The ghost of the Sahara has risen up to bite yet another person who attempted to revive the property. Last week, Sam Nazarian sold his 10 percent interest in SLS Las Vegas to majority owner, Stockbridge Investments. Stockbridge had backed Nazarian’s quest to transform the former Sahara into a hip new destination attraction that would duplicate the nightclub experience he developed in Los Angeles to the Las Vegas Strip.
Stockbridge already owned 90 percent of SLS Las Vegas and now will pay Nazarian’s SBE Entertainment a franchise fee for using the SLS brand and other nightclub and restaurant brands contained inside that were owned by sbe.
But SLS Las Vegas struggled from the start. The 1,600-room property has lost more than $50 million in the first six months of 2015. Stockbridge has made over $40 million in contributions this year to keep the property afloat. No financial details of the SBE deal were disclosed. SLS Las Vegas cost more than $400 million to renovate when it opened in August 2014.
Earlier this year, Los Angeles retailer Fred Segal exited the property, taking his branded stores with him. Prior to that, the buffet was closed and other restaurants closed or rebranded.
Nazarian had licensing problems in Nevada when he admitted to struggling with drug abuse and using cocaine. The Nevada Gaming Control Board granted him a one-year limited license but prohibited him from having any day-to-day decision-making power.
Nazarian says the new deal helps both sides.
“We believe formalizing this transition is a win-win for the thousands of hotel employees and guests of SLS Las Vegas,” Nazarian said. “The resort remains a valued member of the expanding collection of SBE branded and managed luxury hotels across the country and the globe.”
Terry Fancher, the principal with Stockbridge overseeing SLS, agreed.
“It is more efficient from a cost and operational standpoint and will give the SLS Las Vegas flexibility to introduce new brands or restaurants from time-to-time to further improve guest experience and strengthen financial performance,” Fancher said.
This isn’t the first SBE Entertainment facility that Nazarian has shed. He sold SLS Beverly Hills for $195 million in May and the SLS Hotel South Beach in Miami in June for $125 million. The Wall Street Journal has reported that SBE is close to finalizing a merger with Morgans Hotel Group, giving it hotel management contracts in most major U.S. cities.
