Board suggests licensing approval for Tropicana owner

By Richard N. Velotta

Wednesday, Nov. 3, 2010 | 1:40 p.m.

The state Gaming Control Board has recommended approval of the licensing of the companies that control the storied Tropicana hotel-casino on the Las Vegas Strip.

Board members unanimously recommended the licensing of Toronto-based Onex Corp., parent company of Tropicana Las Vegas Inc. and several subsidiaries that are in the process of transforming the 53-year-old, 1,658-room development into a South Miami Beach-themed resort with a $180 million refurbishment.

The recommendation will go to the Nevada Gaming Commission, which is expected to consider final approval on Nov. 18.

Tropicana Chairman Alex Yemenidjian told board members today that his team still has 12 projects to complete before the Tropicana’s extreme makeover has been completed.

So far, the company has refurbished every room in the hotel’s Paradise and Island towers, the property’s convention area and the back of the house of the resort. Yemenidjian said the casino makeover is almost completed, the surveillance system has been converted from analog to digital technology and the company has opened the Biscayne and Bacio restaurants.

Yemenidjian said the company is building a new porte cochere, revamping the casino’s race and sports book in a partnership with Cantor Gaming by the Super Bowl and will be adding its Club Nikki, Nikki Beach and Café Nikki amenities, a popular South Miami Beach club brand.

The property also has opened the Brad Garrett Comedy Club and will unveil a production show aimed at Baby Boomers in 2011. New restaurants and retail also are planned for next year.

Yemenidjian said a marketing program aimed at Gen X and Gen Y customers and a new loyalty program would be launched in January. A new convention sales team, recognized recently by Smart Meetings magazine, has been hired.

Executives also explained in the hearing what regulators described as one of the most complex financial structures they had ever seen in the ownership of the Tropicana.

Onex, described as one of North America’s oldest and most successful private equity companies, is headed by Chairman Gerald Schwartz. His top gaming executive is managing director Tim Duncanson.

Yemenidjian said after the sale of MGM Studios, where he was CEO, he met Schwartz in April 2005. Over two years, the companies eyed several gaming industry opportunities.

In September 2008, the partners began purchasing Tropicana debt, preparing to make a play for the company that was under bankruptcy protection.

Onex, which has investments in the real estate, health care and aerospace industries, viewed the Tropicana as a good investment because of Yemenidjian’s expertise and the company’s ability to acquire the property out of bankruptcy.

“In 18 months, the Tropicana looks like a completely different place,” Schwartz told the board.

“We believe that the Las Vegas economy will return to the robust times of the past and that the Tropicana will rebound as well,” added Duncanson.

Located at Las Vegas Boulevard and Tropicana Avenue, the resort was the home of the Folies Bergere production show as well as headliners Sammy Davis Jr., Jack Benny, Phyllis Diller and Lou Rawls.