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Gaming Guru

Michael J. Mishak

It's union time or demolition for Imperial Palace

16 April 2007

LAS VEGAS, Nevada -- Imperial Palace, once the most virulently anti-union property on the Strip, will almost certainly become unionized if it is not imploded by its new owners.

The Culinary Union expects little difficulty in organizing workers at the fading property, which Harrah's Entertainment Inc. bought for $370 million two years ago.

Either way - whether the IP is unionized or imploded - the Venetian appears destined to become the only nonunion property on the Strip.

The topic has emerged as the union negotiates a new contract with Harrah's.

Current five-year pacts, affecting about 50,000 hotel and restaurant service workers, expire June 1. About 16,500 of those workers are employed by Harrah's; 21,000 more work for MGM Mirage.

D. Taylor, secretary-treasurer of the Culinary Union, said the union asked Harrah's about the fate of Imperial Palace in a negotiating session Wednesday. The company, he said, didn't have an immediate answer.

Since the sale in 2005 casino industry insiders and Wall Street analysts have expected Harrah's to implode Imperial Palace to capitalize on the property's prized Strip location. The 2,600-room property was part of a master redevelopment plan the company worked on last year.

Sensing Imperial Palace's almost certain demise, the Culinary delayed attempts to unionize it. "We had made a decision that if we picked it up and then it got blown up, there wouldn't be a lot of benefit there," Taylor said.

But then Harrah's redevelopment plan was delayed with the announcement last year that two private equity firms, Apollo Management and Texas Pacific Group, would be buying the company for $17.1 billion. Shareholders approved the deal last week.

Although the official fate of Imperial Palace remains uncertain, industry insiders and financial analysts expect the new owners to maintain the property, mostly to help pay down the $10.7 billion in debt they'll incur to finance the purchase.

Ed Crispell, longtime vice president and general manager of Imperial Palace, and Marilyn Wynn, the company's lead negotiator in the Harrah's talks, could not be reached Thursday.

All this opens the door for the Culinary.

Taylor said if Imperial Palace remains open, the Culinary will "proceed in an appropriate way," meaning the union would move to organize the property.

For its part, Imperial Palace has had an infamous history.

Taylor said the Culinary tried to organize the property about the time of its opening in the late 1970s, but its organizers were beaten and tossed off the premises.

Nevada historian Michael Green said owner Ralph Engelstad, who died of cancer in 2002, and Venetian owner Sheldon Adelson share a philosophy about organized labor: "If the boss is good to you, why do you need a union?"

In the 1980s Engelstad was found to have displayed Nazi war memorabilia in a private room at Imperial Palace. He also admitted to holding private parties at the hotel on Adolf Hitler's birthday. Bartenders wore shirts bearing the Nazi dictator's picture and the slogan "Adolf Hitler - European Tour 1939-45."

Engelstad later apologized, but the controversy resulted in the Nevada Gaming Commission leveling a $1.5 million fine against him for embarrassing the industry.

It's union time or demolition for Imperial Palace is republished from