Two Way Hard Three | Las Vegas Casino & Design Blog

Having never set foot in the Sahara (frankly, I forget it's even there), I'm not sure what he has to work with, but my impression is that it is not unlike the other older properties (what's left of them) in town; i.e., a hodge-podge of additions and renovations of varying quality surrounding a core infrastructure that was built during the Eisenhower administration. I just can't believe there is much he can do before the cost of renovation exceeds the cost of simply tearing it all down and starting over.

What he does have working for him is the location, which long-term should be a winner. And if his target market of cost-conscious 20-somethings don't need a 600 sq. ft. room with marble bath, perhaps he can pull it off.

Very interesting, Hunter. By the way, it's available online without a subscription today. I've noticed a lot more stories are free since Murdoch bought the WSJ.

Sahara and the Riviera are both hodge-podge properties as Socalduck described it. The comments about the kitchen and plumbing point out the problems. Maybe Nazarian can buy some time, but when times get better and the North Strip blooms with CityCenter North, Fontainebleau and Echelon, Sahara will be in the right place at the right time to tear down and build something new.

I've been dubious about Nazarian's plans for the Sahara since he announced his plans to refurbish and renovate (maybe adding a tower and changing the name) instead of imploding and building. The renovation model hasn't been a winning template for Strip success. It is a decent location, but the footprint isn't all that big. Too much of the property is far behind Las Vegas Boulevard and some is even across Paradise. He should have bought the site MGM Mirage eventually bought across Las Vegas Blvd. that is penciled in as the Kerzner/MGM/Dubai joint venture, a site which was also controlled by the Bennett estate. What has worked for Nazarian in LA will not necessarily work in Las Vegas. There are plenty of folks in town who have proven to be very successful at anticipating what younger visitors want (George Maloof, Victor Drais and Don Marrandino among them) and I think it is presumptuous for Nazarian to believe he can get $200 per night for rooms without spending more than it can possibly be worth to renovate instead of rebuild.

Posted by Dave

Good piece, but now I can't get Phil Collins out of my head.

In Nazarian's defense, there are some older structures in LA (and elsewhere) that have been successfully rehabbed. Of course, that's a different market, with far different expectations. Las Vegas isn't a city where you'll pay $200 a night for a undersized antique room.

But again, there's been a vogue for mid-century design for quite a while now, so maybe keeping Stern's later towers and "restoring" them to their original look would work, with the really posh suites in the big new tower.

The ironic thing is that the casino itself, which was revamped in the 1990s, will probably be more dated than the retro rooms. I don't want to intimate anything about the level of service at the Sahara, but stylish and luxurious, it is not.

As a Los Angeleno who has gone to Nazarian's joints and seen them buying up and converting nearly every parcel in West Hollywood, Beverly Hills and vicinity... i'm baffled by how much money Stockbridge in investing in Nazarian's vision. You can't go a block or two without seeing a new SBE restaurant, club, hotel or construction boards announcing the spawn of more.

His belief that Sahara will "compete on price, keeping room rates about $200 a night" is sheer lunacy.

Posted by mike_ch

If you won't, Dave, then I will. Sahara is bar-none the lowest peg on the pole for service from my experience. It's possible Riviera is worse (I haven't spend much time in there) and I don't count Tropicana because it's been cut back so far that it would be cheating to include it. But for a place that DOESN'T appear to be teetering on the brink, I found it quite bad.

It's possible Nazarian improved that element already, but the prior management was so bad that it will be a long time before I consider doing anything other than running through to the monorail.

Seriously, the place could actually benefit from raising it's prices. I don't think people will trust even improved offerings unless the price tag goes up to reassure them they're not getting the same ol' same ol'.

I wonder though what the equity split between SBE and stockbridge is, who has majority control. If Stockbridge has majority control, I don't think they would have any qualms about flipping the Sahara if after the credit crunch someone comes knocking with a solid offer that would generate them a 15 or 20% IRR.

I think his plan is the best for the property (Understanding that the $200 a night figure is Trumpian fluff), because he doesn't have many other options. The credit market for a blast & build is all but dead. Even Steve Wytnn's money is less green than it was last week. This leaves either renovation or letting it devolve further into grind joint status. The hipster plans for the Gold Spike and Golden Gate are more far fetched.
I think the layout of the Sahara is basically OK, and the buildings seem better than the Riveria, or even Tropicana. The proximity to the Convention Center is a definite plus, as well.
It could be argued that the property was bought for the value of the land AFTER demolition. This may help create an attitude among the partners and lenders that renovation is a low cost gamble.

Uh, this is news? This is from The New York Times months ago:

Mr. Nazarian said that his generation�s advantage is largely in knowing what the 40-and-younger crowd wants from Las Vegas. Mr. Wynn, Mr. Adelson and Mr. Lanni are building top-end resorts for wealthy, older people like themselves.

�If you ask me what is the best toy for a 10-year-old, I cannot tell you, but if you ask a 10-year-old, he�ll tell you very well,� said Mr. Nazarian, the chief executive of the SBE Entertainment Group, which bought the Sahara, the former haunt of the Rat Pack, for a reported $400 million in March 2007. He plans to reinvigorate it by having Philippe Starck redesign it and by adding outposts of the California restaurant and nightclub brands he owns.

Lavish new projects near the Sahara will �price a lot of people out of the market by 2011 or 2012,� he said. �I want to offer an affordable hotel with rates between $150 and $250 that�s unbelievably chic and unbelievably creative.�

Yes, mostly previously announced.

Still, front page of the Weekend Journal is noteworthy and the fact that he still is targeting this plan, given economic woes and credit issues, is interesting.

I don't think anyone here stated that this was something new, though through the added exposure from this article I'm sure more people are now aware of his plans.

I totally agree with Jeff in OKC. In fact, I have more respect for them trying to pull off a renovation in this market than for, say, Elad. The Sahara may never be as hip as Palms but at least by keeping the place in operation they are generating income to pay for the renovation. Sure, I'd like to see another exciting multi-billion dollar development. But, I think it's actually refreshing to see an operator who can live within his means!