What was once supposed to be the future of Las Vegas has become a dumping ground. The north end of the Las Vegas Strip last month was in the news, but not for good reasons.
The first victim of the recession and expanded hotel and gaming space in Las Vegas was claimed when the owners of the Sahara Hotel Casino announced that the property will close down on May 16. And a changing of the guard at the Riviera Hotel Casino gave little hope for the future of that hotel.
At the Sahara, the owner, Sam Nazarian, CEO of SBE Entertainment Group, said it is “no longer economically viable” to continue to operate the property.
“We are working with our partners to assess a variety of options for the property, including a complete renovation and repositioning,” Nazarian said in a statement. “While no final decisions have been made at this point, the continued operation of the aging Sahara was no longer economically viable.”
SBE bought the property in 2007 for between $300 million and $400 million, but failed to reinvest much capital to keep it current. Last year, the company closed one tower because occupancy and room rates couldn’t sustain the total of 1,720 rooms. The gaming operations have been managed by the Navegante Group.
Emerging from bankruptcy, the Riviera has a new owner. Barry Sternlicht, the CEO of hospitality giant Starwood, received tentative approval from the Nevada Gaming Control Board to take over one of Las Vegas’ legendary hotels.
At the time Sternlicht began pursuing the Riviera and Nazarian bought the Sahara, the future looked very bright for the shabby North Strip properties. Boyd Gaming had begun construction of its glittering billion-dollar-plus Echelon development, the Fontainebleau was rising just south of the property, Australia’s Crown Casinos was planning a huge casino resort on the site of former Wet ‘n Wild water park, and MGM Resorts had announced that its next project after CityCenter would be on the western side of the Strip, across from the Sahara. Since that time, all properties have halted construction—the Echelon a collection of steel girders, the Fontainebleau a half-completed glass tower, Crown walking away without turning a shovel of dirt, and MGM shelving its development plans indefinitely.
