- Guests say goodbye as Sahara goes dark (5-16-2011)
- Once 'jewel of the desert,' Sahara entertains last weekend guests before closing (5-14-2011)
- With demise of Sahara, what’s next for north Las Vegas Strip? (5-13-2011)
- Riviera Holdings hires executive from Sahara (4-26-2011)
- Sahara guests, workers fondly remember ‘the last of the oldies’ (3-12-2011)
- Sahara’s closure on May 16 will mark ‘the end of an era’ (3-11-2011)
- Sahara cites weak demand in closing hotel towers (12-15-2009)
- Sahara to get some L.A. glitz (4-8-2007)
- Sahara sold to Los Angeles partnership (3-9-2007)
- After 50 colorful years, resort remains a “jewel” (10-4-2002)
- Sahara goes Moroccan with $65 million renovation (10-10-1995)
- Bill Bennett buys Sahara (7-1-1995)
- Hacienda Owner Buys Sahara For $50 Million (5-5-1982)
- ‘Hottest Casino’ Open For Business on Strip (8-27-1964)
New details were made public Wednesday on hotelier Sam Nazarian’s plan to redevelop and reopen the closed Sahara hotel-casino on the lonely northern end of the Las Vegas Strip.
Debt rating agency Moody’s Investors Service in New York issued a report that confirmed the redeveloped property would be called ''SLS Las Vegas'' and that Nazarian was hoping to reopen it in the second quarter of 2014 — if he can raise $415 million from lenders and investors to help finance what’s being billed as a $744 million project.
In January, Nazarian told Sun columnist Robin Leach that SLS Las Vegas would be a luxury property tied in with his Los Angeles-based SBE Entertainment Group LLC hospitality and entertainment business, which includes restaurants, clubs and hotels in Las Vegas, Los Angeles, Miami and elsewhere.
In its report Wednesday, Moody’s said the company that owns the Sahara, Stockbridge/SBE Holdings, was planning to contribute $329 million in equity to the deal and that it was looking to raise $300 million with a first-lien term loan plus junior debt of at least $115 million.
A portion of the equity appears to have been obtained when Stockbridge/SBE Holdings purchased the old mortgage debt of the property under undisclosed terms in a deal that was announced in September.
Moody’s on Wednesday issued a speculative-grade B3 Corporate Family Rating to Stockbridge/SBE in relation to its debt-issuance plan, noting the following factors:
• The risk associated with the renovation and ramp-up of a hotel-casino.
• The company's modest scale and reliance on a single property for all of its cash flow.
• The company’s limited gaming experience.
• The need to take market share from existing ''well-established properties on the Las Vegas Strip in order to meet its business plan.''
• The fact that the project will be highly leveraged with debt.
On the plus side, Moody’s noted:
• Little new hotel supply is expected to enter the Las Vegas market.
• The project is targeted at what Moody's believes is an underserved market segment on the Las Vegas Strip — ''just below luxury.''
• SBE Entertainment has a successful track record establishing popular hotel, restaurant and nightlife venues.
• The company has existing databases of SBE Entertainment customers and patrons of the Sahara before its closure.
''The rating outlook is stable, reflecting Moody's view that the project has sufficient liquidity to reach completion and that the market can absorb the new supply,'' Moody’s said in its report.
A request for comment was placed with SBE on its plans, which in the past have called for removal of its roller coaster and 98 rooms, leaving it with 1,622 hotel rooms.
Just over a year ago, the 1,720-room Sahara announced it would close after 59 years of operations and a lack of renovations left it uncompetitive.
In an interesting twist Wednesday, it was revealed by Moody’s that the financing plan for SLS Las Vegas included ''low cost junior debt through a federal program sponsored by the U.S. Citizenship and Immigration Services under the U.S. EB-5 visa immigrant investor program.''
Nazarian’s family immigrated to the United States from Iran.
Nazarian would later gain fame as a reality TV star and a nightlife entrepreneur known for clubs like Hyde Lounge at Bellagio on the Strip.