Sahara closing ‘shocks’ employees

Mar 15, 2011 6:07 AM

"An absolute shock. I can’t think of another way to describe it."

That was the reaction of a 20-year Sahara hotel employee to the news delivered to about a thousand Sahara employees during three meetings last Friday.

The nearly 60-year-old resort that was an early influential force in the development of the Las Vegas Strip will close May 16. It collided with the consequences of a "perfect storm" following the March 2007 agreement that saw 31-year-old LA-based entrepreneur Sam Nazarian agree to purchase the Sahara for a price put at somewhere between $300 and $400 million.

Former Sahara boss Al Hummel, who engineered the sale agreement, was enthusiastic then about the future beyond the sale. He gushed satisfaction about the "big plans" and the $800 million or so Nazarian promised to invest in what amounted to a restoration of a Strip property that was then a decade or two past its best days.

But Nazarian’s optimism was quickly drained away by the Great Recession that crippled consumer confidence and dried up the sources of necessary financing for Nazarian’s big plans. These factors combined to strangle interest in the north Strip development Nazarian saw as a key to the Sahara’s revival.

This brings us to the shock waves created by Friday’s announcement among a thousand or so of the employees who considered themselves lucky enough to have survived countless staff reductions over the last several years.

"We knew closure was a possibility," said another employee who shared thoughts only after being promised he would not be identified."

"We have been told not to speak to the media. They would like to fire everyone they can between now and the closing. You know, to save everything they can on severance. The hope of a lot of people was that SBE (Entertainment, Nazarian’s company) would find a way to go into bankruptcy and re-organize. You know, keep going forward, like Station did."

A food and beverage employee offered some thoughts after declaring, "You can’t put my name on this. They said Sahara employees would get a first shot at openings in MGM Resorts properties (Nazarian is opening a nightclub in what has been the Bellagio’s Fontana Room) but you don’t have to be a genius to know now is about the worst time in the history of Las Vegas to be looking for a job. And if they do rebuild this place, they want it to be a non-union shop."

Friday’s meetings were announced in a memo that "urged" employees to attend, presumably for some important information, but there was no hint of the surprise awaiting them.

Still, the writing was on the wall. Sahara "body parts" were being amputated one at a time over the last couple of years.

The Sahara’s buffet was closed a year or two ago. The coffee shop has been closed for months.

An employee explained, "We were told to tell anyone who asked that they were being renovated." He rolled his eyes and gave a wry chuckle. "Yeah, extensive renovations."

But there was a time when the Sahara was seen as trend setting, a center of fun and games that inspired big thinking among others.

The late Bob Stupak told of walking outside his Vegas World Casino a half-dozen blocks north of the Sahara on an afternoon in the early 1990s. Viewed from Vegas World, the Sahara’s giant then-new marquee made the Sahara look closer than it actually was.

The thinking that would lead to Stupak’s decision to build the Stratosphere Tower was born in that glance at the Sahara marquee.

Barron Hilton talked of the phone call he got from his friend, MGM owner Kirk Kerkorian, in 1970 informing him the latter’s International Hotel might be for sale. It was a deal Hilton wanted but first he had to convince a reluctant board of directors that buying a Las Vegas property would not be seen as climbing into bed with the mob.

Hilton called Sahara owner Del Webb whose construction company had built Hilton properties. "We need to talk," Hilton said.

They did and Hilton put the question to Webb: Could Hilton acquire a Las Vegas property without falling prey to illegal pressures? This was a time when Las Vegas related mob stories provided much of the understanding people had about Las Vegas.

Webb assured him that Hilton Hotels would have no problem operating free of improper pressures. Hilton took that report back to his board and the sale of the International to Hilton was approved.

But the Sahara was encountering challenges associated with difficult choices long before Nazarian got his foot in the door there. Webb executives began looking to the east, toward Atlantic City, in the late 1970s. The construction of a hotel tower and related amenities were delayed as Webb executives decided to focus on gaming’s new East Coast boom town. There was a difficult union vote among casino employees.

Webb’s fascination with the Strip and the Sahara was wearing thin.