What makes Sammy run?

Scarcely was the ink dry on Sahara owner Sammy “The Naz” Nazarian‘s announcement of the property’s May 16 closure than rumors began to fly about his endgame for the old gal. At S&G, we’re pretty certain that “The Naz” (™ Chuck Monster) has a three-point plan for the Sahara which runs as follows …

Informed speculation has it that Nazarian’s shutdown of the property is a ploy to get the Culinary Union out and eventually reopen something there as a non-union property. It wouldn’t be a first (see Adelson, Sheldon or Tamares Group [in re Plaza]). Undoubtedly the only reason Columbia Sussex didn’t play that card in its long war of attrition to de-unionize the Tropicana Las Vegas was that ColSux was hurting so badly for cash flow it didn’t dare close the place.

Nazarian’s SBE definitely dared. That might explain why, at a time when the Trop, the downtown Plaza and even Buffalo Bill’s were redoing their hotels at rock-bottom prices made possible by Fontainebleau‘s insolvency and a Vegas-era construction meltdown, SBE napped. Operators like Alex Yemenidjian have shown that it’s possible to reinvent a property for a few hundred million … and one might think Nazarian’s two-dozen Los Angeles-area nightclubs and three hotels would be throwing off enough cash flow to perform a retheming comparable to what Onex Corp. did with the Trop. No dice.

There’s also talk along the Strip that Nazarian isn’t totally blowing smoke about a “comprehensive solution” to the Sahara and is gearing up to approach capital markets for the diñero to execute his long-promised redevelopment of the site into an SLS-branded hotel. If so, there may be a few flaws in his plan. First off, who’s going to commit to a 10-figure project in Las Vegas at a time when the fiscal jury’s still out on $3.9 billion The Cosmopolitan and looking grim for $8.5 billion CityCenter?

Also, the Sahara sits in not-so-splendid isolation (like Nazarian pal Heidi Montag‘s solitary brain cell) at the top of the Strip. All Sammy’s douchebags and all The Naz’s bottle service aren’t going to get customers up there unless Carl Icahn does a 180 and restarts F-bleau and Boyd Gaming accelerates its timetable for Echelon — preferably both simultaneously. Chances of this happening: very low. Meanwhile, the tendrils of M life will be wrapping themselves around the SB Preferred customer network, now that Nazarian is in business with MGM Resorts International. Unless he can get MGM to go into “SLSahara” with him, he’ll probably awake to learn that the Lion has eaten his lunch. (Shouldn’t that loyalty program be called BS Preferred … but again I digress.)

Lastly, SBE’s stewardship of the Sahara was foredoomed by Nazarian’s decision not to purse a gaming license. By law, that means ownership can’t drink from the juicy casino revenue stream. Any Nazarian plan, past or future, that requires making ends meet strictly off room, restaurant and entertainment revenues isn’t going to cut it. Unless and until Sammy Naz (left) puts in for that license, everything else is just talk.

Giving the devil his due, gaming experts like Andrew Zarnett and UNLV‘s Dr. David G. Schwartz point out that market forces had the Sahara in a vise and it was only a matter of time before the economy started forcing casinos out of business. Schwartz forecasts a potential domino effect that could claim Hooters (seemingly in trouble since time immemorial), ColSux’s Westin Casuarina, the nearby Tuscany and even Nazarian investor Colony Capital‘s Las Vegas Hilton. Sammy Naz’s one-two punch of ineptitude and malign neglect pushed the Sahara to the head of the closure queue, however.

Additional speculation has Boyd or Penn National Gaming making a bargain-basement pitch for the Sahara. Penn CEO Peter Carlino had the unfortunate tendency of slagging older Strip properties when he was shopping around for a Sin City foothold (eventually alighting at M Resort). He’ll have a tough time squaring a Sahara offer with his public dissing of the Riviera and Trop. However, not only Boyd but Penn — proven operators both — would be clearly preferable to a continuation of SBE’s unfunny comedy of errors.