Wednesday, Sept. 1, 2004 | 10:38 a.m.
Workers of the Aladdin hotel and casino had New York strip steak for breakfast this morning in the employee dining room. It was Robert Earl's way of saying thank you for persevering through 35 months of operating in bankruptcy.
Earlier this morning, a partnership fronted by Earl took charge of the 2,567-room Strip resort.
Audit and enforcement agents for the state Gaming Control Board entered the property just before midnight Tuesday and monitored the cash count as the books changed hands from Aladdin Gaming LLC to RE/BH LLC, Earl's acquiring company.
RE/BH partners include Earl, Douglas Teitelbaum of Bay Harbour Management LC, New York, the financier of the deal, and Starwood Hotels and Resorts Worldwide Inc., White Plains, N.Y., which is an equity partner and will manage the hotel.
The partners are now on a 15-month timetable to convert the property into the first-ever Planet Hollywood hotel and casino. Earl was a co-founder of the Planet Hollywood restaurant chain, headquartered in Orlando, Fla.
Gaming Control Board officials looked at this morning's transition as routine business.
"It's a simple process these days because it's been done so many times," said Keith Copher, chief of enforcement for the regulatory body.
"Our agents are there primarily to answer questions if any come up and to assure that there's a smooth transition," he said. "It usually takes a few hours and most of it occurs behind the scenes."
Earl's partnership won final regulatory approval for the deal Friday when the Nevada Gaming Commission approved licensing. The partners were the successful bidder for the Aladdin in a U.S. Bankruptcy Court sale more than a year ago, offering $637 million. When it opened in 2000, the Aladdin was said to be worth $1.2 billion.
For several managers and a handful of employees in key departments, Tuesday was the last day of work at the Aladdin.
"I think most people knew that when Mike Mecca (the property's new president and chief executive officer) came in that he would want to bring in some of his own people in key positions," Earl said in an interview Tuesday.
Earl said the property would retain the Aladdin name for several months while the company pumps $90 million worth of improvements into the place. The company intends to compete vigorously in the entertainment field, and Earl said by the end of the year he hopes to announce a major signing of an entertainer to a deal similar to the one Caesars Entertainment Inc. has with singer Celine Dion.
The company plans to build a new 1,300-seat showroom and reconfigure the 7,000-seat Aladdin Theatre for the Performing Arts to a more intimate capacity of about 3,200 seats.
In the casino, Mecca plans to redesign the floor and introduce new slot machines featuring the popular ticket-in, ticket-out technology.
For Starwood, which plans to operate the hotel with its Sheraton brand, the acquisition of the Aladdin gives the company its largest presence in Las Vegas since the company sold Caesars Palace to its current owners in 1999. Starwood also operates the Westin-branded Casuarina on Flamingo Road, but the Aladdin is much larger and immediately became Starwood's largest property.
The company was interested in regaining a foothold in Las Vegas because its customers wanted a Las Vegas resort to cash in the loyalty points they had accumulated by staying at Starwood properties.
Another component of the Aladdin -- the Desert Passage mall -- was not a part of the transaction. The 140-store center was acquired from Trizec Properties for an undisclosed amount in late 2003 by a partnership composed of RFR Holdings and TriStar Capital, New York.
RFR announced earlier this year that it is revamping the mall and would change its name.
Meanwhile, one of the top priorities for Earl is to resolve issues with the Culinary Union, which demonstrated several times while regulators completed their investigation of Earl and his partners.
Union officials say a majority of the Aladdin's workers want the Culinary to represent them in contract negotiations.
"We're hoping that we can have a progressive relationship with the new owners," said Kevin Kline, director of organizing for the union. "We're hoping the current Planet Hollywood management will have a progressive attitude toward workers and will listen to their voices."
Earl said he intends to meet with employees and union officials through September to determine how to proceed.
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