Culinary vs. Station... & the High Stakes for the Entire State

This was the scene outside Red Rock Resort last night.



And this is the new local battle in the national "war" over workers' rights.

On Thursday, the Culinary again went sideways, scheduling a rally at Red Rock Resort the same night the property was hosting a big fundraiser for Bishop Gorman, the Catholic high school, at which the Engelstad Family Foundation was to be honored. [...]

To Taylor, however, this is all just noise.

“We have a very different view of time,” said Taylor, the union’s longtime leader.

“If somebody told me we’d have a six-year strike at the Frontier, I would have said, ‘I don’t think so,’” he said, referring to the legendary walkout of the now imploded property.

If the Fertitta brothers, who control Station Casinos, seem dug in, the workers are just as hunkered down, Taylor said.

“Those workers are not going anywhere, and they feel very strong and they’re extremely determined,” he said.

As Patrick Coolican noted in his Sun column today, Culinary and Station have been fighting this battle on some peculiar fronts. Culinary has gone after UFC (which is also owned by the Fertitta clan), while Station has gone from warm, fuzzy "We Love Locals" TV ads to brutal "We Hate the Union" 90 second commercials pounding Las Vegas airwaves.



And even some of the traditional splits of the labor vs. management fight have been shaken up. Harry Reid has apparently expressed concern about how an extended Culinary vs. Station fight court hurt Las Vegas' image to tourists and conventioneers, while Bishop Gorman's President actually reached out to Culinary to ensure their protest last night could go on as scheduled (without interfering with their fundraiser).

And this war is not just being fought in the media. Culinary has called out Assembly Member Marcus Conklin (D-Las Vegas) for doing a fundraiser with Fertitta family members (one of them being a former Station Casinos executive), This is increasingly high stakes because Conklin wants to become the next Assembly Speaker, but he must first survive a tough reelection campaign in what's now a tossup district. I'm sure he must have appreciated the Clark County Democratic Party passing this resolution in support of Culinary 226, collective bargaining, and workers' right to organize and form unions. (Snark... And by the way, I'll do a disclaimer and note that I'm a member of the Clark County Democratic Party Central Committee.)

Even the AFL-CIO, which once had hard feelings over Culinary's parent union joining with SEIU in breaking away from the AFL-CIO several years back, is now teaming up with Culinary to take on Station Casinos and prevent Station from encouraging union hotels on The Strip and Downtown from going after their unions when contracts are up for renewal. National AFL-CIO President Richard Trumka was at the Red Rock Rally last night, and he told the media last night that the AFL-CIO is even considering a national boycott of Station Casinos. This is obviously becoming very high stakes for both sides.

And really, this is high stakes for Southern Nevada in general. On one hand, there is reason for concern as both Culinary and Station continue to up the ante in their ad wars and media skirmishes. As Las Vegas' gaming & tourism sector is finally starting to see a steady recovery, do we really want to put that at risk with an extended labor-management dispute?

However, we also can't forget this. Coolican finished his latest Sun column by noting this.

In the end, Taylor’s effectiveness can be found as plain as day in the contracts his members have secured. Our room attendants make 30 percent more than the national average, and unlike many of their peers, they have excellent health benefits secured by the Culinary contract. Those higher wages are also enjoyed by workers at nonunion hotels such as Station and Las Vegas Sands properties because they have to offer good pay to attract good workers.

Station has a lot of advantages in this fight. But don’t expect Taylor or the union to back down. Ever.

Believe it or not, we're unique in making these jobs ones with living wages. In almost every other part of the country, hotel workers are considered "lucky" if they're paid above minimum wage. And make no mistake about it, this is a big deal. Because union workers on the Las Vegas Strip and in Downtown Las Vegas do earn a living wage, they can afford to spend more and contribute to the greater Nevada economy. Even the non-union shops, like Station and Las Vegas Sands, have had to raise wages and benefits to remain competitive with union friendly casino operators like MGM Resorts and Caesars. But if Station "goes nuclear" on Culinary and encourages other companies to turn anti-union, then our entire economy is at risk of collapsing over the collapse of well-paying, stable union jobs.

There's really a whole lot at stake for all of us in the Culinary vs. Station fight. And we simply can't afford for the workers to lose this one.

Casinos: Station Gets a(nother) Lifeline

Well, so much for us knowing the final fate of Station Casinos sooner rather than later...

Station Casinos is getting a little extra time as the exclusive company or group to draw up a reorganization plan in its $6.6 billion bankruptcy case.

U.S. Bankruptcy Court Judge Gregg Zive gave the Las Vegas casino company until mid July to exclusively put forth a plan on how to emerge from its debt.

His approval came after creditors and independent lenders withdrew opposition to an extension. Attorneys for the groups initially wanted the exclusive right to draft a plan to end May 24 so they and others could prepare their own bankruptcy plan.

Zive had been leaning toward giving Stations the extension, saying, “I’m not sure why we should open the door to that type of distraction,” referring to others who might submit rival plans.

But issues remain over Station's proposed auction and PropCo/OpCo divide.

Deutsche Bank and JP Morgan hold a $2.475 billion mortgage on four of Station’s most valuable properties: Red Rock Resort, Sunset Station, Boulder Station and Palace Station. They and Station Executives Frank and Lorenzo Fertitta would take over those four casinos.

Another 13 casinos would be put up at an auction.

The Fertittas and the banks have put together a proposal to bid $772 million for those 13 casinos. But other companies could outbid them.

The judge also allowed the lenders and creditors additional time to take depositions from two more officials. Zive will hear additional arguments Wednesday on the bidding procedures but said he won’t rule until later hearings set for May 26-27 in Reno.

Lawyers for Station Casinos objected to allowing more depositions. Thomas Kreller, attorney for Station Casinos, said it gave the bondholders, creditors and lenders 50 reports and allowed them to take depositions from five officials.

But lawyers for the creditors and others told Zive they have not been able to get all the necessary information to assess the proposed reorganization plan. They argued that they need to know how the “stalking horse” plan was selected and want to know the value of such things as customer lists and land.

“There is no evidence on the value of the excluded assets,” said Eric Winston, attorney for the creditors’ community.

And apparently there is also an emerging problem with Texas Station, as the Fertittas want to auction off the casino but NOT the land underneath it. So this ain't over yet, not by a longshot.

So far, it seems Station has been lucking out in getting the judge to mostly agree to what the Fertittas, Colony Capital, Deutsche Bank, and JP Morgan Chase want. We'll have to see if their luck will ever run dry in this case.

I just wonder how much of a chance Boyd really has now in getting any of these casinos...

Casinos: Boyd Gaming Swings Back to $8.4 Million Q1 Profit, Still Wants Station's Casinos

So Boyd reported earnings this morning. They went from a $0.16 per share, or $13.8 million total, loss in Q1 2009 to a $0.10 per share, or $8.4 million total, profit. So how did they do it? Apparently they've been cutting costs rather aggressively, as net revenue actually fell 8.4 percent to $398.4 million from $434.8 million in Q1 2009.

Still, Boyd stated in its report that there's good reason to be more bullish on Las Vegas these days.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, commented on the quarter: "We continue to be encouraged by improving trends in our business, which clearly reflect the signs of an emerging recovery. Our Las Vegas Locals market reported the best year-over-year comparison in nearly two years, and business levels are returning to normal seasonal patterns in this region. Given the positive developments in our business, combined with continued improvement in the national economy, we expect to generate year-over-year growth during the second half of 2010."

Looking at the internals, it seems like the locals' casinos are starting to recover their footing. Boyd's locals' casinos' Q1 2010 EBITDA was off only 10.8% from Q1 2009, compared to Boyd's Downtown casinos' EBITDA dropping 37.3%. No wonder why Boyd isn't pursuing any more Downtown casinos, but is still aggressively going after Station Casinos.

During Tuesday’s conference call, Smith said Boyd is still aggressively pursuing the acquisition of Station Casinos’ assets.

In December, Boyd made an offer to purchase Station Casinos’ assets in an effort to expand its locals market. The offer was $2.45 billion for the company’s 18 casinos and casino-hotels in Southern Nevada.

“We welcome the opportunity to compete for Station [Casinos] assets so long as the process is competitive, open and fair and as long as the assets have not been devalued to a point where it no longer makes financial sense,” Smith said.

So the picture is becoming clearer now. Boyd seems to have found the "magic formula" of expense cuts and travel/gaming promotion to return its locals' casinos to profitability (thereby taking the entire company back to black), so it thinks it can make money off Station's casinos. But wait, can they negotiate a deal with the Greenspuns on GVR and Aliante? And can they run these and the other "OpCo" properties without Station's Boarding Pass (players' club program) feeding locals and non-Strip travelers into the casinos? Apparently so, or so Boyd execs think.

Casinos: More Station-Boyd Drama! Oh, and Culinary 226 Still Isn't Keeping Its Mouth Shut, Either.

Yay! Happy b-day to me, I get to laugh at more Station-Boyd gaming. The Fertittas may have thought they were safe when they struck an agreement with their creditors last month to emerge out of bankruptcy wholly intact, but I guess Boyd Gaming thinks differently. This is what they said when they announced narrower losses than expected in their Q4 2009 earnings report.

During a conference call with investors and analysts today, Boyd executives reaffirmed the company’s commitment to acquiring Station Casinos’ assets and discussed the company’s view of the current condition of the Las Vegas locals market. [...]

“This offer stands and we are actively pursuing these assets,” [Boyd President & CEO Keith] Smith said. “We believe we can offer the greatest possible value to the majority of Station’s creditors. There is no one who is in a better position to manage those assets properly.”

And I guess there's still an opening with Boyd, especially with creditors still objecting about the Fertittas' spending habits of late... And even U.S. Bankruptcy Judge Greg Zive asking his own questions about possible overbilling.

U.S. Bankruptcy Judge Greg Zive told lawyers Tuesday he would look for overbilling and questioned expense accounts. He approved $12 million in interim fees and expenses for law and accounting firms.

The judge noted that progress has been made in an agreement with key lenders and the company in clearing the way for Station to emerge from bankruptcy. Attorney Paul Aronzon told the judge there has been "good progress" and a creditors meeting is set for March 5. [...]

Most of the hearing was taken up with the judge approving the request for interim payment of fees and expenses, but Zive had several questions.

For example, one accounting firm charged $19,500 in hotel bills. Zive pointed out that Station Casinos has hotels where the representatives of FTI Consulting Inc. can stay.

"I don't know if the hotels still comp, but we need to be careful," Zive said. "This is not a large amount of money but it doesn't have to be."

The judge approved $3.9 million in fees and expenses for one law firm where some 50 attorneys and legal assistants are working on the case representing Station.

The judge noted two lawyers in the firm of Milbank, Tweed, Hadley & McCloy are charging $995 an hour and a small group of others are billing at $900 to $950 an hour.

"When you bill at that rate, I expect a great deal of efficiency," he said.

The judge then threatened to hire a court-appointed fee examiner to investigate of Station's expenses keep spiraling out of control.

So I guess this is what I'm thinking about the whole ordeal now.



Don't like my Gaga? Too bad, bitchez! It's my birthday, dammit! Oh yeah, what was I talking about again? Oh, that's right, back to Station and Boyd. ;-)

I guess Station isn't really out of the woods just yet. As always, the Fertittas' wacky spending habits and self-enrichment schemes are coming back to bite them. And as long as they keep screwing with their own company like this, there will always be some kind of opening for Boyd.

And by the way, Station also still has to deal with its stubborn refusal to let its workers organize.

Hundreds of workers from Station Casinos founded a union organizing committee last week and are meeting at the Culinary Workers Union, Local 226 today. The workers have called on the company to agree to a fair process for workers to form a union free from management interference, intimidation and harassment. The Culinary and Bartenders unions have informed the company’s owners, partners, creditors and the National Labor Relations Board of the committee’s formation.

Station Casinos answered the workers’ request for a fair process with threats and intimidation. Yesterday, the unions filed an Unfair Labor Practice charge against the company with the National Labor Relations Board alleging the company violated federal labor law in over 100 incidences by threatening, surveilling, physically assaulting and intimidating workers for their union activities.

“I’ve worked at Palace Station for 18 years,” said Casino Porter and Organizing Committee Member Casiano Corpus. “I joined the organizing committee because I want a better future for myself, my family and my co-workers. Station Casinos may not want a union, but it is not their decision to make. It is our decision and they shouldn’t try to scare or intimidate us because of our union activity.”

Since a management-led buyout in November 2007 that paid Station Casinos insiders $660 million, the company has subcontracted out its coffee shops and its uniform department to outside operators. Hundreds of workers have lost their jobs with the company as a result. The company has also cut hours, made permanent lay offs, suspended the workers’ 401(k) match, and raised employees’ health insurance premiums. [...]

“These workers are standing up for themselves and their families,” said Geoconda Arguello-Kline, Culinary Workers Union President. “The company and the workers are in a very difficult position right now because the 2007 buyout increased the company’s debt and left it unable to weather the economic downturn. The company is making decisions that affect these workers lives and their ability to take care of themselves and their families. The workers didn’t create this mess, but they are suffering as a result. We are going to do everything we can so they can achieve the respect they deserve and take care of their families with dignity.”

It's already looking ugly with accusations of violent assault (FOX-5 video) now flying. So for now, the sordid soap opera that's become "The Station Casinos Bankruptcy Case" continues.

Hehe, Boyd is ON THE PROWL for Station!

Please excuse me while I LMAO some more at the Fertitta empire as it comes closer to being gobbled up by someone else.

Boyd Gaming Corp. of Las Vegas today made another offer to buy Station Casinos Inc. -- this one for $2.45 billion for the company with 18 casinos and hotel-casinos in Southern Nevada.

With Station carrying $6.8 billion in debt and other liabilities and operating in Chapter 11 bankruptcy, acceptance of the $2.45 billion offer likely would cause creditors and investors to take billions of dollars in losses. [...]

Boyd, one of just a few gaming companies considered to be in sound financial shape and capable of buying Station without over-leveraging itself, has been persistent in pursuit of Station.

Boyd is on the prowl and ready for the kill!

"Combining Station with our current portfolio is consistent with our strategy of growing our presence in the Las Vegas locals market. The transaction contemplated by this proposal will allow us to leverage our 35 years of operating experience in the Las Vegas market to maximize the full potential of Station’s assets. Given this compelling strategic fit, and Boyd Gaming’s position as a licensed operator with strong financial capabilities, we continue to believe that the acquisition of the Station assets by Boyd Gaming is the optimal way forward for Station and will create the most value for Station’s creditors," Boyd said in a letter to Station.

"Importantly, Boyd Gaming is in the best position to execute a smooth transition of ownership and operate the Station properties efficiently from day one. We believe our proposal is in the best interests of Station’s employees, vendors, customers, and the Las Vegas community as it will help to strengthen the local economy and preserve thousands of jobs," the Boyd letter said. "We believe our offer price represents fair value to Station’s stakeholders and takes into account current market conditions, our deep knowledge of the gaming industry and Station’s publicly disclosed financial performance."

"Our proposal to acquire both the 'OpCo Assets’ and the 'PropCo Assets’ reflects the belief that there is more value in keeping these assets together rather than separating them. We believe that combining Station’s assets with Boyd Gaming will result in the greatest number of benefits for stakeholders," the letter [from Boyd Gaming] said.

Well, what else can I say? As I've said before, Station Casinos had it coming. So not only are the creditors furious, and not only is Culinary 226 ready for all out warfare against Station execs, but Boyd is now back in the game and ready to snatch them at a fire sale price in bankruptcy court.

Still, I must admit I'm conflicted about this possible Boyd acquisition of Station. On one hand, Station has been piling up reckless amounts of debt for years while continuing to treat their workers like crap. But on the other hand, I don't know if Boyd's really a better employer... And this deal will create a near-monopoly of Off-Strip casinos for Boyd. And as we've all seen with just two companies controlling so much of The Strip, it's dangerous to have so many casinos concentrated in so few hands.

So I guess we'll have to wait and see what happens next for Station. And if Boyd and/or some other "vultures" capture Station in bankruptcy court, the Fertittas only have themselves to blame for it.