Chuck Monster had this right on the money: He called Sahara owner Sam Nazarian‘s bluff over and over and over again on the latter’s luxury-megaresort predictions for the aging, shuttered property. Today, the Clark County Commission took the wraps off Nazarian’s not-so-big remake of the Sahara. Out goes the roller-coaster (and, hopefully, the fugly NASCAR Café that the late Bill Bennett wrapped around it). In its place will be a beer garden — at least one presumes that the latter displaces the former, given the dearth of land onto which the Sahara can be reconfigured. Oh, and that SLS-branded, high-end hotel for Kardashian wannabes … yeah, forget you heard anything about it. Don’t cry for Speed: The Ride just yet. Rumor has it that Speed will pop up elsewhere on the Strip. It would be out of character for Nazarian to tear something down if he had a chance to sell it instead.
“A whole new look”? Well … kinda sorta.
Today’s revelation begs more questions than it answers. Why did it take Sahara Sam so long to figure out that neither the Strip economy nor the banking community had the appetite for additional megaresort development — particularly at a spot that is closer to the Stratosphere than to either Circus Circus or the Riviera? How will the hotel be repositioned now that The Naz has stripped it of furnishings, cleaning the property out in the biggest-ass rummage sale known to mankind? How does he intend to recapture his customer base now that he’s offloaded his database to MGM Resorts International and hard-wired M Life into his SBE Entertainment loyalty program? Why was it necessary to close the entire Sahara and pink-slip 1,050 employees if a low-cost makeover was Nazarian’s endgame? And will Smilin’ Sammy Naz apply for a gaming license this time around? If he doesn’t, any serious discussion of Sahara 2.0 is moot.
Giving Nazarian temporary benefit of the doubt, let’s say he can capitalize his scaled-down reinvention of the Sahara. Will his new market niche turn out to be the old one (or maybe a price point higher)? He could claim to have created the first “new” casino-hotel aimed at mid-market customers since Paris-Las Vegas, 12 years ago. He’d win fans with that strategy, middle-class customers having become inured to being priced out of The Next Big Thing. His revised plan is also far more in line with what the market will bear. And, by keeping the “bones” of the Sahara intact — but with its 1,720 hotel rooms reduced to 1,622 — Nazarian can get his new-old casino to market before Echelon or Fontainebleau. Even if Carl Icahn were inclined to finish the white elephant he adopted, I’ve seen no credible evidence to verify the shibboleth that F-blew is “70% complete” … quite the contrary, in fact.
When I hear “beer garden,” I don’t think “high end,” so it looks as though Sahara Sam has finally woken up and smelled the coffee. An isolated casino surrounded by vacant real estate and the world’s biggest schlock shop (Actual slogan: “If it’s in stock, we have it.”) isn’t the next hip, happenin’ spot in Vegas. Heck, I’d give Project Linq far better odds to pull in upscale dollars. If the plan presented is the real deal and not some sort of bluff, then Nazarian has finally gotten both serious and real about redeveloping on the Strip.
My only concern is that his developer is Penta Group and here’s why: Penta has been working on a new entrance and parking lot for UNLV‘s Paradise Campus, directly across from our house. I say “working” loosely, because actual physical labor is rarely to be seen and usually occurs at bizarre hours (they’ll commence banging away at 5:30 a.m., knock off by 9 a.m. and vanish for the remainder of the day). A job that could have been done in a couple of weeks is dragging on for months, absent any sense of urgency. If that’s Penta’s idea of “construction,” Nazarian might want to budget 10 years or more to get his party started.
Interesting, I’m not any more optimistic that we will see the Sahara open again, but I am intrigued. I’d be happy if they powerwashed and painted the whole place and sold it to someone like Boyd, to run as a low end spot.
Anything at the Sahaha site is a big plus for the Strip. The consensus on the internets after the closing was that the place would sit vacent for years, maybe decades, a la Lady Luck or the El Rancho of years past. I think a beer garden would be a good fit for that site. Of couse, I ain’t holding my breath for it to really happen in this economy. Vegas still needs a game changer and it won’t come from Nazarian but still it’s good news for the beleagured North Strip.
I think Mr. Nazarian is announcing a redevelopment in hoping he could get around a $200 million dollar loan to fix up the Sahara and rename it. The Tropicana’s redevelopment was around $180 million dollars so maybe Mr. Nazarian can get a loan also. His other hotels and nightclubs around the country are real nice so maybe with that impressive resume elsewhere he can find a bank to loan him some money. The major problem Mr. Nazarian has though is a location at Sahara and the Strip which at the present time is pretty far from most other casinos on the Strip.
Any idea how much he has made on the sahara by liquidating its assets and how much it cost him to buy? Could that have been his diabolical plan all along?
It’s unclear how much the rummage sale netted, especially since Sahara Sam apparently had to split the proceeds with the liquidators. The purchase price of the Sahara was never disclosed although conventional wisdom puts it in the vicinity of $350 million. I’m going from memory here, but I believe Nazarian recently retired the note for considerably less than face value, so it’s conceivable that he’s recouped his investment by stripping the Sahara and selling it for parts.
It’s not clear what the 100-room reduction of Sahara 2.0 would entail: Knocking down walls and consolidating rooms into suites? Cannibalizing rooms for meeting space? Something else? However, a Trop-sized budget would probably cover the basics (but the Moroccan look would probably have to stay). It’d certainly be a far more impressive commitment than the $20 million Barry Sternlicht is faintheartedly loaning to the Riviera or the half-assed effort made at the Plaza downtown. (I came. I saw. I was underwhelmed.)