Downtown ‘financial ruin’ warned

Tuesday, June 4, 2002 | 11:08 a.m.

Lawyers for downtown hotels stepped up the rhetoric Monday in a bid to persuade Culinary Union leaders that their clients can't afford the richest ever Strip contract.

"They're not going to take that Strip package," said Gregory Kamer, who represents seven downtown properties. "Taking that package would jeopardize jobs and could be financial ruin for downtown.

"It's insane and irresponsible of the union bosses to try to risk the future of these workers' professional lives."

Kamer -- who represents Binion's Horseshoe, Four Queens, Fitzgerald's, Plaza, Las Vegas Club, El Cortez and the Western -- said some of his clients already are not turning a profit.

"To take on even more debt without increasing operating revenues makes no sense," Kamer said. "No matter how they try to cut the numbers, my clients can't pay what the union wants."

Kamer also disputed a claim by union leaders that the downtown hotels haven't invested in the future of their casinos.

"They've put tens of millions of dollars into these properties, and we will show where the money has been invested," Kamer said.

Attorney Sal Gugino, who represents the Castaways, said his client can't afford the hefty increases in medical benefits in the Strip contract, which guarantees free health care for union members.

"We haven't earned the kind of revenues that would permit us to accept anything close to what the union is demanding," Gugino said. "There has to be some compromise by the union."

Kamer and Gugino plan to make a presentations Friday to union members, showing why their clients are in poorer financial shape than their Strip counterparts.

Both lawyers then expect to submit counter offers to the union next week.

Union leaders extended their strike deadline to July 1 to provide for more time to negotiate with 17 mostly downtown and lower-end Strip hotels.

The Strip properties -- Riviera, Barbara Coast, Sahara, Stratosphere and Stardust -- are said to be in better financial shape than the downtown hotels and more likely to come to terms with the union by the strike deadline.

Union members, meanwhile, are expected to vote Thursday at Cashman Center to ratify new five-year contracts at 17 megaresorts owned by Park Place Entertainment, Harrah's Entertainment, Mandalay Resort Group and MGM MIRAGE. A ratification vote for the Tropicana also is scheduled.

The agreement, which covers 75 percent of the union's 50,000 members, gives the workers their largest ever increase in wages and benefits. It calls for nearly a $3.24 hourly hike over five years, with much of the money going to the union's struggling health and welfare fund.

Union leaders have insisted that they expect the remaining hotels to make the same contributions as the Strip properties to the health fund.

Others negotiating deals with the union are Fremont, Main Street Station, Golden Gate and Jerry's Nugget in North Las Vegas.