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December 19, 2014

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J. Patrick Coolican:

Courageous first move could bring success to north portion of the Strip

Image

Christopher DeVargas

A preview of the SLS Las Vegas resort that will be replacing the iconic Sahara, Tuesday May 1, 2012.

J. Patrick Coolican

J. Patrick Coolican

Someone had to be first. Some guy in a hut had to have the courage to drink the juice of fermented grapes, and good things followed. Likewise, the north end of the Strip needed someone to have the courage to invest. Now that SBE Entertainment of Los Angeles and private equity group Stockbridge Real Estate are putting money into the shuttered Sahara, perhaps the 20-teens will eventually be known as the era when the action moved north on the Strip.

SBE, which is led by CEO Sam Nazarian, will begin the rehab construction project in September, if not sooner, and the plan sounds promising, with a 2014 opening. They’ll turn the old Sahara into a boutique hotel called SLS Las Vegas. Philippe Starck, who has a history of turning distressed properties into gems, will design it. I’ve been to the Delano in South Beach, which Starck designed, and it’s very cool and nicely integrated with the climate and architecture of Miami.

SBE has boutique properties in L.A., with New York and Miami on the way, so Vegas was a natural fit.

Rob Oseland, a Wynn veteran who was named president and chief operating officer for the new SLS, offered the usual inscrutable buzzwords — “Contemporary ... sophisticated yet casual ... approachable luxury” — and said they would appeal to all demographics and types of customers, including convention/business, wholesale and even locals. Yada yada yada. I think, given the company’s other properties and a Starck design, we can infer that this is going to be a place for the cool kids.

Forget the potential buzz, though. Oseland had a lot to say about the property’s nuts-and-bolts advantages: entrances on two sides of the building, both connected to the parking garage; a good pool location; a casino of proper size and shape; entertainment venues that will be easily converted to nightclubs; 1,600 rooms. And because they’re rehabbing instead of building a massive resort — with all the debt that usually comes with building from scratch — they can offer a competitive price.

Oseland also noted the intersection — 50,000 cars pass the Sahara every day.

About that intersection. It’s one of the most troubling on the Strip, with two empty lots and the World’s Largest Gift Shop anchoring the northwest corner. The intersection marks the end of the Strip proper, draws its share of unsavory types and tends to cut off the Stratosphere from its southern sister resorts. It’s such a distressed intersection that I half-jokingly suggested in a column last year that the county should rent the empty lot on the southwest corner and turn it into an open-air market. (I also suggested turning the Sahara into the state capitol. No one listens to my advice.)

But with SLS Las Vegas, hope is on the way. (And if you haven’t noticed, the blackened eyesore on the northeast corner has finally been demolished.)

If the new property attracts the buzz and the crowds of, say, the Cosmopolitan, we might see Carl Icahn do something with the Fontainebleau site. And maybe MGM Resorts will do something with the land it owns. Or sell it to someone who will.

“Someone is going to need to be the leader in the development of the north end of the Strip,” Oseland said.

I asked Oseland about occupancy and room rates given the glut of rooms that came online during the past five years. He pointed to positive data for six consecutive quarters. Other things being equal, he’s right that by 2014, Vegas will finally be in the middle of a robust recovery. But that’s not to say we’re headed back to 2005, when everyone was building megaresorts. As I wrote earlier this year — though I’m by no means the only one to note this — we’ve entered an era of renovations and of small, nimble players finding an entrepreneurial niche.

Oseland said he approves of the trend: “We lost our way, and we will benefit from bringing more entrepreneurs and healthy competition.”

He said he learned from Wynn that “bigger and more expensive doesn’t necessarily mean better. If you have all the right elements, from layout to design, product, service and employee espirit de corps, if you have a building that’s highly energized and affordable, you’ll create more interest and a better return than the biggest and most expensive places.”

Here, here.

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  1. Enjoyed the article.

    I just wanted to point out that, upon a cursory check of the plans for this new mega-casino, it looks like its shaping up to be the same exact thing that happened to another casino.

    Way back when, the San Remo on East Tropicana was bought and refurbished into Hooters. And it was readily apparent the only thing that happened was they changed the signs and did a facelift to the outside of it.

    The inside was still the old San Remo. The only difference was they added waitresses with..um...assets and jerked up the prices on pretty much everything. But, like I say, it was still the San Remo. Nothing was done inside the joint.

    And Hooters, who in my estimation, had no business getting involved in casino gambling in Las Vegas, is in dire straits, not doing too well with popularity nor finances.

    This new SLS Sahara looks like the same shell game. Trying to tell people it's the new hot thing in casinos, but it's just the old Sahara with a makeover.

    We'll see, I guess....

  2. "Someone had to be first. Some guy in a hut had to have the courage to drink the juice of fermented grapes, and good things followed."

    Coolican -- more like that guy had the courage to ferment some grain and gave us beer, which Ben Franklin quipped is proof god loves us and wants us to be happy.

    "All men are by Nature free and equal and have certain inalienable rights among which are ... pursuing and obtaining ... happiness[.]" -- from Nevada's Constitution

  3. Something needed to be done to bring the north part of the strip back to life. Now, PUT A DAMN WATER PARK THERE !!!!!! You have the Strat, the new SLS, Circus Circus, and several other strip properties that are more regular working class oriented (who would bring a family on vacation to Vegas), but would soon be disappointed to find out there are limited resources to keep the children occupied. Not to mention the tens of thousands of local kids who need a water park, to keep them occupied during the summer. They cannot be that hard to run or be a big liability issue, as they are located all over the country (even little Lake Havasu City Arizona has a huge water park)....if you are going begin to revitalize this area....include a water park.......but that is just one local's opinion........... :)

  4. I did like your idea of it being the State Capital but since that is not going to happen, this will be a good addition to the north end. Until someone starts improving the area no one will.

    Until they are done we have no idea what they do. He has great properties in other places and I don't see him just painting and carpeting the inside and calling it new. Betting we see a whole new property within old walls.

    Water Park? We have two of them under construction without drawing the kids to the strip, why would we need a third?

    Maybe the Fountain Blue would be the new capital? The government would not mind letting Mr. Icahn make a healthy profit on that deal. ;-)

  5. @Lee....

    I am fairly sure that the last one that was one the board for review (for the south end of the strip) was withdrawn like 8 months ago....there has never been a plan to replace the one that was removed..is certainly not one going in where they just dropped O'Sheas(upscale shops and an observation wheel), so where are they supposed to be sited at??

  6. At this time I believe opening up the SLS in that location will be tantamount to putting Christian Louboutin shoes on a burrow. Only someone unfamiliar with Las Vegas and the current world economy could possibly be involved. I hope I am wrong.