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Rod Smith

Stardust's Unionized Staff Backs Deal

20 February 2006

Union workers at the Stardust approved an agreement Thursday night that Culinary Local 226's top official, Secretary-Treasurer D. Taylor, described as the new gaming industry standard for treating displaced workers.

The agreement has four key provisions dealing with the union's main concerns for 1,005 covered workers who will be displaced when the Stardust is destroyed early next year to make way for Boyd Gaming Corp.'s planned $4 billion Echelon Place.

Taylor said more than 95 percent of the Stardust's unionized workers supported the deal, but he wouldn't give an exact count.

The deal includes a graduated severance package that promises workers with 20 or more years of service $10,000 if their jobs are eliminated.

For example, if a restaurant has to be closed before the Stardust is imploded, workers will be covered, down to junior employees with less than one year of service, who would get $1,000 severance.

The agreement also gives Stardust employees preference in placement at other Boyd Gaming properties.

The deal establishes neutrality for the union when Echelon Place opens, assuring workers will have the same card check rights to organize as workers now have at most other Strip hotel-casinos.

The deal also gives current Stardust employees preference in placement at Echelon Place when it opens, probably in 2010.

Taylor said Friday that the union and its workers are pleased with the agreement.

"This is a package no other company has ever agreed to before. For us, it's now the standard for other companies and we congratulate (Boyd Gaming Chairman Bill) Boyd and the company for stepping up," he said.

Boyd Gaming spokesman Rob Stillwell said the company also feels good about the agreement.

"Our employees have always been an important part of our success at all our properties," he said.

Stillwell declined to comment on plans for handling similar issues with the Stardust's 894 nonunion employees.

However, Boyd Gaming started meeting with nonunion workers Feb. 15 to present its plans for retaining and reassigning as many of them as possible, he said.

Deutsche Bank analyst Andrew Zarnett said the Culinary agreement was typical of the approach Bill Boyd takes in dealing with all customers, vendors and workers.

"The contract now gives them a very strong position in hiring the best people in the marketplace when Echelon opens," he said.

"There will be tough competition for workers in 2008, (200)9 and (20)10 and this gives Echelon a really good edge in attracting the very best employees," Zarnett said.

Brian Gordon, a partner in Las Vegas-based financial consultants Applied Analysis, said the deal allows Boyd Gaming to keep key, quality workers in their employment pool until Echelon opens as well as keeping other companies from poaching on its workforce.

"It demonstrates their commitment to customers and their employees and strengthens the relationships with the workers," he said. "Plus, with expansion in the market, competition for workers is going to increase (as other projects) open. This is a very good way for Boyd Gaming to maintain its market share of qualified workers."

At the beginning of January, Boyd Gaming Corp. announced plans for redeveloping the 63-acre site now occupied by the Stardust. In mid-January, Boyd Gaming executives met with the union to discuss plans for the Stardust's union workers.

Taylor said the union raised concerns with the company then involving the closure, severance payments and placement of workers.

Company officials said in early February they had developed a plan to retain as many of the 1,899 Stardust union and nonunion workers as possible, even after it demolishes the iconic tower to make room for the new resort. At the time, however, they did not disclose any details.

The $4 billion Echelon Place will include 5,300 hotel rooms, 1 million square feet of meeting and convention space, 350,000 square feet of retail stores and a 140,000-square-foot casino.

Echelon Place will feature the $2.9 billion wholly owned Echelon Resort with hotel and retail joint ventures between Boyd Gaming and partners who have yet to be disclosed.

Boyd Gaming will own and operate the 3,300-room Echelon Resort, which will include a 2,600-room Resort Tower and a 700-room Suite Tower, with each containing its own spa.

It will include a 4,000-seat theater with stadium seating designed to accommodate concerts and production shows and a 1,500-seat theater for smaller shows and touring acts.

Boyd Gaming has also entered a management agreement with Shangri-La Hotels and Resorts, the Asian Pacific's leading luxury hotel group, to include a Shangri-La Hotel within Echelon Place.

The Shangri-La Hotel, Las Vegas, Boyd Gaming will own and Shangri-La will operate, will include 400 guest rooms and suites, a 20,000-square-foot spa, meeting space and two restaurants.

Boyd Gaming has entered a 50-50 joint venture agreement with the Morgans Hotel Group, a developer of lifestyle-boutique hotels, for the construction of two hotels within Echelon Place.

As part of the master-planned project, Boyd Gaming will develop, own and operate the Las Vegas ExpoCenter at Echelon Place. The Las Vegas ExpoCenter will feature 650,000 square feet of exhibition space and 175,000 square feet of meeting and conference space.