Aladdin deal approved
Friday, Aug. 27, 2004 | 10:32 a.m.
CARSON CITY -- There's going to be a lot of changes when a new group takes over the Aladdin hotel-casino on the Las Vegas Strip next Wednesday.
The new owners, buying the resort out of bankruptcy, intend to invest $90 million for such improvements as a new facade, up-to-date ticket-in and ticket-out slot machines and changes in the layout of the casino floor.
The state Gaming Commission on Thursday gave final approval for a group led by Douglas P. Teitelbaum, Robert I. Earl and Theodore W. Darnall to buy the hotel-casino out of bankruptcy in a $637 million deal.
Earl, one of the founders of Planet Hollywood, said the hotel would eventually be renamed Planet Hollywood, but he said that would be at least 15 months from now.
Commission Chairman Peter Bernhard expressed some reservation that the group was investing only $40 million of its own. He noted that Planet Hollywood has been in bankruptcy twice. And he said he was concerned that the new owners would walk away from the Aladdin if they encountered major financial troubles in the future.
Teitelbaum, managing principal of Bay Harbour Management LLC of New York, said "That's not my style. I'm not one to throw in the towel." His company, he said, is in the business of turning around distressed firms.
Donna Lehmann, chief financial officer of the property, told the commission the Aladdin in its first year under new ownership expects $276.1 million in net revenue and $43.1 million cash flow. That's lower than the present year, but during this time there would be construction going on at the Strip hotel. In five years, Lehmann said, there should be $434 million with a cash flow of $121.4 million.
The 2,567-room resort reported a profit of $3 million in July, according to records in the U.S. Bankruptcy Court in Las Vegas.
Plans call for a developer to build 1,000 two-bedroom time-shares on the 4.6 acres of the hotel property on Harmon Avenue. The 7,000-seat showroom will be redesigned to accommodate 3,200 customers for more frequent shows; a 1,300-seat showroom will be built in unused space; and more restaurants will be developed on the ground floor of the casino.
Movie and television stars will be invited to the hotel to promote their pictures or books. And the public will have access to them, Earl said.
Earl said plans call for this to be converted into a must-see attraction. At a meeting earlier this month of the state Gaming Control Board, Earl said the Aladdin has been a "dormitory" for other hotels on the Strip.
It has good room occupancy, he said, but the guests spend less there on gaming and food. For instance, he said, the average Aladdin guest plays $70 in the slot machines but at the MGM Grand it's $120 for guests who stay there. The Aladdin guest spends $69 on food compared to $105 a day at the MGM.
Earl was asked by Bernhard why Planet Hollywood had not paid its sales and use tax to the Nevada Tax Commission for more than one year. Earl said the delinquency was on a subsidiary of Planet Hollywood and he did not learn about it until Monday. And he said the back taxes were paid. Planet Hollywood may owe taxes in other states and Earl said they would be paid.
Bernhard said this was evidence that Earl did "not run a tight ship" and brings into question his business probity. Earl said Planet Hollywood has come out of its second bankruptcy with a depleted workforce and it is now being strengthened. He said he acted as soon as he heard about the deficiency.
Earl also made a lengthy apology to gaming regulators for not completely filling out his application. He said he was guilty of "grave missteps" for failing to provide accurate and complete information. But he said he later submitted a revised application with all the information.
"It is not representative of the manner I devote myself to business matters," he said.
Starwood Hotels & Resorts Worldwide of White Plains, N.Y., would run the hotel under the name of Sheraton. Theodore William Darnall said the company was glad to be back in Las Vegas after selling Caesars Palace in 1999. Darnall and Barry Sternlicht are officers in Starwood and were licensed by the commission since Starwood will hold an interest in the resort.
Desert Passage, the shopping center at the hotel, has new owners, and Earl said it intends to make improvements that will jive with the work at the hotel-casino.
archive
- Most Read
- Discussed
- Most E-mailed
- Google Maps glitch renames Henderson
- Fight snapshot: Pacquiao is a hit with Jimmy Kimmel, and vice versa
- Rebels’ win raises a few what-ifs
- Wood: Not the renewable energy some had in mind
- Vegas is inspiring, but not buying, ideas for tourism ads
- Quagga mussels a toxic threat to Lake Mead
- Pinnacle CEO resigns after meeting confrontation
- As earnings fall, Riviera unsure if bankruptcy can be avoided
- Trial set for parents of boy, 4, who died in hot vehicle
- Not all doctors agree with AMA support of bill
Blogs
Elsewhere
Macau's gambling industry faces nightmare of water rationing
Top Chef: Las Vegas
Top Chef Odds Week 11: And then there were six
Politics: The Early Line
Rep. Berkley livens health care debate with story of her own
Now and Then
Wranglers to face familiar foe and that's putting it mildly
Robin Leach's Las Vegas Celebrity Watch
Photo Gallery: Donny Osmond’s DWTS dream is in danger
Sports: Upon Further Review
Fight snapshot: Arum takes a pot shot during Pacquiao training (2 Comments)
Robin Leach's Las Vegas Celebrity Watch
Final Five have two routines each on Dancing With the Stars
Calendar »
- 10 Tue
- 11 Wed
- 12 Thu
- 13 Fri
- 14 Sat
-
Las Vegas Wranglers vs. Utah Grizzlies
Orleans Hotel-Casino
-
Leaving Springfield at Beauty Bar
Beauty Bar | 10 p.m. to 11:59 p.m.
-
Justin Sayne and Dignity at Moon
Moon Nightclub | 10:30 p.m. to 11:59 p.m.
-
Lily Tomlin at the Hollywood Theatre
Hollywood Theatre at MGM Grand
-
2nd Annual Go-Go Cup at Blush
Blush Boutique Nightclub | 10 p.m. to 11:59 p.m.
The Sun
Locally owned and independent for more than 50 years.
Technorati









