New owners promising big changes for Tropicana - Business

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Jun. 04, 2009
Copyright © Las Vegas Review-Journal

New owners promising big changes for Tropicana

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL

The Tropicana's new ownership group plans to spend more than $100 million in the next year for a transformation of the property, the group's chief executive officer told gaming regulators Wednesday.

Former MGM Grand Inc. President and Chief Operating Officer Alex Yemenidjian discussed his company's plans for the Strip property during an appearance before the Gaming Control Board, which recommended approval of Armenco Holdings, a limited liability company controlled by Yemenidjian, to take over gaming operations until the property's new owners are licensed.

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"We're going to embark on a journey to transform the Tropicana to pre-eminence," Yemenidjian told regulators during the hearing in Carson City.

The new owners plan to remodel the hotel's 1,876 rooms, the casino floor, restaurants and bars, the showroom, convention center and the pool area with a South Beach Miami theme.

Yemenidjian, who is the new ownership group's chairman and chief executive officer, said his company plans to add two new restaurants, a bar in the center of the casino, a new sports book and poker room as well as replace the casino's slot machines and table games.

The property also wants to extend the pedestrian bridges from Excalibur and MGM Grand to the casino.

"Although we haven't yet completed our development and design program in order to develop one precise project," Yemenidjian said. "It is clear to us the cost of the transformation of the Tropicana Las Vegas to a property that is fresh and relevant will far exceed $100 million."

Operationally, plans are to update slot and player tracking systems, and introduce new marketing and entertainment programs, Yemenidjian said.

The new ownership group, Tropicana Las Vegas Inc., plans to take over the property's nongaming operations July 1.

Yemenidjian's company will operate the casino through a 12-month lease for $1 per month until the rest of the ownership group is licensed by Nevada regulators.

The July 1 transition will require Armenco Holding's approval by the Nevada Gaming Commission, which meets June 18.

Toronto-based private equity firm Onex Corp. controls Tropicana Las Vegas Inc. Yemenidjian is an equity investor in the company and will be chairman and chief executive officer of the new ownership group.

The group plans to file licensing applications with state regulators in the next couple of weeks, said Ellen Whittemore, a gaming attorney representing Yemenidjian.

Yemenidjian, Onex and other holders of the Tropicana's debt will receive 100 percent control of the 34-acre property through a plan confirmed by the U.S. Bankruptcy Court in Delaware.

Yemenidjian said the new company will start with no debt and a balance sheet of nearly $100 million in cash and equity commitments.

"To be sure, we have a huge job ahead of us," Yemenidjian said. "But nothing is more rewarding than to watch people who say it can't be done get interrupted by somebody actually doing it."

Yemenidjian served as president of MGM Grand Inc. from 1995 through 1999, and was on the company's board from 1989 until 2005. He also served as chairman and CEO of Metro-Goldwyn-Mayer, parent company of MGM Studios, from 1999 until 2006.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. steve o wrote on June 06, 2009 07:14 AM: you need to be spend 4 times this amount of money to be competitive with other newer strip properties, 100 mil is a drop in the bucket casinocon wrote on June 04, 2009 07:15 PM: Now that they have ended the Folies Bergere there is no hope for the Tropicana. They had a chance to market themselves as old school Las Vegas -- how the heck do they plan to market themselves now? Edgar wrote on June 04, 2009 03:39 PM: His not from Iran Armenian. Alex is from Lebanon. Just for your curious thought. Yes he is armenian, lebanese-armenian. The same as kirk kerkorian. I hope Alex does well, we wish him the best in sucess of the tropicana American Gaming Guru wrote on June 04, 2009 03:08 PM: From a 2004 interview in the NY Times: Then there is the possibility that Mr. Yemenidjian will leave Mr. Kerkorian's nest. "I am not a caretaker,'' he said. "I either have to be turning around a mess or once something is turned around, growing through acquisitions. But watching the grass grow is something I don't do very well. Do I think there's another challenge for me to face? Yeah, I think so. There'll be a third act. I just don't know what it is going to be." Interesting.... Ken wrote on June 04, 2009 12:38 PM: First off, the recession is not ending anytime soon. The only reason we are not losing more than half a million jobs a month is because government hiring is out of control. I do hope they can do something to clean up the mess that is the Trop but I'm not holding my breath. Phil wrote on June 04, 2009 08:31 AM: Alex is a very shrewd businessman and he knows the market in LV. I think he will turn the Tropicana around in time with some help from the credit markets and the recession coming to an end. Scotto97 wrote on June 04, 2009 08:08 AM: Well written Michelle. I find this article is encouraging. It's about time someone takes a good existing hotel with a strong theme and location then builds on it instead of knocking it down in favor of boring, business-like looking glass towers (can we say City Center?) Keep the prices reasonable and I think Mr. Yemenidjian is on to something. Michelle wrote on June 04, 2009 07:09 AM: Hi Doug, Just in case you or anyone else is curious...he or his family might have lived in Iran at one time or another after the Armenian genocide but his last name is clearly Armenian not Persian (Iranian). Armenians are Caucasians & Christians (the first race of organized Christians I believe). They got spread out all over the Middle East due to the genocide in 1915 and then years and years of communist Russia occupying their country. Whatever his ethnicity is if he can do well and save this property I like him. If he can't I don't know...I liked what he did for MGM in the 90's so I have high hopes. Balto Bob wrote on June 04, 2009 06:05 AM: Me thinks we have heard this before. There is a market for them. We'll see. doug wrote on June 04, 2009 06:01 AM: That last name sounds like that guy in Iran??