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New Owners Plan to Invest $100 million to Renovate the 1,876-room
 Tropicana Las Vegas with a South Beach Miami Theme

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

Jul. 2--On his first day back as a Strip executive, former MGM Grand exec Alex Yemenidjian greeted his new employees with a promise to return the Tropicana to its former luster.

"Today is the first day of the new Tropicana Las Vegas," Yemenidjian said in a letter given to employees. "Until yesterday, the Tropicana was a great and legendary property in eclipse. Beginning today, in what will seem like a marathon, sometimes interrupted by a 100-yard dash, we will embark on a journey to transform the Tropicana to pre-eminence."

The approximately 450-word letter was distributed to all 1,800 employees along with a book, "Raving Fans: A Revolutionary Approach to Customer Service," by Ken Blanchard and Sheldon Bowles, according to someone familiar with the situation.

Yemenidjian's letter encourages workers to read the book before a "companywide meeting" scheduled for July 14.

Yemenidjian and property employees were not available for interviews this week. A property official said the new owners were looking for a low-key transition.

The new ownership group, Tropicana Las Vegas Hotel and Resort, took over the property at 12:01 a.m. Wednesday from Las Vegas-based Tropicana Entertainment.

Led by Toronto-based private equity firm Onex Corp., Tropicana Las Vegas Hotel and Resort acquired the 34-acre property in Delaware bankruptcy court in June. The new owners bought nearly $440 million in debt leveraged against the property at a discount.

Yemenidjian's control of the Tropicana, which opened in 1957 and was once known as the "Tiffany on the Strip," marks his return to day-to-day operations of a Strip casino after a nine-year absence.

He served as president of MGM Grand Inc. from 1995 through 1999, but remained on the company's board until 2005.

Yemenidjian, who is the new company's chairman and chief executive officer, told Nevada gaming regulators last month the owners plan to invest more than $100 million to renovate the 1,876-room property with a South Beach Miami theme.

In the letter issued to employees, which used a lot of the same language he used in the presentation to casino regulators, Yemenidjian said his goal is to "put wings on the Tropicana's operations by aligning short-term execution with long-term vision."

The letter continued: "It's very clear to me in this fiercely competitive environment, we have to do more with less and do it better than before. ... Our human assets, you, will be responsible for the creation of the new Tropicana because money does not think and buildings do not create."

For many of the workers, the letter introduces their fourth owner in 30 months.

Kentucky-based Columbia Sussex Corp. acquired the property in January 2007 as part of a $2.1 billion buyout of Aztar Corp. Plans for a multibillion-dollar redevelopment of the property to a 10,000-room hotel-casino were announced, but later scrapped because of the economy.

Columbia Sussex, which is controlled by hotelier Bill Yung III, soon separated its gaming properties into a subsidiary named Tropicana Entertainment.

After losing control of the license to operate the Tropicana Atlantic City, Tropicana Entertainment filed for Chapter 11 bankruptcy in May 2008. During the next few months, Tropicana Entertainment Chief Executive Officer Scott Butera moved the corporate offices from Kentucky to the Strip property. Yung's ownership interest was reduced to zero through the bankruptcy.

Butera discussed Tropicana Entertainment's plans for the Tropicana with the Review-Journal in October, saying plans to redevelop the property would be "five to seven years out," because of the economy. Butera's plans to hold onto the Tropicana were derailed when the Onex-led group bought the property's secured loan, which was held separately from the rest of the bankrupt company.

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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