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Howard Stutz

Trump says wait to enter Las Vegas market worthwhile

30 May 2007

LAS VEGAS, Nevada -- Las Vegas has held a 20-year fascination for billionaire developer Donald Trump.

But as Strip land values soared into the $20 million to $30 million per acre price range, Trump sat on the sidelines and watched. But then, three years ago, he struck a deal with New Frontier owner Phil Ruffin to build a 1,282-unit high-rise residential tower on seven acres behind the hotel-casino.

Trump has little regret that he waited to enter the market.

On Friday, Trump oversaw the topping-off of the first 64-story building in his $1.2 billion Trump International Hotel & Tower. Sales on the second 1,280-unit tower began in April and construction is expected to begin next year.

Trump said the value of his two-building luxury project and the seven-acre site surged two weeks ago when New York-based developer Elad Group agreed to pay more than $1.2 billion for 34 acres that included the New Frontier.

"They are going to build a spectacular $5 billion project right next to us," Trump said. "The people who bought in my building early on feel real good about that."

In an interview with the Review-Journal before Friday's ceremonies, Trump touched on a variety of topics, from his attraction with Las Vegas to his on-and-off friendship with casino developer Steve Wynn. (Trump interrupted the interview to take a phone call from Wynn, who couldn't attend the topping-off event).

Trump also discussed potential changes in his Atlantic City casino holdings, the possible end of his top-rated reality television show, and becoming a grandfather for the first time.

Question: When you look at the value of Strip land nowadays, do you wish you got into the market sooner?

Answer: No, because New York has seen an even bigger increase, especially in Manhattan. Properties that were selling for $1 million are now selling for routinely $15 million, $18 million or $20 million during that same time span you're talking about. I'm one of the largest developers in the world and my biggest focus is Manhattan.

When you think about Las Vegas, my timing was right. I came in three years ago, built the first building and sold it out with $1.3 billion in sales. It's been a phenomenal success.

I've always been interested in Las Vegas, but in one sense, my timing was good because I hit this market at the right time and with a spectacular project.

Question: Will you do something else in Las Vegas after the Trump International is completed?

Answer: I've been looking at some things but not a lot because of this building. People want me to get involved in another project and I might, maybe in a joint-venture deal.

Question: Private equity has been coming into the casino industry with the announced buyouts of Harrah's Entertainment and Station Casinos. You own three casinos in Atlantic City through a publicly traded company (30 percent ownership of Trump Entertainment Resorts). Are you surprised by this change?

Answer: The public vehicles are very tough to deal with and a change is coming in all industries not just the casino industry. A public company is much different than a private company, especially in gaming. A private person like myself has unlimited access to capital. The casino industry is just a small part of what I do. I estimated the casinos as being just 2 percent of my net worth.

Question: You asked Merrill Lynch in March to explore strategic alternatives with your Atlantic City casinos. What do you think will come from this?

Answer: I've always done well in Atlantic City. People know how well I've done in real estate but they never understood how well I've done in the casino business. We're looking at alternatives. We could sell the casinos for a lot of money, we can keep them, or we can partner with someone else. That's what Merrill Lynch is trying to determine, what is the next best step.

Question: The Trump International is being built across from Wynn Las Vegas. Can you describe your relationship with Steve Wynn?

Answer: Steve is an amazing guy. About 90 percent of the time we've been best friends and 10 percent of the time we fight. But the fights have not been big fights and it worked out very well. We had about a two-year hiatus, but we now have a great friendship.

Question: NBC left "The Apprentice" off of its fall schedule. What's the status of the show?

Answer: NBC wants to renew it, but I'm not sure if I want to because I'm so busy with what I'm doing. I have buildings and projects all over the world. It was amazing to have the No. 1 show on TV and we did that for six seasons. I'm just trying to decide if I want to do it again or not.

Question: Your son, Donald Jr., and daughter, Ivanka, work for you in the Trump Organization. What advice do you have to parents who work with their children?

Answer: My kids are very smart, were good students and they are leading a very big growth in our company. You have to stay on top of your kids and make sure you are guiding them properly. You just want to help create the right path for them.

Question: Donald Jr. and his wife just had a baby girl, your first grandchild. Has if changed you?

Answer: Change is too strong a word and I don't know if I feel any different but Don has been a great son and this has been a great experience.