Aladdin begins new era

September 1

At the Aladdin hotel and casino, workers had New York strip steak for breakfast this morning in the employee dining room. It was Robert Earl's way of saying thank you for persevering through 35 months of operating in bankruptcy.

Also today, earlier in the morning, a partnership headed by Earl took over the Strip resort which provides 2,567 rooms.

Audit and enforcement agents for the state Gaming Control Board came onto the property just before midnight Tuesday and witnessed the cash count as the books changed hands from Aladdin Gaming LLC to RE/BH LLC, the company that Earl used to buy the Aladdin. This is routine practice for the Board. Agents are said to be provided for help with questions and assurance of a smooth transaction.

RE/BH partners include Earl, Douglas Teitelbaum of Bay Harbour Management LC, New York, the financier of the deal, and Starwood Hotels and Resorts Worldwide Inc., White Plains, N.Y., which is an equity partner and will actually manage the hotel.

Now, the partners are on a 15-month timetable to change the casino-resort into the Planet Hollywood hotel and casino, the first such hotel under the moniker. Earl was a co-founder of the Planet Hollywood restaurant chain, headquartered in Orlando, Fla.

Earl's partnership won final regulatory approval for the deal Friday when the Nevada Gaming Commission allowed licensing. The partners were the winning bidder for the Aladdin in a U.S. Bankruptcy Court sale over a year ago, offering $637 million. When it opened in 2000, the Aladdin was said to be worth $1.2 billion.

For several managers and a small amount of employees in key departments, Tuesday was the last day of work at the Aladdin.

Earl said the property would keep the Aladdin name for many months while the company pumps $90 million worth of improvements into the place. The company has plans to compete fiercely in the entertainment area, and Earl stated that by the end of the year he hopes to announce a major signing of an entertainer to a deal similar to the one Caesars Entertainment Inc. has with singer Celine Dion.

The company plans to build a new 1,300-seat showroom and rearrange the 7,000-seat Aladdin Theatre for the Performing Arts to a smaller more intimate amount of approximately 3,200 seats.

As far as the casino goes, Mecca plans to rearrange and the floor and bring in new slot machines featuring the popular new ticketing technology.

Starwood, which plans to operate the hotel with its Sheraton brand, the purchase of the Aladdin gives the company its largest hotel in Las Vegas since the company sold Caesars Palace to its current owners in 1999. Also, Starwood operates the Westin-branded Casuarina on Flamingo Road, but the Aladdin is much larger and immediately became Starwood's largest property.

The company was keen towards regaining a foothold in Las Vegas because its customers wanted a Las Vegas resort to cash in the loyalty points they had accumulated by staying at Starwood properties.

Another factor of the Aladdin, the Desert Passage mall,  was not a part of the deal. The 140-store center was bought from Trizec Properties for an unannounced fee in late 2003 by a partnership made up of RFR Holdings and TriStar Capital, New York.

Earlier this year, RFR announced that it would be remodeling the mall and would also being changing its name.

Meanwhile, one of the top priorities for Earl is to fix issues with the Culinary Union, which demonstrated several times while regulators were conducting their investigation of Earl and his partners.

Union officials state that a majority of the Aladdin's workers want the Culinary to represent them in contract negotiations.