Question of the Day - 22 April 2007

In early January of this year, privately owned Kentucky-based Columbia Sussex Corporation completed its purchase of the Tropicana’s Aztar Corporation for $2.75 billion; the whole deal took eight months to consummate.

Soon thereafter, Columbia, which also owns the Westin Casuarina in Las Vegas, Ramada Express and River Palms in Laughlin, the Tropicana in Atlantic City, the Mont Bleu and Horizon at South Lake Tahoe, and a small riverboat casino in Indiana, announced plans to invest another $2 billion in the 34-acre property to add as many as 9,000 hotel and condo units, plus a million square feet of retail, dining, entertainment, and convention and meeting space. At the time, Columbia claimed that the Tropicana would continue to operate throughout the radical upgrade of the property (which raised a few eyebrows hereabouts).

However, company officials also claimed that layoffs would be minimal, but according to a story in the Las Vegas Business Press (3/20/07), the cuts at both the Las Vegas and Atlantic City Tropicanas have been "deep."

Also, according to use permits filed with the Clark County Planning Commission, Columbia had originally planned not to knock down either of the Tropicana’s existing towers. But the Business Press story reported, "A source close to the Las Vegas Tropicana [says] that the property’s Island Tower will be torn down, contrary to earlier statements by owner Columbia Entertainment."

So the news out of the Las Vegas Tropicana is a bit uncertain. Still, it seems unlikely that even if the Island Tower is torn down by this July (which also seems unlikely) that the rest of the hotel-casino would shut down too. What happens, eventually, to the big expansion plans is, at this point, anyone’s guess.

Columbia Sussex maintains that the 9,000-room project is still "on," once the company's borrowing ability improves. The official budget has risen to $3.5 billion, which would constitute a bargain in the current construction market. The last year has not been kind to Columbia Sussex, which had the Atlantic City Tropicana confiscated by the State of New Jersey, for sundry malfeasances, and which had to sell its Indiana riverboat, lest that get taken away too (and to stave off default on its considerable debt). If the rebuilding of the Tropicana comes off as planned, it is expected to look like this. Note that the Paradise Tower and Folies Bergere theater are retained, per earlier reports, but the Island Tower doesn't figure in the next iteration of the Trop.