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Howard Stutz
 

Trump staff put on hold

25 July 2008

LAS VEGAS, Nevada -- Don't call them layoffs.

According to developer Donald Trump, roughly 70 employees at the Trump International Hotel & Tower were "impacted by changes in their schedules" due to the slowdown in closing sales of the building's 1,282 studio, one-bedroom and penthouse units.

"As more sales close, we'll bring them back on," Trump said Thursday. Jim Petrus, COO of the Trump Hotel Collection, said the job changes affected about one-fifth of the tower's 400-plus-person work force.

"This is not really any different than what has gone on in Las Vegas," Trump said. "We're adjusting schedules because of the volume of business. As soon as the units open up, we'll bring people back on."

In February, MGM Mirage laid off some 150 workers at Circus Circus and in April, the company laid off 400 management employees. Station Casinos said it laid off 70 corporate-level employees in May while staff cutbacks were reported at several of the company's casinos.

The $1.2 billion Trump International, which opened in April, is a 64-story nongaming condominium tower near the site of the razed New Frontier. Owners can place their individually owned units into a hotel reservations system, which is attracting some of the Strip's highest per night rates.

Before the building was topped off a year ago, Trump had said all the units had been reserved by potential buyers who plunked down 20 percent nonrefundable deposits for residences that carried prices of between $700,000 and $5 million.

The current mortgage crisis, he said, has slowed the closing process. In June, Trump said sales had been completed on 250 units. However, a report by Deutsche Bank a week later pegged the closings at almost 200 units as of June 12.

On Thursday, Trump and Petrus said 400 individual units had either closed or were in the process of closing.

"We're working with people. We're doing everything we can to help them," Trump said. "Look, I could have just taken the 20 percent deposits and moved on. But I wasn't going to do that. We're working very hard to help everybody who bought a unit to close their sale."

Trump blamed the problems that befell Countrywide Financial for the slowdown in closings. Countrywide went into financial trouble in the crashing mortgage lending climate and was bought by Bank of America for $2.5 billion. Countrywide had been expected to handle many of the Trump International mortgages.

"Countrywide really let us down," Trump said. "Things were a lot different two years ago."

Plans for a second Trump tower have been placed on indefinite hold until the real estate and construction market recovers, Trump said.

"Listen, I still love this building," Trump said.