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Rod Smith

Aladdin Buyers Issue Letter to Reassure Rank-and-File Staff

17 August 2004

LAS VEGAS -- The likely new owner of the Aladdin, whose gaming licenses are up for final approval before state regulators next week, is trying to send reassuring messages to rank-and-file employees of the Strip hotel-casino that their jobs are safe.

At same time, the Planet Hollywood investor group that is buying the Strip property has sent pink slips to about two dozen top executives that they will be terminated if the deal goes through.

Planet Hollywood spokeswoman Amy Sadowsky said both moves were expected and only a small percentage of the resort's top management has been given notice.

To reassure line workers at the Aladdin, the investor group is circulating a recently produced newsletter saying they will all become "team members" at the new Planet Hollywood hotel-casino.

The newsletter says team members will enjoy some of the finest wages, benefits and opportunities in the gaming industry. It also said they will all be put through an "unsurpassed training program."

Benefits are an issue partly because the Aladdin has been the target of labor organizing efforts by Culinary Local 226 since it opened in 2000.

Aladdin workers released a petition in March claiming a supermajority of employees at the Strip property had signed cards demanding union recognition and a contract with the resort's future owners.

A key to the dispute has been management's insistence on a secret-ballot election rather than accepting the union's preference for collecting worker signatures on cards and petitions.

Planet Hollywood Chief Executive Officer Robert Earl, who could not be reached Monday, has said he will be open to meeting with employees and the union after Sept. 1 when the sale of the hotel-casino is now set to close.

Culinary spokesman Kevin Kline said Monday the union hasn't heard from the buyers of the Aladdin, but union officials will be in a position to open new discussions after the takeover.

"We look forward to having a very positive relationship with Planet Hollywood. The problems to date have been with the current owners," he said.

Aladdin President Bill Timmins was traveling and could not be reached for comment.

Kline also commended the Planet Hollywood group for keeping the current rank-and-file workers at the Aladdin.

"They've stuck this thing out through thick and thin. We're hoping when Planet Hollywood comes in they'll have a progressive attitude toward employees like other employers in town in terms of card check neutrality," Kline said.

Aladdin bosses filed for bankruptcy protection from creditors on Sept. 28, 2001, after opening on Aug. 18, 2000. Executives blamed the bankruptcy on slow initial business, which was compounded by the dramatic tourism slowdown that followed the Sept. 11, 2001, terrorist attacks.

OpBiz, the name the Planet Hollywood group used to front its offer to buy Aladdin, won the right at auction last June to buy the property for $635 million.

Earl's group, which includes Starwood Hotels & Resorts and Bay Harbour Management of New York, plans to invest $90 million to dramatically improve its Stripfront access, including using Planet Hollywood's logo to create a giant globe entryway.

The Nevada Gaming Control Board last week gave the Planet Hollywood group conditional approval for gaming licenses.

However, the group still has to provide financial documentation requested by the board before winning final approval from the Nevada Gaming Commission, which is scheduled to consider the licenses Aug. 26.

Longtime Las Vegas gaming executive Michael Mecca, who will serve as president of the hotel-casino and who signed the newsletter, said the new owners have started planning to rebrand the property to Planet Hollywood.

He said they have hired Pasadena, Calif.-based Dougall Design to design the new look for the troubled property and have hired Las Vegas-based Klai Juba Architects to work on the designs for renovations.

Once source close to Planet Hollywood management who asked not to be named said management-level reductions in force are standard operating procedures when new owners plan major operational changes.

In addition, the source said that some top level decision-makers generally are replaced with new executives who are more attuned to changes new owners want to make and more enthusiastic about turning an operation such as the Aladdin into a profitable undertaking.