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Imperial Palace owner Engelstad dies
By Liz Benston
Wednesday, Nov. 27, 2002 | 11:18 a.m.
Imperial Palace casino owner and Las Vegas Motor Speedway co-developer Ralph Engelstad, 72, died of cancer Tuesday night at his Las Vegas home.
A successful businessman and a philanthropist, Engelstad was one of the nation's few remaining independent casino owners.
His death throws into question the long-term future of the 2,700-room Las Vegas Imperial Palace, a centrally located property near Caesars Palace, The Venetian and Harrah's, among other flagship casinos. Also unclear is what will happen to his approximately 1,100-room Imperial Palace in Biloxi, Miss.
"This is something Las Vegas wants to see keep going," UNLV professor and gambling expert Bill Thompson said of the Las Vegas property. "It's a good convention property with lower rates and it was always full."
Though rumors about Engelstad's pending retirement have swirled about town for some time, he had not actively marketed the Imperial Palace for sale, brokers say.
In a letter issued today to the management, employees and friends of the Las Vegas Imperial Palace, Betty Engelstad said her husband passed away in his sleep at home Tuesday night after a "long and valiant battle with cancer."
"Ralph continued to conduct his business affairs up to the very end; but finally his body could no longer support his brilliant mind," she said in the letter.
"Before his passing, Ralph took all necessary steps to ensure the continuity of his business including the Imperial Palace hotel-casino. Myself, Betty Engelstad, with the advice and assistance of Ralph's longtime attorney Owen Nitz, and accountant Jeff Cooper, will oversee the hotel-casinos' continuing operations under the able management of Ed Crispell and all the many other very loyal department heads and employees of the hotel and casino," she said.
"Ralph always thought of all of you as his extended family and on behalf of Ralph and myself, let me extend many thanks for your past loyalty and industry," she said. "We will all miss him terribly but in his memory, we will continue to make the Imperial Palace a source of great pride, success and respect."
Many of the employees seemed downcast but operations went on as usual at the hotel-casino in Las Vegas.
Connie Ross, Imperial Palace's executive director of corporate advertising and publicity in Las Vegas, who has worked at the hotel-casino for 10 years, said she hopes Engelstad will be remembered for giving Las Vegas "a new industry in the Las Vegas Motor Speedway."
"Other things he did as an industry pioneer was that he was the first to establish a drive-through sports book and the first to establish an on-site medical clinic for Las Vegas guests and employees at the hotel-casino," she said.
There are 2,700 employees at the Imperial Palace in Las Vegas and 1,100 to 1,200 employees at the approximately 1,100-room Imperial Palace in Biloxi.
Ross said she hopes Engelstad won't be remembered for the different controversies he was involved in.
"He did have some extraordinary accomplishments. He was a genius as far as business goes. If he gave you his word, that was his bond," she said.
Engelstad, the grandson of Norwegian farmers from Minnesota, rose from humble beginnings to become a shrewd and competitive gaming operator. Yet his name will remain inextricably linked with two events that painted him as insensitive and racist.
"He was a tough guy who came up the hard way and stayed tough his whole life," said attorney Bob Peccole, a longtime friend who was the Imperial Palace in-house legal counsel from 1989 to 1995.
"But he also was a fair man in his dealings and was a man who gave away his money to help so many others. And he gave without seeking acknowledgement for it."
Peccole, a former member of the Nevada Gaming Commission, was close to Engelstad in the months following the controversy over Engelstad's Nazi memorabilia collection in the Imperial Palace in the 1980s.
He came aboard in June 1989, five months after the Nevada Gaming Control Board and Engelstad's other attorneys had reached a settlement to levy a $1.5 million fine against Engelstad for embarrassing the industry. It allowed him to keep his gaming license.
Engelstad had held parties in the resort's secret multimillion-dollar Nazi memorabilia room allegedly to observe Adolf Hitler's birthdays in 1986 and 1988. Engelstad later denounced Hitler, apologized for his error in judgement and emptied the room of nazi memorabilia.
"He was upset that people had interpreted his intentions so badly," Peccole said. Engelstad long maintained that the parties were to honor the employees who worked on the room, not Hitler.
"But few people really knew Ralph Engelstad. He was not a real open person. But I never heard him say a derogatory word about any person, group or religion."
Engelstad could be hard-nosed in all of his dealings, whether it was business or philanthropic. Such was the case in 1998 when he gave $100 million to his alma mater, the University of North Dakota, to build a field house for the hockey team.
"Ralph insisted that the school keep its (controversial) nickname, the Fighting Sioux, as a stipulation of the donation." Peccole said. "He felt it was the right thing to do."
Critics, however, called the Sioux name racist.
Engelstad, a goalie on his college hockey squad in the 1950s, had made several large gifts to the university, including a $5 million endowment his wife Betty established in 1988.
Born in Thief River Falls, Minn., Engelstad made his fortune first in the construction business in Las Vegas in the 1960s.
His company built commercial buildings at the Nevada Test Site and housing divisions in North Las Vegas. A street in that city is named for him.
In 1967, Engelstad sold 145 acres, including the North Las Vegas Air Terminal, for $2 million to billionaire Howard Hughes.
Engelstad used the money to purchase the Kona Kai motel which became the Klondike at the south end of the Strip. He eventually sold it.
In 1971, Engelstad purchased the old and decaying Flamingo Capri on the Strip and added some buildings and a casino. He reopened the Flamingo Capri a year later. In 1979, it became the Imperial Palace.
Engelstad used the resort to house his multimillion-dollar automobile collection that remains a popular attraction at the hotel. Ironically, one of the most valuable cars was Hitler's 1939 Grosser Mercedes parade car.
By 1989, Engelstad's wealth was estimated at $300 million, according to published accounts of the time.
"In some ways he was a lot like the people from the early days" of Las Vegas casino development, said Shannon Bybee, executive director of UNLV's International Gaming Institute. "People who make it on their own somehow ... want to do things their way."
Less known are his extensive philanthropical efforts. Engelstad has received both state and federal recognition for helping the disabled, including the "National Employer of the Year" award from the President's Committee on the Employment of People with Disabilities. About 13 percent of Imperial Palace employees have some form of disability.
He was also recognized as "Employer of the Year" by the Southwest Business, Industry and Rehabilitation Association and the "Humanitarian of the Year Award" from the International Gaming & Business Exposition. Several months ago, he was inducted into the North Dakota Entrepreneur Hall of Fame in recognition of his contributions in the construction, casino, entertainment and antique auto industries.
"Even though he was an intensely private, shy and reticent individual, Ralph was one of the largest philanthropists in America and he shunned any recognition for his good deeds," according to a statement issued by the Imperial Palace this morning.
Engelstad was a big player in the Mississippi gambling industry with his resort in Biloxi.
"We're sad to learn of his passing and expect his property, the Imperial Palace in Biloxi, to continue as usual," Leigh Ann Wilkins, director of public affairs for the Mississippi Gaming Commission, said.
Engelstad's Imperial Palace in Biloxi opened in December 1997. Mississippi's first casino opened in August 1992, while the Beau Rivage was the last casino to open in the state in March 1999.
"As the second to last operator to open a property on the Mississippi Gulf Coast, Engelstad did take a chance on the market and that chance paid off for him. Engelstad had the vision to see that there was still opportunity for growth in that gaming market," she said.
Engelstad also was one the central figures behind the creation of Las Vegas Motor Speedway. He and Bill Bennett of the Sahara Hotel provided the financing for and were the original owners of the speedway, before selling the $200-million plus facility to NASCAR track magnate O. Bruton Smith in December 1998.
"Without his vision for what motorsports could bring to Las Vegas, the Speedway obviously wouldn't be here today," said LVMS General Manager Chris Powell. "He and Bill Bennett took at least some type of a risk in building a speedway without a guarantee of there ever being a NASCAR Winston Cup date. But it worked out very well.
"The employees of the speedway and certainly the fans that enjoy the racing at the speedway owe him a debt of gratitude."
Gov. Kenny Guinn today added: "Ralph Engelstad was one of the real entrepreneurial pioneers of the Las Vegas strip. He was also one of the colorful characters that makes up Nevada's industry personality. He left his mark on our state's largest industry. He will be missed."
Imperial Palace purchase is strategic move for Harrah’s
By Liz Benston
Tuesday, Aug. 23, 2005 | 11:38 a.m.
Harrah's Entertainment Inc. has signed an agreement to purchase the Imperial Palace for $370 million, giving the company a larger foothold on the Strip and ownership of four adjacent casinos.
Harrah's said Imperial Palace management will continue to operate the 2,640-room property until the transaction closes, which is expected by the end of the year. The property employs more than 2,000 people.
The company said it has "no plans for substantial operational changes" at the property in the near term. But some Wall Street analysts said it would make the most financial sense to tear it down and build anew, as new Las Vegas resorts can generate higher profit than older properties that cost millions to maintain.
Harrah's has accumulated enough land between its O'Shea's, Flamingo, Imperial Palace and Harrah's casinos to eventually redevelop something new, analysts said.
Spokesman David Strow said the company hasn't decided whether it will implode the property.
"We have a number of options for this location and we will look at all those options," he said. "Whatever we decide we will proceed with a project that takes full advantage of its potential."
Rumors about the company's interest in the Imperial Palace have circulated for years and intensified with the purchase of Caesars Entertainment Inc. in June. Imperial Palace is located between Harrah's Las Vegas and the O'Shea's and Flamingo casinos, both of which Harrah's acquired from Caesars. Also this year, Harrah's acquired the Bourbon Street, a small hotel and casino on eight acres behind the Flamingo, as well as a few acres adjacent to the property.
Across Flamingo Road from its Flamingo resort, Harrah's expects to redevelop and rebrand its Bally's Las Vegas property.
"The Imperial Palace is located in the heart of the Las Vegas Strip and between two casinos we own. This was a property we absolutely wanted to have and have wanted for some time," Strow said.
Harrah's has been jockeying for a larger presence in Las Vegas, where the company had previously owned only two resorts. The company continues to eye expansion opportunities in Las Vegas because business remains strong and is avoiding expansion in other states where casino taxes are high and regulations are more burdensome, executives have said.
The transaction included no debt. Analysts said the transaction valued the 18.5-acre site at $20 million per acre -- near the top of land deals on the Strip in recent years.
Deutsche Bank stock analyst Marc Falcone said the company paid "a full price" for the land and will likely pursue some sort of "very large master plan expansion" on the site to make the deal worthwhile.
The purchase price underscores the value of land holdings on the Strip, though the largest operators aren't looking to sell and are focused instead on redevelopment, Susquehanna Financial Group stock analyst Eric Hausler said in a research note today. Moreover, few companies could afford a casino at this price "and pencil out any future returns at the property," Hausler said.
"It would have floored many investors a few years ago if they were told the Imperial Palace would fetch $20 million an acre in 2005," he said. "However, this is the reality of life on the Las Vegas Strip. Real estate is scarce and in order to play, you must pay up for it."
Hausler said the Imperial Palace "may be history by the end of 2006" and that Harrah's will try to purchase the nearby Barbary Coast from Boyd Gaming Corp., giving the company ownership of all the casinos stretching from Paris to Harrah's.
The Asian-themed Imperial Palace, which is privately-owned, recently renovated its casino floor and had begun remodeling hotel rooms as part of a multi-million-dollar upgrade. Prior to Monday's announcement, the Imperial also was in the process of updating its signage, promotional materials and logo.
Calls to Imperial Palace management were referred to Harrah's. Owen Nitz, an attorney and Imperial Palace trustee, did not return calls by press time.
The Imperial Palace opened in 1979 and is known for its classic car collection, luau parties and "Dealertainers" -- card dealers who look and dress like celebrities. The often-overlooked property does little in the way of major marketing campaigns but has historically had high occupancy rates because of its location and relatively cheap rooms.
Imperial Palace owner Ralph Engelstad died in 2002, leaving the property to his widow, Betty, and a group of trustees.
The sale did not include the Imperial Palace casino in Biloxi, Miss.
Last of cocktail waitresses settles suit with casino
Monday, July 10, 2000 | 11:05 a.m.
The trial in federal court filed against a Las Vegas hotel-casino by six cocktail waitresses came to an end today when the last woman accepted a cash settlement rather than a jury verdict.
The U.S. District Court jury was sent home on the verge of deciding whether Anne VanHoose was discriminated against by her bosses at the Imperial Palace when pregnancy pushed her figure beyond the seams of her form-fitted costume.
The trial drew national attention as a case pitting the rights of pregnant women against the gambling industry's stand that sex appeal sells.
The settlement between VanHoose and the Imperial Palace was announced in court this morning, just hours before the jury was scheduled to begin deliberations following a three-day trial.
Five other cocktail waitresses in the lawsuit agreed to settle their cases last week as the trial unfolded before U.S. District Judge Lloyd George. All signed confidentiality agreements preventing them from disclosing how much money they received in exchange for settling their case against Imperial Palace.
"We're glad that this matter has been resolved to everyone's satisfaction," Ed Crispell, Imperial Palace general manager, said after the last settlement was announced. "The Imperial Palace family is the most important thing to us, and these disruptions were unnecessary."
Peter Laura, an attorney for the federal Equal Employment Opportunity Commission, which filed the action on behalf of the women, said the case was the "final nail in the coffin for the whole idea that you can take pregnant cocktail waitresses off the floor."
Laura said the four women represented by the EEOC received a total of $105,000. The settlements ranged from $17,500 to $30,000, he said. The federal agency is not bound by the confidentiality clause included in the settlement agreements, he said.
Two other women were represented by a private attorney.
Laura said the judge indicated late Friday he would likely rule the jury could not consider whether punitive damages were required against the company. VanHoose said she decided to accept the settlement when it appeared the company would not be forced to pay for allegedly discriminating against her and the other women.
The women alleged in their class-action lawsuit that the hotel-casino violated federal employment laws when it moved them from their lucrative positions on the casino floor because they were pregnant. The women were forced to take lower-paying jobs with fewer hours when they could no longer fit into their skimpy uniforms, according to the lawsuit.
Several of the women testified last week the policy caused them to have health and financial problems in the midst of their pregnancies. The cocktail waitresses were seeking lost wages and punitive damages against the Imperial Palace.
Three of the women agreed to a settlement on Thursday, the day after the trial started, and two more followed Friday. The five women -- Jennifer Jones, Glenda Austin, Lori Neville, Yolanda Brakens and Rebecca Soto -- accepted the cash settlements last week.
Attorneys for the Imperial Palace argued at trial the women signed agreements before being hired that regulated their appearance, including a provision that they would not gain more than six pounds. The hotel-casino's policy regarding pregnant cocktail waitresses was changed in 1997, three months after the first complaint was filed. Cocktail waitresses are now allowed to wear a modified uniform and keep their serving jobs if they become pregnant.