Astumbling economy has claimed another victim on the Las Vegas Strip. The two-tower, 1,720-room Sahara Hotel & Casino will close on May 16 amid funding woes that have temporarily stalled redevelopment plans.
Los Angeles-based owner SBE Entertainment Group will shutter the 59-year-old resort on 17.5 acres because continued operation is “no longer economically viable,” a company statement said. The closure will likely affect the bankrupt 3.9-mile Las Vegas Monorail, which has a passenger station at the Sahara. SBE and San Francisco-based private equity firm Stockbridge Real Estate Group bought the 27-story hotel-casino for $331.8 million in March 2007, as the real estate boom concluded.
High unemployment, rising inflation and reduced discretionary spending have delayed plans to “reinvigorate” the rundown Moroccan-themed hotel-casino. During its heyday, the Sahara hosted the Beatles and provided the location for the 1960 movie “Ocean’s Eleven.” Built by Del Webb, the hotel was last renovated in 2003. Room additions in Las Vegas have pushed occupancy down to 79% in January, or 15% less than three years ago, says the city.
However, a “complete renovation and repositioning” could still be in cards for the “historic property,” said the company. SBE last summer reached a forbearance agreement with its primary lender, Royal Bank of Scotland Group. In January, Los Angeles-based Colony Capital LLC made a $35-million investment in the project. The Sahara joins six other halted casino-resort projects along the Strip.