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New Owners, Armenco Holdings to Spend More
than $100 million on Tropicana Transformation

By Arnold M. Knightly, Las Vegas Review-JournalMcClatchy-Tribune Regional News

Jun. 3, 2009--The Tropicana's new ownership group plans to spend more than $100 million in the next year for a total transformation of the property, the group's chief executive officer told gaming regulators today.

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 a gaming operations until the property's new owners are licensed.

"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, all existing restaurants and bars, the show room, convention center and the pool area with a South Beach Miami theme.

Yemenidjian, who is chairman and CEO of the new ownership group, 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 nongaming operations of the property on July 1.

Yemenidjian's company will operate the casino through a 12-month lease for $1 per month until the rest of the owners' executives are licensed by Nevada regulators. The July 1 transition will require Armenco Holding's approval by the Nevada Gaming Commission, which meets June 18.

Tropicana Las Vegas is controlled by Toronto-based private equity firm Onex Corp. 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 weeks, according to 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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Copyright (c) 2009, Las Vegas Review-Journal

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