The transition to the Tropicana’s new ownership and management July 1 will be a smooth one, the new top executive of the property assured the state Gaming Commission on Thursday.
The current owner has been “extremely cooperative with us on all transition issues,” Alex Yemenidjian told regulators in Carson City.
“We expect a very smooth transition on midnight June 30.”
Yemenidjian, who is chairman, chief executive officer and an investor in the new ownership group, earned unanimous approval from the commission to run the property’s gaming operations while the new owners seek licensing.
The licensing process is expected to take a year.
The gaming and liquor license will transfer on July 1 to Armenco Holdings, a limited liability company controlled by Yemenidjian, a former executive at MGM Grand Inc.
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.
The new owners, Tropicana Las Vegas Hotel and Resort, will take over the nongaming assets of the 34-acre property on July 1.
Yemenidjian said the new company will start with no debt and nearly $100 million in cash and equity commitments.
Profits from the gaming revenues will go into a capital expenditure fund until the new ownership group is licensed.
To maintain the property’s financial position, Yemenidjian said his management team will review “all issues for potential profit revenue.”
He told regulators: “Given the sobering realities of the economic downturn, now more than ever, we’re going to reconcile the relentless demand for innovation with the intensive need to control costs,” he told regulators.
He added that “all employees will be evaluated on their individual merits” but assured regulators “there will be no corporate liposuction in the form of mass layoffs.”
The property had nearly 1,700 employees in May 2008, the latest number available.
The Tropicana, which first opened in 1957, is being acquired from Tropicana Entertainment in Delaware bankruptcy court.
The company filed for Chapter 11 in May 2008 after losing its gaming license for the Tropicana Atlantic City.
Tropicana Entertainment CEO Scott Butera will continue to oversee the company’s remaining properties in Nevada, Indiana, Louisiana and Mississippi.
The Nevada commission’s approval was the final regulatory step to complete the acquisition.
The transfer has been approved by the Delaware court and secured debt holders.
The new owners bought nearly $440 million in debt leveraged against the Las Vegas property at a discount.
The new company will incorporate in Delaware and plans to become a publicly traded corporation.
Tropicana Las Vegas Hotel and Resort will be led by Toronto-based private equity firm Onex Corp., which will control 54 percent of the property’s shares.
Yemenidjian told regulators the new owners plan to completely renovate the 1,876-room property with a South Beach Miami theme at a cost that “far exceeds $100 million.”
Plans include adding two new restaurants, a bar in the center of the casino, a nightclub, a new sports book and poker room as well as replace the casino’s slot machines and table games.
“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.”
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.