Mar. 2, 2004 - An accountant trying to get a grip on Donald Trump's problems in Atlantic City can start with the books and the $1.8 billion in debt. 

Anyone else can hit the Boardwalk and marina, home to three of his casinos. It won't take long to see why Trump felt compelled to hand over control of his only public company, Trump Hotels & Casino Resorts Inc., in exchange for $400 million from an investor bent on a turnaround. 

At Trump Taj Mahal, the haze from the smokers on the betting floor is Newports and Carltons. At the Borgata -- Atlantic City's newest casino, and it's not Trump's -- the aroma is hand-rolled Macanudos, with their hint of fine coffee and cocoa beans. 

At Trump Marina, the upcoming acts are Styx and Deep Purple, hot stuff 25 years ago. At the Borgata, Sting, the biggest name in pop, is sold out. In the Trump Plaza restrooms, black melamine ashtrays junk up the countertops. In the Borgata's, silky hand towels seem too fine to toss. 

This makes for better watching than Trump's TV reality show, "The Apprentice." Trump's future will help determine whether Atlantic City can become a world-class destination for big spenders, or remain a day trip for comp-happy retirees trolling the slots for quarters. Trump's future also will help determine how much money -- courtesy of state-imposed casino taxes -- will go toward housing developments, day-care programs, art shows and summer festivals, and other public projects all over New Jersey. 

With rare exception, Trump's casinos have gone seven years without new guest suites, trendy restaurants, and big-name entertainment. Trump points to his properties' industry awards for outstanding service and hospitality. But it's hard to overlook tired wallpaper and cranky escalators, particularly when so many other hotels in town renovated as opening day approached for the $1 billion Borgata. 

"We have expenses -- debt -- so a lot of our cash flow goes to service our debt," said Scott C. Butera, executive vice president of Trump Hotels & Casino Resorts. At the time the company was building, he said, "there were benefits for putting that leverage on. Now we're in a situation where we have to figure out how to deal with that." 

It'll be a tricky few months. The company's finances are under the state Casino Control Commission's "continuing, careful scrutiny" as part of its four-year re-licensing in June. Now it needs to refinance its debt -- interest payments alone run $150 million per year -- and persuade bondholders to accept lesser returns. 

The deal with the Credit Suisse unit DLJ Merchant Banking Partners III is in the "exclusivity agreement" stage, and won't be final for several months. Under it, Trump's share of the company would drop to 20 percent, from near 50 percent. He would remain chairman, but the new investors could change that arrangement. 

Credit Suisse's investment "will strengthen the company's balance sheet, allow it to expand its well-located casino properties, and position the company for growth," Trump Resorts said in a news release. 

For now, Trump is acting as though he'll still be in charge, saying he plans to "build towers" and otherwise expand his casinos. Some observers believe that whatever his title, he'll still hold sway. 

"I think Trump now will have the wherewithal to expand the amenities," said Roger Gros, editor of Global Gaming Business magazine. "More rooms. Do some more high-end entertainment. Trump used to be the top guy in the entertainment and sports fields in the Eighties and Nineties. I think he's going to do more for his customers." Even Trump's sharpest competition has a stake in his success. 

"I really wouldn't want to see anybody fail. That's not good for the marketplace," said Larry Mullin, a Borgata senior executive and a former Trump employee. "Anybody that can put new capital into this market is going to make the market only better. Donald is a name that has great brand value. You can never count him out of anything. He's a formidable competitor and he's not going to roll over." 

In some ways, Atlantic City is doing quite well -- even as the Trump company, which owns 25 percent of the city's casinos, has lost money for six straight years, dragging down the industry's bottom line. 

The casinos have spent more than $2 billion on recent development, bringing parks, memorials, amusements, dining, and shopping to the city itself, and renovations and additions to the Showboat, the Tropicana, Harrah's, Bally's, and Claridge Tower. Even Trump found $15 million to give the Taj Mahal some attention. 

In 2003 the casinos combined brought in $4.49 billion, or 2.4 percent more than the previous year. Hotel occupancy for the first nine months was 94.5 percent. More exciting than the numbers, though, was the opening of the Borgata. The Jersey Shore's first new casino in 13 years, it is an achievement of Tuscan design aglitter in Spanish marble and hammered gold. 

Now, the bad news. Most of last year's revenue gain was the Borgata's, which didn't even open until July. Seven casinos, including all of the Trump properties, lost money. 

The state socked the casinos with $90 million in new taxes last year, atop the 2.5 percent gross-revenue payments due to the Casino Reinvestment Development Authority, which controls about $1 billion for community and economic development throughout New Jersey. To prevent any more erosion of its profits, the casino lobby stands to shell out up to $25 million to keep video lottery terminals out of New Jersey's racetracks. 

Pennsylvania, Maryland, New York, and Connecticut all have proposals to expand gambling. And there's always hip, shows-and-restaurants-heavy Vegas -- which Atlantic City would do well to copy, according to Milton Leontiades, the dean of the Rutgers Camden School of Business who studies gambling in New Jersey. In July, he released a report that predicted $9 billion in new Atlantic City investment by 2008. 

"You're going to get more non-gaming attractions," Leontiades said. "Atlantic City is going to get away from the Joe Six-Pack day-tripper image that they currently enjoy and put on a better public face." Meanwhile, the Trump casinos stand ready for their own change. 

"I think AC is poised to jump to the next level, as long as Trump can keep up," said Gros, the Global Gaming Business editor. 

Eugene Mark Christiansen, a consultant to the casino industry, said it's not enough for Trump alone to keep up with the Borgata. 

"All of the properties in Atlantic City have pretty much failed to refresh the destination, to refresh their product," he said. "What happens in five to 10 years depends very much on whether anyone builds. If not, [Atlantic City] is going to look the way it does now. It will look old and tired." Some wonder why Trump would want to stay and play. His company, after all, has been a handful. 

For six years his three Atlantic City casino hotels have had the lowest or near-lowest occupancy rates in town. 

And there are headaches elsewhere. In January, Trump Hotels & Casino Resorts abandoned its try to buy the license of the Emerald Casino in Illinois. In April 2003, the company lost its bid to develop and manage the Eastern Pequot casino in Connecticut. In January 2002, the SEC cited the company for incorrectly reporting $17 million in income. 

But then there are signs that Trump is hanging on. Late last week, he left a Nevada Gaming Commission hearing with a victory: a license to operate a casino hotel. 

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(c) 2004, The Record, Hackensack, N.J. Distributed by Knight Ridder/Tribune Business News. DJT, CSR, HET,