-marked strip of boarding homes and corner stores remain stuck in power points.

Two years ago, Christie stirred up talk of bankruptcy by appointing Detroit’s former emergency manager, Kevyn Orr, and restructuring specialist Kevin Lavin as emergency managers of Atlantic City. The next day, Moody’s sunk the city’s credit rating, preventing any further help from the capital markets.

When Christie was still running for president, spending long stretches in New Hampshire, he was also leaving Atlantic City rescue legislation to gather dust on his desk without his signature. He eventually returned for a brief stay, and, like a college kid who skips most of the semester’s classes then shows up for the final, spun heads by vetoing it. At least $30 million of that vetoed aid was casino money already raised for marketing and promised to the city to plug a budget hole. Then Christie returned to his doomed campaign.

But after Christie dropped out, he had more time to butt heads over Atlantic City. He demanded so much power over Atlantic City operations, finances, assets and government that the normally decorous and bow-tied Mayor Guardian has defended his turf with comments like, “We’re not the fascists here.” Delgado, the councilman, says: “If we’re ‘America’s Favorite Playground,’ you’ve now got a playground bully.”

Lately, Christie gets mad when anyone brings up the possibility of Atlantic City filing Chapter 9, but Moody’s has blamed the governor for casting doubt onto New Jersey’s once rock-solid policy of assisting cities to prevent default. Christie, in turn, blames a bloated and recalcitrant city government, and, more recently, Assembly Speaker Vincent Prieto, a North Jersey Democrat who joined forces with Atlantic City officials to block a state takeover.

Oddly, Christie was in Atlantic City the day the rescue bills were passed, and the mayor was in Trenton. But unlike the last time Christie came to town, when he blustered in and called the mayor “a liar,” Christie did not mention the city at all; he gave his speech at a charter school conference and exited down through a Bally's elevator and away in his helicopter.

Later, a rumor circulated that he'd gotten stuck in an elevator at the hospital where his helicopter had landed. It wasn’t true, but it gave fire officials, still worried about the beatings their contracts may take, a chance to crack a few about how long it might have taken them to get the governor out.

Atlantic City Fire Department Chief Scott Evans, himself a former mayor, said the path to the city's rescue was more complicated and convoluted than an "NCIS series where you try to connect the dots."

"It's mind boggling," he said. "Who's connected to who. Here's this congressman, and here's this senator, and then you got the presidential thing, and he wants to go to Washington D.C. with Trump, and you can see Christie working out of the White House doling out contracts to all his buddies. And then you think, what does Atlantic City have to do with all this?"

Trump’s mark on the town has been vanishing for decades, swallowed up in the four corporate bankruptcies that left him with virtually no stake in the company that ran the three Trump casinos.

Last year, he sued to force the shuttered Trump Plaza to remove every reference to his name, a final pronouncement on his view of Atlantic City. The letters were removed, some carted off in a contractor’s pickup truck.

When Trump first proposed building his wall on the Mexican border, locals took video of a broken-down outer wall at the Taj Mahal, and said: “This is the wall built by Donald Trump.”

“He put his name on casinos and drove them into bankruptcy,” Democratic State Assemblyman John Wisniewski told the crowd of Bernie Sanders supporters gathered inside Boardwalk Hall. “What’s worse, is that now Donald Trump and Chris Christie have teamed up.”

Trump’s four corporate bankruptcies between 1991 and 2009, which he has said he used to strategic benefit, left florists, plumbers, lawyers, electricians, piano suppliers, bondholders and others with pennies on the dollar of what they were owed. He ended with less than 1 percent share of the now-Icahn-controlled company.

And while it’s a stretch to tie Trump’s casino bankruptcies to the city’s current dire straits, Moody’s most recent warning to the city’s current bond holders rang familiar.

“The Caa3 rating indicates a post-default recovery rate of 65 percent to 80 percent of principal,” Moody’s warned. Harry Hasson, a florist who opened Trump Plaza and recalls with fondness going every Friday to meet with Ivana Trump, then a vice president of Trump Hotels, to work on landscaping and floral arrangements, said he and other contractors settled outstanding Taj-related debts at 50 cents on the dollar. (More recently, Trump suggested that as president, he might seek similar discounts on the country’s debt.)

But many employees remember Trump’s Atlantic City days fondly. And even some who tangled with him remember a city, like the Republican voters who would follow, very much in Trump’s grip.

“He’s always wanted to be a political mover and shaker,” said Louis Toscano, chief of staff to then-Mayor Jim Whelan in the 1990s. “Look at what he did when he came into Atlantic City. He bowled over the entire town. People couldn’t get close enough to him.”

On the same day that Capt. Dilorenzo was hunkered in the Ducktown, fretting over the fate of his city, Bernie Sanders had just left town. The scourge of Wall Street and the 1 percenters had used Atlantic City as a back drop for an attack on the billionaires of the Boardwalk: Trump and Carl Icahn, who now owns the just-out-of-bankruptcy Trump Taj Mahal, the last remnant of the Trump brand in Atlantic City.

Icahn, who Trump has said would make a good Treasury Secretary, would later crow about being the one to save the Taj. And in fact, the casino left by Trump to a decrepit half-life is showing signs of being revived. It still relies on a pervasive use of the Trump name (comps are loaded onto a “Trump One” card, as in Air Force One), but the casino has also conspicuously shed the Trump name on new billboards. Icahn, like Christie, is no fan of the unions, which has turned Dilorenzo’s counterparts in UNITE HERE Local 54, the casino workers union, into regular and inventive protesters on the Boardwalk (Icahn as Dracula was a persistent meme), even as the police and fire unions were protesting at City Hall.

For municipal employees, the threat of a state takeover is not just an attempt to undermine public sector unions, it’s an assault on the civil rights of minority residents and workers.

“Donald Trump’s main man!” fumed Darnell Hardwick, an NAACP delegate in Camden, where the state previously seized control. “Camden was the same thing as Atlantic City. You get them to a crisis. Christie wants to change the whole dynamic of public bargaining and public employee contracts. That’s how a lot of us minorities get into the middle class, through the public union.”

Christie advisor Jon Hanson, who was the architect of the Atlantic City takeover, originally modeled after Michigan’s emergency manager law, was also a chief fundraiser for Christie’s campaign and now supports Trump. The influential developer still thinks Christie can save Atlantic City. But he deflects questions about Trump’s lingering effect.

“I’m a delegate on the Trump ticket,” Hanson said. “I’ve known Donald for over 30 years. I very much support him. I don’t know anything about what he did in Atlantic City. I know what I’ve seen him do in New York, his golf courses.”

Trump himself boasted that he “had the good sense to leave Atlantic City.”

And his final mark on Atlantic City might be to take its current nemesis, Christie, out of the picture sooner than later.

“Christie isn’t going to be governor forever,” says now State Sen. Jim Whelan, the former mayor and Trump antagonist. “If Trump wins, God forbid, (Christie) could be gone next November, off to Washington.”

That might be a relief on both ends.