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November 24, 2014

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One year after it closed, can Sahara site become a symbol of Las Vegas’ rebound?

Image

Christopher DeVargas

A view of what the SLS Las Vegas resort will look like from Sahara and Las Vegas boulevards Tuesday, May 1, 2012.

SLS Preview

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

Sahara's Last 24 Hours

Sunday, May 15, 2011 at 8:02 p.m. - The Sahara marquee is seen as the sun sets on the last evening that the casino is open. Launch slideshow »

Sahara's Last Weekend

At the front desk of the Sahara hotel-casino in Las Vegas Thursday, May 12, 2011. Launch slideshow »

Sahara Archive Photos

Elizabeth Taylor and her son Michael Wilding at the Sahara on March 7, 1956. Launch slideshow »

Sahara Announces Closure

The Sahara hotel-casino in Las Vegas on Friday, March 11, 2011, the same day the property made the announcement it would be closing. Launch slideshow »

Rob Oseland heard plenty of skepticism about some of the projects he helped create along the Las Vegas Strip.

The Bellagio was too expensive. The Wynn and Encore were too far north, away from the heart of the Strip.

Those resorts became some of the most successful and glamorous along the Strip, but that hasn't stopped Oseland from hearing similar doubts about his latest endeavor — transforming the old Sahara into SLS Las Vegas.

"Really? The north end?" he said, repeating a question he's been hearing about the Sahara resurrection project.

Yes, the north end. It's where Oseland has returned as part of a team that announced last month it raised $300 million in financing to create the SLS Las Vegas .

Las Vegas locals may see the north end of the Strip, with its empty buildings and stalled construction projects, as a memorial to unfinished business and money that ran out too soon.

But Oseland's eyes widen and his voice gets a little more animated as he talks about the promise for revitalizing the historic Sahara under a hotel brand that has evolved into one of the most luxurious in Beverly Hills, a move that just may signal the renaissance out of the Great Recession.

"This really could be the first step in coming back," said Oseland, president and chief operating officer of SLS Las Vegas.

The millions of dollars needed to launch the new resort casino came despite the project receiving low debt ratings that led the investment to be classified as risky. The two principal developers, Los Angeles' SBE Entertainment Group and Stockbridge Capital, responded by raising most of the $415 million it will need in just a couple of weeks.

"When you're out on the street, raising investments for Las Vegas is not easy," Oseland said.

Recent struggles of Station Casinos, the Palms, the Hard Rock Cafe and others still are fresh in investors' memories. But Oseland said SLS' success in obtaining funding should send a message that people are once again willing to put money back into the Strip.

“People may look at what we did and say, ‘If they can get the money with no better debt rating, then there may be other opportunities for the right idea, the right concept, the right place with the right people,’” Oseland said.

Between SLS Las Vegas and the Linq retail and entertainment district under construction by Caesars Entertainment, the Strip now has nearly a billion dollars of projects in play.

The new investment and opportunities on the corner of Sahara Avenue and Las Vegas Boulevard had people buzzing with the possibilities of a new life for one of the city's historic focal points. The Sahara opened in 1952, joining El Rancho, New Frontier, the Flamingo and the Desert Inn as the Strip began to take shape as the center of the casino and entertainment world. The Dunes, Riviera and Tropicana would follow. The Sahara closed one year ago today.

Sahara, the avenue, is a major artery and one of the main exits off Interstate 15.

Paul Hobson, general manager of the Stratosphere, noted recent signs of activity at the former site of the Holy Cow brewery and casino and SLS as a signal that the north end of the Strip could explode in the next two years. The nearby Riviera has also announced plans for $20 million in renovations.

"It's starting to build some mass, as in critical mass," Hobson said. "If you look at some of the busier corners, they have complementary properties on each side. You look at Flamingo with Caesars and Bill's Gamblin' Hall, the Bellagio and Bally's, and that's a nice cluster of properties. Certainly, that dynamic is at play here."

The Stratosphere tower is one of the city's icons, and the Sahara site is drenched in history, giving the north end two anchors. Adding to the potential is SLS' rich brand of luxury properties in Beverly Hills, which it's expanding to Miami, New York and Chicago.

Really, Oseland pointed out, there's nowhere to develop on the Strip but north.

"You've got the airport to the south, so you can't go any farther than Mandalay Bay," Oseland said. "Any future development has to be to the north."

That's headed toward downtown, where casino resorts are spending millions in face-lifts and revitalization projects. Businesses along Fremont Street see the new SLS Las Vegas as a rich opportunity to bring the bustle of the Strip a little closer to downtown.

"Being a downtown guy, I love the fact Sahara's firing it up again," said Derek Stevens, principal owner of the D.

SLS' plans will complement the new construction, Stevens said, including his efforts to rebrand Fitzgeralds as the D, along with ongoing renovation at the Golden Gate and recent face-lift to the Plaza near Fremont Street. Add the new City Hall, Smith Center for the Performing Arts and Symphony Park, and the north end of the Strip seems like a natural progression in the transformation.

But new buildings need people willing to come and spend their money. How will SLS try to find success where the Sahara failed?

SLS Las Vegas plans to bring a Beverly Hills experience at Vegas prices, Oseland said. The Sahara’s 1,600 hotel rooms are smaller than those at megaresorts on the Strip, and using the structure of the Sahara saves money and will keep room prices between $100 and $200 a night. That's about a third of what you'd pay for the SLS in Beverly Hills.

The investment is a tenth of the $4 billion Vegas was spending on the biggest resorts in the 1990s, Oseland said — ones he helped design, open and market.

"What I've learned over the years is that bigger isn't always better in Vegas," he said.

The smaller size of the SLS will be an advantage, Oseland said.

"When you have 3,000 rooms and they aren't full, you have a tendency to shill the joint up, as we say," he said. "Unless everything is full tilt on a Friday or Saturday night, it doesn't feel so good. It feels quiet. When things aren't busy, people question the level of excitement. This is half the footprint of the size. It sets itself up to create energy in small spaces."

Sam Nazarian, founder and CEO of SBE, also exhibits traits that remind Oseland of Steve Wynn, with whom Oseland worked on Wynn Las Vegas, Encore and Bellagio.

"Steve Wynn showed that with the right combination of people, you can create destinations that are desirable and current," he said.

Nazarian is following a similar path that began by purchasing the Sahara property four years ago. That four years has been spent paying down debt and developing a meticulous plan, Oseland said.

It included SBE starting small, operating Hyde Bellagio to learn how nightclubs might work differently in Las Vegas than in Los Angeles, where the company also runs clubs. It even included hiring Oseland with 20 years of experience in running some of Vegas' most successful casino resorts. It included continuing to build the SLS brand, which will be established across the country by the time its Las Vegas resort is set to open in 2014.

"Really, Las Vegas is the epicenter of the national brands," Oseland said. "If you're really a big boy in the entertainment, in nightlife and in the luxury hotel scene, you've got to have a footprint in Las Vegas.”

Oseland cited the success of Wolfgang Puck, who brought his L.A. dining experience to Las Vegas at Caesars Palace 20 years ago, and the Cosmopolitan's partnership with Marriott as examples of how name brands can spell success on the Strip.

"Since the Cosmopolitan brought on the Marriott brand, they are pushing some of the highest room rates and occupancy in the city," he said.

While looking optimistically to the future, Oseland appears almost wistful as he contemplates the Sahara’s new name wiping the iconic resort’s memory off the Strip.

He's seen that before, too, with the Bellagio rising in the ashes of the Dunes, and the Wynn and Encore replacing the Desert Inn.

But while Vegas has a storied past, the city survives by remaining vibrant, Oseland said. When the Sahara closed, it was not what it once had been.

"The Sahara had lost its soul," Oseland said. "It needed a new one. Now, it will get it."

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  1. Something different on a smaller scale then the Mega resorts and they won't be carrying a huge debt compared to most. Sounds like they might be on to something.

    Will be nice to see one of the old places back up with new style on the North end of the strip.

    Good luck to them. More jobs, more people and they have a following from their other hotels around the country. Just might be the right combination to work.

  2. Instead of giving the owners of Sahara the funds to change it's name and look, why not only have them get the money for a Tropicana type overhaul, by sticking with the existing structure and making minor modifications. Give the majority of the funding to the now failed Fountainbleau which sits unfinished and a blight to the North End as well as Echelon? I am cautiously optimistic at The Riviera's plans to remodel but am sick of these casinos changing names or stripping the themes that originally made them famous.

  3. Assuming the rooms are in reasonable shape, the State Welfare agencies could house unemployed Americans in the Sahara rather than every rat-hole motel in the County. EBT food stamps might encourage a grocery or C-store with reasonable prices. Rebuild with a new economic reality.

  4. I really don't want to see The Riviera stay opened and remodeled. It is a dump and it would be better served if Steve Wynn would just buy that property and land, implode Riviera and build a 3rd tower. This would give Carl Icahn and Boyd Gaming a boost to restart the Fountainbleu and Echelon respectively. If anybody can revitalize the North End of the Strip its Wynn or Icahn.

  5. I can't believe some of these comments here. No one is "giving" SLS any money, believe me, they're PAYING interest to borrow it. And, "give" the funding to Fountainbleau? Well, start by collecting 3 to 4 times as much, and give it to a man that already has that kind of funding in his back pocket.

    North Africa as a theme made some sense when the Sahara opened, but times have changed and no one today looks at North Africa as a fun, happy destination. If you look at the pictures, you'll see that SLS is taking down some of the old building, stripping off the desert theming, and renovating what remains to look and feel current and cutting edge.

    It's a smart approach that makes sense on a number of level, and I wish SBE/SLS every success.

  6. Not very impressive looking. Nor inviting. Looks like a glorified Motel 6 from the outside. They need to make it look more like a tourist location rather than another strip mall.

  7. Has anyone even bothered to observe the areas adjacent to Sahara and Las Vegas Boulevard? Drug infested streets, homeless people, and worst of all, the Bonanza Gift Shop.

    The city as well as SLS might want to wait or choose a southern location. The more north you go on the strip, the worse the quality of neighborhoods and people. Putting a hotel as nice as the SLS in that location is tantamount to putting lipstick, perfume and women's lingerie on a dead pig.

  8. It looks nice, but how are they going to make it into a Destination Resort? Night now, it's too far to walk from any Casino on the Strip. They could use that Monstrosity Monorail to get people to the new SLS, just have SLS pay for the first 1,000,000 rides to the resort.

  9. Excellent stuff. The SLS Miami just opened up and is getting lots of press. Love the modern boutique style of the remake - exactly what the target demographic wants. Congrats and best wishes!

  10. " The more north you go on the strip, the worse the quality of neighborhoods and people"

    I'd offer to personally show you different and change your mind, but I have a feeling it's already made up. It suffices to say you are wrong. Wynn himself knows the future is north, as does Icahn.

  11. Dear Mr. Reza, Et al:

    I'm sorry if I offended you or anyone else in my comment about going North on the Strip. However I must point out that the comments are data driven, i.e. based on personal observation and the location where most of the new luxury casino activity has been.

  12. Call it "77 Sunset Strip", if that title could be bought. SLS sounds too much like SOS, definitely not cool.

    It would be cool if there were to be a Sahara Lounge as part of the makeover, for those fans of the way it used to be.

  13. Maybe a fun idea would be to have an inside mini-golf course where the layout was a scaled version of Old and New Vegas. The first hole is Mandalay Bay, the 18th, Binion's, etc. Look out for the water and volcano hazzard at the Mirage hole!

    Is there such a game as mini-golf gambling. Depending on your score, you win stuff?