10/04/2001 11:00PM

Trouble in fairyland: Bad business sinks Aladdin

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When the operators of the Aladdin filed for Chapter 11 bankruptcy protection last week, they bought precious time for the struggling megaresort.

Ever since the old Aladdin was imploded on April 27, 1998, the Aladdin project has come under intense scrutiny. That's what happens when the rebuilding price tag mushrooms to more than $1.4 billion.

In another Las Vegas era, cost overruns and poor early business at the Flamingo "shortened" the life of Bugsy Siegel. Thank goodness corporate America reacts differently to bad news nowadays.

But back in July 2000, Nevada Gaming Control Board member Bobby Siller, at a board meeting, openly criticized the business acumen of Jack Sommer, overseer of the Sommer Family Trust, which owns 57 percent of the Aladdin. "Everything you touch seems to go wrong in a horrible way," Siller was quoted as saying in a Las Vegas Review-Journal article. "It doesn't appear to me you conducted your business by thinking things out."

Review-Journal columnist John L. Smith wrote on the Aladdin's one-year anniversary: "Like a tale from the Arabian Nights, the Aladdin offers walk-up visitors a mystery in the form of a question: How could a resort that cost $1.4 billion be built without a front door?"

Actually, there is a front door to the Aladdin. It's just that it is located on Harmon Avenue, a side street off of Las Vegas Boulevard.

My first personal impressions of the Aladdin came one day after the Aug. 18, 2000, opening. I headed straight to the race and sports book, because that's where my betting interests lie. What I saw disturbed me. There were three rows of counters for racing and three rows for sports, eight seats per row. My math added up to only 48 seats, but the Aladdin officially calls it 50.

The vegas.com website, which rarely publishes a negative word about this town, describes the Aladdin book as "one of the smallest on the Strip. It's cleverly designed but noticeably undersized. . . . The book doesn't have an electronic board. It posts lines on TV's above the small betting counter. . . . during the crowded football and basketball seasons bettors will have a long wait for their line to appear."

This exercise is not meant to nitpick. Rather it points out basic design and marketing flaws that hindered Aladdin from day one. There are many more examples, but listing them would just be piling it on.

More important is that the Aladdin is a beautiful structure, has fantastic hotel accommodations, and its Desert Passage shopping mall takes a back seat to none in Las Vegas. Its location at the corner of Harmon and the Strip means it has high-volume neighbors in the MGM Grand, Bally's, Bellagio, Monte Carlo, and New York New York.

As with the Flamingo 50 years ago, a sharp operator will likely assume control of the Aladdin and do what is necessary to make it successful. That suitor could eventually be Park Place Entertainment. PPE already owns about one-third of the Aladdin's publicly traded bonds.

Richard Eng is turf editor for the Las Vegas Review-Journal and host of the Race Day Las Vegas Wrap-Up Show.