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Sahara To Be Demolished*, SLS Hotel Opening 2014

By Chuckmonster on Wednesday, 13th April 2011 3:55pm
  » filed under Las Vegas  comments: 17


SBE honcho Sam Nazarian has definitely learned the Steve Wynn Style of how to use newspaper column inches to his advantage. This time, he gets the Los Angeles Times to trumpet him as "the West Coast's most powerful nightclub operator" without actually visiting the places he's bought and assessing how much power is really contained therein.

Yes, SBE is gobbling up local nightclub & bar operators. Yes, he's forged a deal to toss M Life into the mix at these clubs too. Yes, he's managed to talk MGM suits into turning Fontana Bar at Bellagio into Hyde Lounge. He's managed to turn a coupla real estate flips and sales of a cellphone store into megawad conglomerate that brought him to buy the Sahara Hotel and Casino in Las Vegas for $330M a few years ago.

Sahara, in its current form has proven to not be "economically viable," hence the announcement that it will be closing on May 16 to be surrounded with fencing and patrolled by security golf carts until... well... who knows.

Riding on the wave of recent acquisitions, Nazarian chatted up the Los Angeles Times to feed hype towards an SBE stock IPO. Within, he painted Sahara closure with the same pie-in-your-thighs "special sauce" he painted his initial purchase with. Put on your reality distortion helmets, kids, The Naz is about to drop the other Saharan shoe. Sahara isn't closing because it/he/they failed, it is closing because they're going to destroy the property to build and open an SLS Hotel with six restaurants and two nightclubs in 2014. So sayeth Sam:

We've spent $30 million in design development drives; we're shovel-ready. If we were admitting defeat we would have admitted it.

Where's the public release of mouthwatering renderings? Where's the facts and figures? Who is the architect of record? Where's the big press conference with suited bozos carrying silver shovels and SLS branded chrome hard hats? What about the presentation before Clark County Planning Commission? Where's the press release touting where the money to build this - $3,4,5,6 Billion dollars? - is coming from? Is it possible to destroy and cart away Sahara and build a gigantic new place in 3 years? Where's the SLS Vegas website, with countdown clock, construction cam and sultry photos arranged in a sexy, 'this should be your life' kinda way?

It doesn't exist. None of it. Like nearly everything Sam Nazarian and SBE have said about their goings on in Las Vegas, this is all a magic trick.

My money is on Boyd Gaming, figuratively. Until Boyd makes a decision about Echelon, and acts on it one way or the other, no development at the northern end of the Strip makes financial sense. Echelon is the linchpin, and Boyd is one of the smartest, shrewdest operators in the space. They saw the writing on the wall before anyone did and made the difficult, but presciently brilliant move of pouring liquid nitrogen on Echelon just as it was starting to blast skyward.

Until then, Nazarian's wishful thinking that a brand new SLS Hotel - saddled with multi-billion dollars in debt load - makes more sense than a broken down, busted but still operating Sahara Hotel - saddled with a coupla hundred million in debt load that operates at a comparative trickle of a loss - only makes sense when the end of the game (the IPO) comes before you need to reach the actual goal line.

Coming soon to the Las Vegas Strip: Sam Nazarian's Hog Wash and Casino.

* Update: read the comments... at least partially demolished.

Tagged: sahara   sam nazarian   sbe   


Comments & Discussion:

What!! so they are going to implode the Sahara???

Also, what the hell does SLS stand for? Sahara las vegas?

sls stands for "style luxury service"

Boyd doesn't need Strip land and already has Orleans and Gold Coast in close proximity to the Strip. Orleans is bigger, newer (obv.) and better than Sahara and is the joint where Boyd sends the folks who used to go to the Stardust and the Boyd customers from the midwest, south and AC.
I'd be shocked if Boyd bought Sahara. If I had to pick some entity, maybe Colony (dollar-cost averaging its earlier disastrous casino investments) or Onex (like the Trop as a long-term RE play). But my best bet is that it just sits there until Nazarian's creditors grab it.

sorry Chuck, I am missing the "demolished" part. I get:

"...the plan from the beginning was to close the hotel for renovation. He said he was committed to reopening it in 2014 as an SLS Las Vegas..."

still sounds like a renovation rather than a new building...

jeff i agree. no way boyd buys sahara... that rumor is bad juju from the get go. why buy and fix a busted piece of shit when they can just finish what they've already got. my mention of boyd is that they are the bell weather of the north strip. when boyd gets back into the game, that is when the game starts.

mostly demolished?

i dont think the article was referring to Boyd buying the sahara, but Boyd restarting Echelon, in one form or another. Having that graveyard next to the Frontier hole, plus a shuttered Fblue, makes it a ghost town up there. Even if [insert whoever here] remodels Sahara, it still loses out by not having neighbors that can also help to draw business and foot traffic.

Agreed, Chuck. I'll be surprised if Boyd does anything on the site (other than tear down the steel they've already erected) within the next few years, and shocked if they decided to go ahead with building the original Echelon hotel. The full project (with Morgans) obviously won't happen.
I think the most interesting story on the North Strip will be the F'bleau. Icahn has the money to wait for Strip prop values and/or Strip operating conditions to improve.
Too bad Boyd imploded the Stardust. Its tower wasn't that old and the property would still be the Tiffany of the Strip's bottom-tier casinos.

"... and Boyd is one of the smartest, shrewdest operators in the space. They saw the writing on the wall before anyone did and made the difficult, but presciently brilliant move of pouring liquid nitrogen on Echelon just as it was starting to blast skyward."

Meh, I dunno. Echelon felt like the "me too" entry in the dumbass pissing competition of that era, and a late one at that. I give them credit for sobering up, but that didn't happen until they had already leveled Stardust and traded Barbary Coast for a parcel of land. A lot of "stupid" carried the day inside Boyd HQ before they finally saw the light.

Sources tell me mechanicals of the building are in dire straits - hvac, engineering, etc. The building is the absolute opposite of energy efficient. It is certainly possible that they have figured out ways to mitigate some of this.

The original Sahara renovation plan was to demo one of the older towers and demo the parking garage and build a new tower. If his plan is the same as he originally stated, then Sahara - a sizeable chunk of it - will be demolished.

This was the 2008 plan: http://www.vegastripping.com/news/news.php?news_id=1934

Boyd very pointedly did not include condos Echelon--they clearly read the market right on that one.

And even though I thought pulling the plug was a lousy idea when they did it, Boyd has been vindicated.

ah yeah makes a lot of sense...I was quite curious how one could turn the shell of the Sahara into anything remotely relevant these days.

simpsonlasvegas, i think you are dead on with the Fbleu story. what is it, like 70% done? once the market does get moving again, it's the perfect entry point for a new player wanting to get going fast. Icahn has more money than he knows what to do with, so he can just sit on it until the market is ripe, then sell it to someone looking for quick entry... besides, his history is not one of running the show but rather trading the pieces. he bought low, he will sell high.

the big question to me is, who will want to jump on that property? a new player? one of the current players? only time will tell...but after hearing the comments on the bones of the building during the DeRuyter Butler Vegas Gang podcast, I can't imagine Icahn getting the premium he will want from a major player already in the market. I smell "new" money in the end...

and that 2008 piece on sahara sent me browsing the archives, coming up with this gem:

"It surely is exciting to see what's going to happen to the north end of the strip."

Famous last words...


it certainly was wasn't it?

So he's blowing smoke up everyone's ass to see if people are paying attention to him? Not that I wouldnt mind seeing something at that end of Vegas worth going to but that isnt happening until someone has the nads to finish off the Fontanbleu. If that happens then maybe Boyd would consider it but until then I will wander down and see the steel girders of Echelon as some of the best art in Vegas.

now here's something I have NEVER understood (borrowed from http://www.vegaschatter.com/story/2011/4/13/184550/186/vegas-travel/The_SLS_Las_Vegas_Will_Rise_from_the_Dust_of_The_Sahara_by_2014)

"Nazarian will also have make the SLS different from Cosmopolitan as they are essentially going after the same demographic (young wealthy partiers) with their smorgasboard of nightclubs and restaurants."

>>going after the same demographic (young wealthy partiers)
>>(young wealthy partiers)


I am young, poor, and a drinker. Why is there no casino for me?

Oh wait O'Sheas is still open? Never mind I'm good...

throw it back.

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