ATLANTIC CITY - A two-week relicensing hearing for the Tropicana Casino and Resort ended today with New Jersey's casino enforcement agency recommending a conditional one-year renewal instead of the standard five years.

In a stinging assessment, Yvonne Maher, director and lead attorney for the state Division of Gaming Enforcement said the chief executive of Tropicana owner Columbia Sussex Corp. "is not willing or able to run an Atlantic City casino." Maher characterized the executive, William J. Yung III, as having "bit off more than he could chew."

Maher's recommendation goes now to the New Jersey Casino Control Commission, which is expected to make a final ruling next week.

During the hearing, critics took the Tropicana management to task for laying off 900 workers this year - a move the casino blamed on falling revenue due, in part, to competition from Pennsylvania and New York slots parlors.

The dismissals, according to critics including employees' union Unite Here Local 54, led to unsanitary conditions, dirty restrooms and poor-quality food at the casino.

Paul O'Gara, attorney for Columbia Sussex argued vigorously for about an hour this afternoon that the company and Yung had the competence, integrity, financial stability and character to run the Tropicana effectively.

The hotel had a 94 percent occupancy rate and had spent $30 million on renovations. "This facility is being improved tremendously," O'Gara said.

Asked afterward for his reaction to Maher's recommendation, O'Gara said, "Obviously we want a longer term; we would like the five-year license."

Maher presented a laundry list of 26 conditions for the proposed one-year renewal, including requirements that the casino report quarterly to an independent audit committee, that it notify the commission of all customer complaints, and that it report any planned layoffs at least 15 days prior to their effective dates.

A critical test of whether the Tropicana qualifies for a license renewal hangs on a provision in the New Jersey Casino Control Act that authorizes the commission "to require each casino licensee to establish and maintain an approved hotel which is in all respects a superior, first-class facility of exceptional quality which will help restore Atlantic City as a resort, tourist and convention destination."

The act was passed in 1977, but has since been amended several times.

The Tropicana's license was due to expire at 12:01 a.m., last Saturday, but the commission extended it until a decision is reached on relicensing.

It's a case that has pit the Unite Here union local, which represents 16,500 casino and hospitality workers in a union-friendly town against privately held Columbia Sussex, a relative newcomer to Atlantic City.

The union pushed in the hearing for appointment of an outside party to oversee operation of the casino.

"We want it to be a first-class facility," union attorney Regina Hertzig said today. "This company doesn't have the wherewithal to run it that way."