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September 30, 2014

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Sahara to get some L.A. glitz

Independent casino operators are a dying breed on the Strip, a playing field controlled by growing chains with billions of dollars at their disposal.

So when Sam Nazarian, a well-dressed Beverly Hills bachelor with the unflappable demeanor of George Clooney and a Rolodex of A-list celebrity friends, announced a deal last month to buy and revamp the well-worn Sahara, some saw yet another overconfident, smooth-talking speculator looking to get rich and burnish his reputation.

Next to buying a sports team, owning a casino - in many ways a more difficult and expensive process - is the ultimate boost for the male ego. But stiff competition, rising land prices and sky-high construction costs have weeded out speculative vanity projects, leaving behind only the most wealthy and experienced.

Nazarian needs neither fame nor fortune. In fact, that's what he brings to the table.

His entrepreneurial track record bears more resemblance to that of Palms resort owner George Maloof - a man who also capitalized on celebrity culture to create an entertainment brand from scratch - than to that of the many outsiders with little experience or cash who have failed to make their mark in Las Vegas.

At the age of 31, Nazarian has even bigger plans. His goal is nothing less than "revolutionizing nightlife" with an entertainment empire of dozens of hotels, restaurants and other venues that, clustered in the nation's hot spots, build on one another's buzz.

His father, Younes, an Iranian construction tycoon and an early investor in telecommunications giant Qualcomm, created the kind of family fortune that leads some men to become professional playboys. Instead, Nazarian parlayed Steve Wynn-like ambition, a keen social life and an eye for design into the 2002 creation of SBE Entertainment Group, which boasts posh hotels, nightclubs and restaurants.

Nazarian began selling cell phone equipment in his 20s and then jumped into real estate, taking on such risks as redeveloping a downtown Los Angeles office building into desirable loft space. His real estate division now develops luxury homes and owns and manages apartment buildings, office parks and condos.

SBE made its biggest splash on the nightclub scene, launching four of Los Angeles' most exclusive clubs. Of those, Area and Hyde Lounge - described as works of art - are most revered among the Paris Hilton-Lindsay Lohan crowd and their hangers-on. Area is like a mod-inspired living room, with white banquettes and low couches offering a wide-open view of the beautiful, well-dressed crowd. Hyde Lounge, which seats only 100, has a stricter velvet rope and is known for gourmet drinks with ingredients like cracked pepper and pressed watermelon. It sports a masculine look set off by crocodile-embossed leather and candles that flicker against smoked mirrors.

SBE's eateries, Abbey and Katsuya, are see and be seen destinations for Los Angeles' elite. Nazarian wants to expand Abbey's patio bar and curtained cabana concept in West Hollywood to warm-weather locations nationwide. Katsuya, more modern art museum than restaurant, is the first of several planned restaurant collaborations with Paris-born designer Philippe Starck.

An independent film division, Element Films, develops, finances and distributes its own films with partners. Element has completed eight films, attracting stars such as William Hurt and Michael Keaton and earning awards at festivals.

Nazarian's latest venture is a luxury hotel chain under the newly minted SLS brand, which he envisions as the "Four Seasons of our generation." The first SLS hotel will launch next year at Le Meridien, the Beverly Hills hotel SBE acquired in 2005. Nazarian also is redesigning the recently purchased Ritz Plaza hotel in Miami's South Beach.

The Sahara may be his biggest gamble yet.

Even if the property is gutted and outfitted in designer glamour, the Sahara is a relatively small building in a poor location bordering a low-rent neighborhood at the north end of the Strip.

Nazarian will need to work magic to compete with the deluge of new venues and expensive face-lifts closer to the Strip's core and aimed at attracting the young, rich and beautiful.

The Bennett family spent millions making the Sahara the most well-preserved of the Strip landmarks yet to succumb to the wrecking ball. At 54, the Sahara looks good for its age but makes a small fraction of the hundreds of millions in profit generated by its newer neighbors. But where other developers see a fading casino too close to sorry-looking pawn shops and wedding chapels, Nazarian - whose Privilege nightclub on the seedy east end of Los Angeles' Sunset Strip helped reenergize that area - sees one of the last remaining "Rat Pack" hotels.

"The Sahara is a legendary asset with tremendous history, and its location and sheer potential fit perfectly into the SBE model," Nazarian said.

All of Las Vegas seems to fit the SBE model, given the explosion of nightclubs as casinos' premier draws. Nazarian not only has identified the town's new demographic, he fits it .

He is already thinking like a casino boss. Nazarian has locked up talent by poaching from competitors and is cultivating partners across industries to pool ideas.

Among Nazarian's catches: Starck, event producer Brent Bolthouse (a veteran of the Los Angeles club scene and co-founder of the Body English nightclub in Las Vegas), master sushi chef Katsuya Uechi, "avant-garde" chef Jose Andres and hotel executives involved in the launch of the chic W hotel chain.

Of that crowd, Starck, who created "surreal chic" and "daredevil design" for the iconic Mondrian, Clift and Delano hotels under the direction of boutique hotelier Ian Schrager, has earned the most devoted worldwide following.

He's under a 15-year agreement to design luxury hotels and is locked into designing future restaurants, lounges and clubs for Nazarian.

Beyond creating a database of customers and their tastes, Nazarian is establishing a player club of sorts, whereby a hotel customer's room key would become a VIP pass to SBE-owned restaurants and clubs nearby.

Revamping the Sahara is a job too daunting to contemplate for locals accustomed to tearing down the old and starting afresh. That's why Strip operators are interested in Nazarian, who has an outsider's perspective and the cash to think big. Nazarian will make the rounds in coming weeks, introducing himself to casino bosses.

Coming from Los Angeles, where the competition is more combative and scattered, Nazarian can expect a warm welcome from a tightly knit group of casino executives who ultimately benefit from their neighbors' successes.

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