Fertitta to rescue A.C. Hilton?

By David McKee ~ September 22nd, 2010 @ 3:36 pm

Tilman Fertitta, that is. The Landry’s Restaurants CEO has sussed out a bargain on the Boardwalk, in the form of the unprofitable Atlantic City Hilton. No doubt Fertitta’s interest has not a little something to do with the fact that the Hilton began life as the Golden Nugget, 30 years ago. The Hilton’s present — but not for long — owner, Colony Capital, borrowed an insane amount of money against the property. Creditors have tired of dickering with Colony CEO Tom Barrack and are attempting to take control of the Hilton through the courts. Enter Landry’s, which wants to buy the place out of potential receivership. Its CEO has a not-unwarranted reputation for micromanagement, so dreaded A.C. Hilton boss Nick Ribis will be outta there. Landry’s two existing Nuggets (one in Laughlin) showed slightly improved revenues in 2Q10 and represented 24% of the company’s total revenue base.

Once Tilman fixes his eye upon a quarry, he’s not easily discouraged. Also, unlike some of his colleagues in the industry, when Fertitta vows that he’ll reinvest in and improve the Hilton, you can take it to the bank. The expansions and upgrades he’s performed at the Nugget in downtown Las Vegas have made it the Rolls-Royce of Fremont Street casinos. That’s not quite the compliment it ought to be, through no fault of Landry’s. Too bad there’s not a property of that caliber servicing middle-class customers on the Strip, although the Tropicana Las Vegas shows signs of regaining its erstwhile luster.

Anyway, an operations-oriented owner, no more Colony, no more Ribis … what’s not to like here?

Ditto the new Starbucks that’s the latest attraction at the Tropicana Atlantic City. The management team inherited by Carl Icahn continues spiffing up the place. Regardless of whether they or Starbucks get credit for the eco-friendly design concept that uses recycled brick- and ironwork, it’s a splendid notion.

Showing the flag. The U.S. government has opened diplomatic relations with three American-owned casinos in Macao, as it were. Consul General Stephen Young has been paying closer attention to the former Portugese colony, in part because Wynn Resorts, MGM Resorts International and Las Vegas Sands have so many billions invested there. Unfortunately, slave-trafficking, drugs and money-laundering (and the risk that U.S. companies could become tainted by the latter, especially) are other major reasons for Young’s higher profile.

“I’ve been assured by [Macanese strongman Fernando Chui] and others that the necessary workers that these guys need to do their jobs to both build and run casinos will be available,” said Young, without offering specifics. Since the “necessary workers” cannot be obtained in sufficient number without relaxing Macao’s 1:1 ratio of guest workers to residents, there’s no other way to construe Young’s remarks than that he’s obtained a wink-and-nod indications that the quota will be relaxed or he’s negotiating toward that end.

Closer to home, Sheldon Adelson got a boost from news that the addition of table games is providing an enormous boost to previously underperforming Sands Bethlehem. (Sands officials did have the nerve to say the casino would do better once its long-delayed hotel opens next spring — the hotel Sands recently threatened to leave unfinished indefinitely.) That helps make up for slot grosses which are very middle-of-the-pack, at best.

Statewide, table games drove a 24% increase in casino revenues. Top performers in the tables department were — no surprise — Parx Casino and Harrah’s Chester Downs, with Sands finishing third. After a sputtering start, Mohegan Sun at Pocono Downs, moved from ninth place to fifth in table revenue. And no, I don’t know why the Pennsylvania Gaming Control Board reports slot grosses on a weekly basis but table revenues on a monthly ones, especially when it results in slot dollars from two discrete months getting muddled together.

The Plaza shutdown still doesn’t look entirely kosher. A large number of the employees getting the sack are reported to be housekeepers — i.e., Culinary Union members. This would explain why casino boss Bobby Ray Harris felt it imperative to shut not one but both hotel towers down. It’s a salary dump. Thanks, Tamares Group for doing your part to raise to Nevada‘s 14.4% unemployment rate even higher. Question is, will a human sacrifice of this magnitude appease the financiers who are holding a $56 million note on the Plaza? If you’re Harrah’s Entertainment you can wring a mortgage-restructuring out of your lenders. If you own three third-rate casinos in Downtown … eh, not so much. If Mr. Harris shows up to run your casino once his tenure at Tamares is done, I’d suggest consulting the “Help Wanted” ads.

It’s merely my opinion but … Sharron Angle is kind of a dick. (Speaking as a sufferer from mental illness, I’ll bet she’d put air quotes around that malady, too.) However, given the way we Nevadans shamelessly freeload off of tourists, the lady’s selfish attitudes are but an exaggerated version of our own. As Pogo sagely observed, we have met the enemy and it is us.

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