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Golden Gate Co-Owner Pleads Case

LAS VEGAS - Most of the Golden Gate's 106 hotel rooms were built in 1906 or 1930.

The casino floor has 400 slot machines, not the 2,200 of the average Strip megaresort.

The San Francisco-themed joint has two restaurants, no pool, health spa or gift shop.

Its money-making potential is limited, especially in downtown's deeply troubled casino market, said Golden Gate managing partner Mark Brandenburg.

That was never clearer than last year, he argued, when the hotel-casino recorded a net operating loss of $300,000, a multiyear reality that has seen him forgo any salary for a "substantial" period.

"The key issue with us is simply the lack of rooms," Brandenburg said. "Because of our structure we lack the tools that are important to compete on the same level of other hotels."

Brandenburg and his brother, Craig Ghelfi, have become the targets of union anger since the wee hours of Monday morning.

That's when the pair failed to negotiate a new five-year contract with leaders of Culinary Local 226 and Bartender's Local 165, making it the last of 35 Las Vegas casino properties to work toward a deal.

The agreement would see hourly wage and benefit increases of $2.20-an-hour for each of the Golden Gate's 175 union members in the fifth year of the contract.

Brandenburg refused to go along, and strike placards quickly appeared, leaving the property's 200 nonunion employees to staff the place.

John Wilhelm, the unions' chief negotiator, argues that Brandenburg has never kept his word, breaking contract agreements in 1984, as well as in December when the Golden Gate failed to make a scheduled hourly pay increase of 40 cents for each of its union members.

Brandenburg estimates December's pay increase would have increased this year's corporate costs by $150,000.

The newly negotiated contracts with 17 hotel-casinos would raise the Golden Gate's expenses by at least $2 million in the final year of the five-year deal, he said.

"I don't have that kind of money," Brandenburg argued.

But Wilhelm, who heads the Hotel Employees and Restaurant Employees International union, questions the veracity of that statement.

"Mr. Brandenburg has a lengthy history of making agreements and reneging on them," said the labor leader, noting that Brandenburg has repeatedly "welshed" on deals.

The two have known each other since 1984 when Brandenburg was a lawyer representing the Golden Gate, which was owned by a San Francisco group.

In the early 1990s, Brandenburg and his brother used their personal money and sizable bank loans to buy out the Golden Gate's other partners, giving the brothers full ownership.

The 48-year-old Brandenburg, the younger of the two, estimates that he and the 50-year-old Ghelfi have invested millions in the Golden Gate, although he declined to offer a specific figure.

"We have tried to turn our weakness into a strength," Brandenburg said. "We've got this very old antiquated building, but yes, it's historic Las Vegas."

Their sizable investment leaves Wilhelm bemused by Brandenburg's claims of corporate poverty.

"Why would you (buy the Golden Gate) if nobody's making any money?" Wilhelm asks. "That's completely illogical. We just have to go by logic. They're not stupid by any stretch of the imagination."

Meanwhile, the fortunes of the downtown casino market declined amid competition from the Strip and neighborhood casino building boom, the spread of legalized gambling to other states and the introduction of California tribal gaming.

"This gaming market changed over the course of the last decade in ways nobody ever envisioned," Brandenburg said.

The Golden Gate boss has offered to open his books to union leaders, an offer Wilhelm has declined.

"Frankly, I don't have a lot of confidence in that process," the labor leader said.

What remains is a potentially lengthy strike that has three likely solutions: negotiation of a new contract, the Golden Gate's sale or the property's closure.

"I want to settle. That's the only real option for us right now," Brandenburg said Wednesday, "but it has to be settlement on a realistic contract."

Wilhelm struck an ominous tone in response.

"If the strike continues," he said, "I think closure will be the inevitable result."

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