Soon, possibly. Last week, it was reported in the Wall Street Journal that the Sahara’s owners – primarily nightclub owner SBE Entertainment – had bought back the $288 million mortgage on the property, at an undisclosed markdown. SBE founder Sam Nazarian has hired architects who will, he says, "evaluate a range of options for the property." Needless to say, that "range of options" could include implosion. Some of the hotel’s high-rise rooms date back to 1959, a time when Vegas visitors expected smaller, less-fancy lodgings than are the norm on the Strip nowadays.
Ever since he closed the Sahara last May 16, Nazarian has promised to reopen it under his SLS (stands for "Style, Luxury, Service") moniker. Gensler Architects, planners of CityCenter, have been retained to see what can be done with the property. One previous (unexecuted) redesign would have removed all Moroccan trappings – including the onion-domed porte cochere and the giant neon marquee -- and redone the exterior in vivid white. "But to move forward SBE and Stockbridge [Real Estate] still need to come up with funding for the renovations," the Journal’s Alexandra Berzon reports.
That may be difficult. The cost of remaking the Sahara will run at least into hundreds of millions, probably billions of dollars. It’s not just the exterior that will need a makeover. Over the course of four months, the interior has been plucked clean. Nazarian hired liquidation experts to sell 600,000-plus pieces of Sahara inventory, a process that ended in mid-September. (It is suspected that the giant rummage sale provided Nazarian with the wherewithal to retire the mortgage.) "Everything and anything that had ‘Sahara’ on it was popular. It didn’t matter if it was a deck of cards or a cup," National Content Liquidators President Donald Hayes told the Las Vegas Sun.
Getting Wall Street to underwrite a casino megaresort at the present time could also be difficult. The Sahara is blocks away from the nearest casinos, Circus Circus and the Stratosphere, neither of which is a hangout for the high rollers and young party-hard crowd that Nazarian desires as his client base. True, Caesars Entertainment has been able to finance over $500 million of recent and upcoming property improvements … but at the center of the Strip, not out on the periphery, where the Sahara lies.
Since Nazarian now owns the Sahara site free and clear, talk of reconstruction could be a means to gin up the value of the land. Nazarian paid an estimated $20 million an acre for the 17.5-acre parcel in 2007. Now that he’s paid off the mortgage at a discount, Nazarian could be looking to flip the land and recoup his investment in that manner. Or he could buck the odds and try to rebuild, although it’s an upriver swim in the current economy.
