So Long Sahara? SLS Hotels Encounter Some Turbulence
It seems like only yesterday that a nightclub operator and hotelier practically meant the same thing but thanks to the rough economy, it's become very clear to Sam Nazarian that a hotelier has far bigger troubles than a nightclub owner.
The Wall Street Journal took a look behind the scenes at Nazarian's SBE Entertainment company which counts several nightclubs frequented by the brainless cast members of "The Hills," restaurants prominently featured in the background of paparazzi shots, and of course, the SLS Hotels which include The SLS Los Angeles, The Sahara in Las Vegas and the old Ritz Plaza in Miami Beach.
While the SLS Hotel in LA has been generally well-received, especially thanks to its Bazaar restaurant manned by superstar chef Jose Andres, the other two properties are languishing in debt and construction nightmare. And SBE is suffering for it:
In the past 18 months, Mr. Nazarian has cut much of his development team, including architects and designers, and outsourced legal counsel and other services—downsizing his corporate staff nearly in half to around 55 people.
This article has so many complex mortgage terms and financial legalese that we're really not interested in because let's face it, all we care about is whether the hotel is going to be open so we can lay our head down on the pillow at night. That is, after consuming far too many drinks at the Bazaar.
But we do worry about the Sahara which so desperately needs a makeover. Nazarian scrapped a plan to build another tower on the site and is still working on getting a new loan to develop the hotel. Currently, room rates are in the low $20s and it's home to 3-foot tall beers and gut-busting (literally) 6-pound burritos. Um yeah. The future isn't looking bright for the SLS expansion plans.
However, Nazarian does say that he will not default on his Beverly Hills Hotel. "There isn't a gun to our head." Meanwhile, rates at The SLS are resting at a comfortable $379 a night this weekend.
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