Our in-house historian, David McKee, replies …
The North Strip’s future can be summarized in one word: bleak. The edge of the abyss that was formerly represented by Sahara Avenue now has crept south to Circus Circus Drive and Riviera Boulevard.
MGM Resorts International owns a massive swath of land from behind Circus Circus, sweeping around a few timeshare towers and up to the corner of Sahara and the Strip. A few years ago, that was intended for CityCenter North, a joint venture with the Kerzner family of South African gambling magnates. However, given the enormous financial disappointment MGM has been experiencing at CityCenter, a second version of that $8.5 billion project is extremely improbable.
The Riviera is trying to hang in there with a new, nostalgia-themed marketing position and entertainment lineup (recently adding bingo to its casino offerings). A change of ownership has enabled a $20 million loan for refreshing the building. But that may not go very far in a casino-resort of the Riviera’s sheer immensity. It sprawls all the way back to the Las Vegas Hilton. (Tropicana Las Vegas’ bargain-minded makeover still managed to cost $185 million. The downtown Plaza hotel, much smaller than the Riv, needed $35 million for even a very partial renovation.)
The Riviera also literally sits in the shadow of the massive Fontainebleau hulk. Owned by Carl Icahn, who bought it out of bankruptcy, F-bleau could cost as much as $2 billion to finish. Icahn has been selling off F-bleau furniture, which has turned up at the Tropicana, the Plaza, and even out at Buffalo Bill’s, in Primm. There’s a rumor that he’s willing to sell the structural steel in the Jeffrey Soffer-built tower to anyone willing to pay the cost of dismantling the building.
Further north is the old Wet n’ Wild site, once home to a popular water park that landlords Paul and Sue Lowden foolishly evicted in 2004. Since then, a $618 million sale of the site to Texas developer Christopher Milam and Australian casino heir James Packer couldn’t be consummated. A sports-arena project didn’t get off the drawing board either, largely because it required an infusion of taxpayer dollars. The only use the shallow-pocketed Lowdens have been able to get for the land was when it was a staging area for F-bleau construction materials.
Which brings us to the Sahara. After the family of the late Bill Bennett sold it to Los Angeles nightclub mogul Sam Nazarian, its existence was marked by one cost-cutting measure after another, until Nazarian took the ultimate austerity move and shut the place down last May. He has promised – frequently – to restore the Sahara to its glory as an SLS-branded megaresort that will draw $200/night room rates from SoCal hipsters.
There are a few problems with this scenario. One is that Nazarian himself has never applied for a gaming license and, without casino revenue, he would have very little or no chance of recouping his investment. Secondly, in one of the quid pro quo deals that presaged the Sahara’s closing, Nazarian merged his SBE nightclub loyalty program with MGM’s M Life, enabling MGM to tap Nazarian’s customer base and siphon it into MGM’s hotels, casinos, restaurants, etc.
Thirdly, Club Sahara information was sold to MGM and absorbed by the Circus Circus Players Club database. Lastly, unless F-bleau (and possibly Boyd Gaming’s dormant Echelon) were to be hastily revived and completed, a reopened Sahara would be sitting a couple of blocks from the far north end of the action – i.e., Circus Circus – in miserable isolation, unlikely to draw foot traffic.
Last April, Nazarian told the Los Angeles Times he was going to implode at least some of the Sahara and replace it with a six-restaurant, two-nightclub casino resort, opening in 2014. That’s a pretty short timeline for a erecting a Vegas megaresort. Five months after his proclamation all that’s been heard has been … silence.
At the present, several mid-Strip projects are either hanging fire – like the Venetian’s St. Regis condo tower – still on the drawing board (the "Project Linq" makeover of O’Shea’s and Imperial Palace) or financially unproven, such as CityCenter and the Cosmopolitan. Visitation and hotel occupancy are improving, but not enough to keep pace with the 15,000 new, high-end hotel rooms that were dumped into the market during the Great Recession. Also, interest in downtown Las Vegas is experiencing a resurgence. Possibly emboldened by the Plaza’s re-do, the venerable Golden Gate has just announced a $12 million facelift. Night spots like Insert Coins and Vanguard are trying to attract the club crowd currently synonymous with the Strip.
Las Vegas still has a long way to go to even get back to where it was four years ago, before the big "supply shock" hit the market. Barring an unforeseen wave of prosperity and a return to the days when MGM could borrow $2 billion without pledging any collateral, the prospect of new construction at the north end of the Strip seems very distant indeed.
