Tropicana's other problems

Add Philadelphia; Baton Rouge, La.; and Las Vegas to the list of places where Columbia-Sussex Corp. - which lost its license to operate the Tropicana Casino & Resort in Atlantic City last week - faces issues ranging from health-code violations to the possible loss of other gaming licenses.

Its casino licenses in Indiana, Louisiana and Nevada appear in jeopardy, while labor demonstrations have been ongoing at its hotel in Baltimore and Tropicana casino in Las Vegas, where members of two unions have been working without a contract for months.

Yesterday, the company - based in Fort Mitchell, Ky. - said it would sell its casinos in Vicksburg, Miss., and Evansville, Ind., to raise money to pay off lenders. The company is also in the midst of trying to find a buyer for the Tropicana in Atlantic City.

In addition, the company faces health-code violations at one of its Philadelphia properties, the Sheraton Philadelphia City Center. City officials said that while the violations found in one of the hotel's kitchens were officially deemed "critical," they were not unusual for a large commercial kitchen. Unsanitary conditions at the Atlantic City Tropicana were a factor in the loss of its New Jersey gaming license.

The company announced a plan yesterday to sell some of its properties to pay down debt.

"In short order, we have developed a plan to address challenges by selling our properties in Atlantic City, Evansville and Vicksburg in an orderly manner," the company said. Cash from the sales will help it pay off some senior debt, according to William J. Yung III, chief executive officer and president of Tropicana Entertainment, the gambling subsidiary of Columbia-Sussex.

The company said last week that it might seek bankruptcy protection if it were unsuccessful in appealing the licensing decision of the New Jersey Casino Control Commission.

A state-appointed trustee - former New Jersey State Supreme Court Justice Gary Stein - took over the operation of the Tropicana on Dec. 12 after the commission's ruling, and a conservator will seek a suitable buyer for the property.

Columbia-Sussex's decision to sell in other states may not have been by choice.

In Indiana, where Columbia-Sussex owns Casino Aztar in Evansville, a provision in the state's gambling law specifically states that a company that loses its license in another jurisdiction cannot hold a gambling license in Indiana.

Phil Sicuso, general counsel for the Indiana Gaming Commission, said yesterday that Columbia-Sussex is up for license renewal there in March.

"We are analyzing the full effect of what happened in New Jersey," he said. "Indiana wouldn't oppose a sale. That's definitely the best decision for everyone in Indiana if a sale goes through."

Sicuso said Columbia-Sussex had been under investigation in Indiana for some time over complaints like those that led to its undoing in New Jersey - poor service resulting from drastic staffing reductions and faulty operating procedures.

The company is also in danger of losing its license in Louisiana, where it owns the Belle of Baton Rouge, a gambling hall with 800 slot machines.

According to the Louisiana Gaming Control Law, once a company loses its gaming license in another state, it can lose its Louisiana license for five years.

The company is also undergoing turmoil with several of its hotels.

Although the negative publicity of recent weeks has focused on its Atlantic City operation, Columbia-Sussex is the nation's largest licensee of Marriott Hotels throughout the country. It operates about 80 hotels, including the Sheraton Philadelphia City Center and the Renaissance Hotel & Resort near Philadelphia International Airport.

In October 2005, Columbia-Sussex acquired 14 Wyndham Hotels for $1.4 billion, including the former Wyndham at Franklin Plaza in Philadelphia, which it operates under the Sheraton brand.

Since June 2006, that hotel's kitchen area has had numerous health-code violations that included fly and roach infestation, according to city health inspection reports.

The Sheraton had previously been cited for health-code violations in June and August 2006. Those violations had been corrected, according to Izzat Melhem, acting director of environmental health services at the Philadelphia Health Department.

Yesterday, city health inspectors were back at the Sheraton to conduct a reinspection over three critical violations that were noted Sept. 27. They included roach infestation under the dishwasher, fruit-fly infestation throughout, and lack of a food-safety-certified individual.

The inspectors reported that the hotel had taken care of the fruit flies and named a certified food-safety manager, but still had one critical violation: "House flies were observed in the dishwasher area," said yesterday's inspection report.

Calls to Sheraton general manager Paul Schwartz were not returned.

There have been no health-code violations at its Renaissance airport property, according to Alice Doyle, health inspector for Tinicum Township, Delaware County, where the hotel is located.

But the company's problems are not limited to Atlantic City and Philadelphia.

D. Taylor, secretary treasurer of Culinary Workers Union Local 226, which represents about 60,000 casino and hospitality workers in Las Vegas, contends that Columbia-Sussex should be stripped of its license in Nevada as well.

Taylor said the Las Vegas Tropicana was the only casino in the city where his members have worked without a contract. The last one expired June 1.

He said Columbia-Sussex proposed about two weeks ago to drop employee health and pension plans, while setting no limit on subcontracted work and the use of part-timers with no benefits.

"It would bring a McDonald's-like work environment to the casino industry, which the casino industry is not about," Taylor said.

He said that about a quarter of Tropicana's workforce had been laid off since January, when Columbia-Sussex assumed control of the property.

Hud Englehart, a spokesman for Columbia-Sussex, said last night that the company's proposals were fair.

"Our proposals offered wages well above prevailing rates on the Strip," he said. ". . . Subject to the negotiations, we asked the union to consider a package that is centered on customer responsiveness."

Columbia-Sussex also owns the Sheraton Baltimore City Center Hotel, the second-largest hotel in Baltimore. Union and community demonstrations have been staged at that hotel for the last year and a half, since the last union contract expired, over working conditions and low wages.

"Just like what happened in Atlantic City, deep reductions in staff have resulted in less-than-optimal sanitary conditions," said Roxie Herbekian, associate director for Unite Here Mid-Atlantic Region and chief negotiator with Columbia-Sussex.

She said union members had called for a boycott of the Baltimore Sheraton since Nov. 15.

Herbekian said about $1.5 million of business has been pulled because of the boycott, most notably the Democratic National Committee and the United Way. Both organizations confirmed canceling their events last month at the hotel.

"The union has consistently tried to denigrate the business . . . same old tactics," Englehart said, ". . . costing their own employees a very big payday."