Board recommends licensing of ex-MGM Grand exec for Tropicana post

By Richard N. Velotta (contact)

Published Wednesday, June 3, 2009 | 12:23 p.m.

Updated Wednesday, June 3, 2009 | 5:50 p.m.

The state Gaming Control Board today recommended the licensing of a former MGM Grand executive to take over the operation of the fabled Tropicana Hotel Casino.

Alex Yemenidjian, who was hand-picked by major shareholder Kirk Kerkorian to serve as president and CEO of the MGM Grand, cleared a major hurdle with today’s unanimous licensing vote of the Control Board, which met in Carson City.

The Nevada Gaming Commission will consider the board recommendation for final approval on June 18.

Yemenidjian is part of the Canadian private equity team Onex Corp. that has accumulated more than $200 million in principal of the senior debt of Tropicana Las Vegas Resort and Casino LLC, secured by the 1,850-room property.

Scott Butera, who has been running the nationwide Tropicana Entertainment company as chief executive, said he supported the creditor-approved reorganization plan and management of the Las Vegas property by Yemenidjian and Onex executives.

Yemenidjian would take over at the property as soon as licensing is approved.

Yemenidjian helped stabilize a struggling MGM Grand, leading to the company’s acquisition of Mirage Resorts Inc. in 2000 and becoming MGM Mirage.

Kerkorian then tapped Yemenidjian to head the Metro-Goldwyn-Mayer film studio and helped turn around that company’s fortunes.

A profile in Forbes magazine referred to Yemenidjian as “the wizard of MGM.”

The new owner said he plans to spend more than $100 million to refurbish the Tropicana’s rooms, casino, restaurants and convention center. A South Beach Miami tropical theme is planned.

Yemenidjian told regulators that refurbishing the property’s rooms would be the easiest part of the makeover because the company could close off rooms a floor at a time without disturbing guests.

But the remodeling of other public areas, including the casino, the convention center and restaurants, would be more challenging. He said the property also would get a new nightclub and two new restaurants in the overhaul.

New slot machines with better bonusing and marketing tools are planned and the company also would take a slice of race and sports book revenue from American Wagering, which operates a Leroy’s Horse and Sports Place operation there.

He said by next year he hopes to revamp and expand the casino to position its entrance by lengthening the pedestrian bridges crossing Tropicana Avenue from the MGM Grand and Las Vegas Boulevard from the Excalibur.

The renovation will be a part of the physical transformation of the Tropicana, Yemenidjian said, but the company also has overhauls planned in the operations, culture and financial sides of the business.

He promised no mass layoffs of employees, but said staff positions would be evaluated. New entertainment and new marketing also are planned, he said.

“In these times, we know we have to do more with less and do it better than before,” Yemenidjian told the board. “We know we have a huge job ahead of us.”

The Tropicana filed for Chapter 11 bankruptcy protection on May 5. The Las Vegas Tropicana filing was separated from sister properties in Northern Nevada, Laughlin and Atlantic City. The Las Vegas Tropicana includes 34 acres surrounding the hotel-casino.

Commenting on the footprint of the property, Yemenidjian said the biggest challenge was to analyze whether it made more sense to refurbish the core structure or to build anew, a strategy proposed by previous owners but dismissed as financially unfeasible.

Yemenidjian’s team also includes Joanne Beckett, who helped in the transition of the Golden Nugget from MGM Mirage to Tim Poster and Tom Breitling and from Poster and Breitling to Landry’s Restaurants Inc.