Friday, March 11, 2011

A 7-Point Analysis Of Sahara's Closure

[UPDATE: Find other excellent analysis from David McKee at Stiffs & Georges. Point me the way if there's more elsewhere worth noting.]

OK. I raced to get my own version of the Sahara closure story up, and it was interesting because it seemed I was the one telling pretty much everyone I interviewed that it was happening. That included economist Stephen Brown from UNLV, Sandy Hackett whose dad's management of the show room drew in so many bold-faced names and Stacey Loizeaux, owner of the demolition company that gets the call whenever there's a piece of Vegas history to destroy.

You can read my account -- and their thoughts -- at AOL News. [Aside: I just received an email from my editor saying that despite the massive layoffs this week as a result of the AOL merger with Huffington Post, my gig is the same as always for at least a while. Whew and yay, because the new HuffPo traffic will make AOL News stories easily among the Web's most-viewed reporting.]

Anyhow, some little ideas and thoughts that have occurred to me, some of which I have Tweeted:

* Was Sharron Angle right? Remember when Sen. Harry Reid's GOP opponent suggested Reid's saving CityCenter and not, say, the Fontainebleau, was a case of government picking economic winners and losers? And when she said that the 12,000 jobs "saved" at CityCenter would end up coming from elsewhere? Is this the proof of that? If Reid had shaken down the Lending Tree and Fontainebleau had opened, would Nazarian have chosen to double down on Sahara rather than fold? Instead, a part of the Strip that looked just a couple years ago to be the Next Big Thing is an atrophied disaster area that some are suggesting shouldn't even be considered part of the Strip anymore. UNLV's Brown, in remarks I did not include in my piece, said it's not so simple, that CityCenter helps Vegas compete with posh international gaming destinations and distinguishes the city differently than, say, a Sahara overhaul might. Fair enough, but it's worth considering that the F'Blew effect is clearly a big factor in the Sahara's demise as well as the Riv's bankruptcy and other long-term construction paralysis in that area.

* What now, Monofail?
Seriously, what the hell happens now? Do they just shut down that stop? I've parked at the Sahara and ridden the rail to the Las Vegas Convention Center, and now I can't even park there to do that? What's the point?

* We heart Sahara. Riviera? Meh. The outpouring of emotion on Twitter today over the Sahara's fate is fascinating because it's so Stardust-esque. There's a genuine affection for the Sahara, but I suspect there won't be if/when the Riviera finally bites it. Not all Old Vegas properties are created equal, as we saw with the mourning over Stardust and the good-riddance shrugs over the Frontier.

* Woo-hoo, Interwebs! This story was broken by Chuck at VegasTripping.Com last night, a full 14 hours before the MSM picked up on it with Sam Nazarian's statement. I just love when this happens. I love it more when I'm the one who does it, but nonetheless, it warms my heart.

* Hooray For Unions. Organized labor has had a very rough year so far, and it's terrible that more than 1,000 employees will lose their jobs. But the only reason why they get to stay until May instead of being out on their asses tomorrow is that the unions got lawmakers to dictate a 60-day notice. So all you non-union folks at the parts of the Sahara that aren't union, be grateful for that, k?

* Will SLS Way disappear? Remember this bit of official branding:

So, what now? SLS stands for "Something Lovely's Starting" which is vomit-in-mouth-inducing to begin with. But will it just be wiped from the map?

* Commemorative chips anyone? I chatted with Sheldon Smith of the Casino Chip and Gaming Token Collectors Club for that AOL News piece as well, and he said that folks should expect a small bump in value of mint-condition Sahara chips after the closure. They're hoping they'll issue commemorative closing chips, too, which could be a lot of free money for the casino. I'm doubting it, though; unlike Boyd, which did it for the Stardust, Nazarian and his crew aren't really in the casino business. (The casino was managed for them.) That said, could be time to get over there and grab some keepsakes. Or maybe they'll have an auction! Yay!

That's all I got for the moment. More will come, no doubt.


Jeff_Toronto said...

I guess this answers the question:

Is Las Vegas overbuilt?


Glenn Santa said...

I feel sad. Ive only stayed there once but i always had a soft spot for that place. On my first trip ever to Vegas back in 1998 I played Blackjack for the first time at that property. Those $1 tables are great for beginners! :) Ill miss the Sahara. Another piece of Las Vegas history bits the dust. :(

Anonymous said...

Re: CityCenter vs. F'bleau, at the time the latter was tangling with the banks, the Soffers were still calling the shots, going way over budget with no end in sight and generally screwing up royally. Any Reid-style intervention would most likely have delayed the inevitable (bankruptcy), not saved F'bleau. It would have been like giving free crack to a drug addict, IMO.

Angle saying that's "picking winners and losers" presumes that F'bleau had a shot at being a winner. But it had become prohibitively expensive and was being litigated to smithereens, so I can understand why Reid gave it a wide berth. Besides, Ms. Angle also said that CC wasn't creating "real jobs," just redistributing existing ones on the Strip. So F'bleau would have been different ... how, ma'am?

David McKee

vespajet said...

I've got a soft spot in my heart for the Riv, as that's where I stayed my very first Vegas trip back in 2004. Even then, I did not find the Sahara all that great (I personally found the NASCAR Cafe and Speed The Ride to be downright offensive to be located at the Sahara, as I knew it was a Vegas icon. Putting the roller coaster and the NASCAR Cafe is like Sinatra's duet with Bono....)

The Stardust was the spot I played at the most during my first trip and it was like losing a member of the family when it closed.

For me, the Sahara closing is like losing the next door neighbor you barely talked to.

Last Friday, I was in the Riv for the first time in nearly 7 years, and I hardly recognized the place. I'm hoping the place can make a go of it and get going.

Michael (@jinxclev) said...

I like the piece Steve, nice work and perspective. I never had much of a soft spot for the Stardust or the Riviera. Sahara was my old resort of choice, my first stay was during the boom period about 6 months to a year before SBE bought, but the strip comps were tightening up for low/mid rollers and the Sahara took care of me for two trips.

Employees there on the gaming floor went out of their way to introduce themselves (a pit boss when I played craps) and crews were always very good, it was that added introduction from the pit boss that endeared the place to me a small gesture, walk up, handshake and hello my name is, but it felt like things I've read about Vegas in the past.

Anyway, after SBE took over, I was concerned on whether they even understood their market, and of course they didn't, combine that with no capital investment and we have what's there now a failure.

I like your angle with Angle too, although I'm not sure I completely agree with it, as I think Sahara was doomed when SBE ignored a potential loyal mid class range and then when CET, LVS, and MGM had to cater to that level of gambler was left with nothing to offer them (brand loyalty). Not sure anything would have helped from the government for something like that or even F'Bleau finishing.

Troy in Las Vegas said...

Is Chuck at Vegastripping also known as Vegas Baastard on Facebook? I ask because at 5:29pm Vegas Baastard announced the Sahara closing and it wasn't on Vegastripping until 6:19pm.
It seems you reporters are so concerned as to who announces things first, whether it is accurate or not, so I just want to make sure credit is actually given where it is due. said...

The employees I talked to last night* (interestingly enough) didn't have it in for Nazarian. They had truckloads of blame for the management he put into place. One said "He spends $400 million on this place, then the management he puts in (rolling eyes with displeasure)...".

* When striking up a conversation with employees, I only identified myself as an "18 year resident sad to see what is happening..." to get the conversation rolling.

Something still is JDLR about this whole thing. Let's compare: Sahara's two basic competitors were Circus and Palace Station. (If you don't believe me about Palace, just to look at all the out-of-state plates in their parking garage and note that their casino has been jammed on weekends the past few months and plenty busy on weekdays. People driving in could very easy book and go to Sahara but are choosing Circus and Palace).

Circus has not only kept everything open, but added Rock n Rita's. While Sahara was closing their buffet, Palace was lowering the price of theirs and upping the quality.

Then we have the Strat, Trop, and Plaza. Do-able projects in this economy. Nazarian could have pulled that off (which would have helped him flip the place when times got better, and upped what he could charge for upgraded rooms).

So that fact that The Sahara survives the entire recession and closes just as things are turning around and other properties are investing makes absolutely no since. Total JDLR. So much so that I was positive (and would have bet money) that the press announcement on Friday was to announce upgrades.

But let's get back to this management issue: Let's say that the management sucks, and Nazarian wants to dump them. This is a great way to clean house! Plus, he sheds all of that high-seniority ($$$) union workforce. AND... he gets to close down during the summer. A time when he'd have to offer the lowest rates and pay the highest electric bills.

I'm sticking with my original thoughts when I heard an announcement was pending: As long as the economy and visitorship continues to improve over the next few months, I wouldn't at all be surprised to see it re-open in some form. With management that can make the place make money. With management that understands gaming. With management that understands the location of the hotel currently demands that it reach out to surrounding locals.

BTW, The Sahara was busy last night. Really busy. Not with looky-loos, but with gamblers. Full main pit. Pretty full blackjack pit. Plenty of people on machines. Granted, it is March Madness and Spring break. But if Circus Circus and Palace can make money right now, only horrible management (and high-wage senior union labor) is prohibiting The Sahara from doing the same.

Regarding the argument over who broke the story: Considering that is was still a surprise to Sahara employees on Friday, one could surmise that the story never broke. Or we could argue that Steve Dacri broke it on the Vegas Video Network in December when he noted that Robin Leach had told him The Sahara is getting mothballed. Bottom Line: A story that "breaks" to a handful of Vegas media geeks like me but never reaches the people being affected by the story... One would be hard-pressed to call that "breaking a story".