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 LA, 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 Fountainebleau 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.”