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Best of Howard Stutz
Howard Stutz
 

Navegante gets OK to take over Sahara

27 July 2007

LAS VEGAS, Nevada -- Nevada gaming regulators on Thursday gave the Navegante casino management group final approval to take over operations of the Sahara possibly as early as next week.

Las Vegas-based Navegante, which is headed by former MGM Grand executive Larry Woolf, was not planning any changes in the operation of the 85,000-square-foot Sahara casino, which includes retaining the properties casino employees and most of the gaming management.

The Strip property is being sold to a partnership between Los Angeles-based SBE Entertainment Group and San Francisco-based Stockbridge Real Estate Funds for between $300 million and $400 million. The deal is expected to close Tuesday.

Navegante will be paid a management fee but will lease the casino back from the ownership. Navegante will be loaned the money to buy the gaming equipment by the new owners. Gaming revenues would be used to pay rent, pay interest and principal on the loan, and fund capital improvements in the casino.

The Nevada Gaming Commission was told Navegante will have one-year lease to run the Sahara with the potential for four three-month extensions over the following year. However, executives from SBE Entertainment and Stockbridge are applying for a gaming license to run the Sahara casino.

SBE, which Los Angeles entrepreneur Sam Nazarian controls, has a hotel division, owns and manages Los Angeles-area nightclubs and restaurants and has a Hollywood film division. SBE will operate the hotel, entertainment and restaurant portions of the Sahara after the transaction closes.

SBE executives attended the Gaming Control Board's hearing on the Sahara earlier this month but were absent Thursday.

Navegante now operates four downtown casinos, three casinos in Elko and the Casino Fandango in Carson City, which drew a question of Woolf by Nevada Gaming Commission Chairman Pete Bernhard about his time management.

"I ask this same question every time you're in front of us. Are you stretching yourself too thin?" Bernhard said.

Woolf said he spends two days a week in Reno and the rest of time in Las Vegas. He receives daily, weekly and monthly reports on each of Navegante's casinos, including financial matters and regulatory issues.

"We have good people, including an operator and financial person, in all of our properties," Woolf said.

He told the gaming commission that the Sahara's casino has been meeting or exceeding its projections.

Attorney Scott Scherer, representing Navegante, said the casino's business picked up with the closing last year of the Stardust and was expected to pick up additional business with the closing this month of the New Frontier.

"The Sahara is the last property on the north end of the Strip for that market," Scherer said.

The Sahara is now operated by the family of late casino pioneer William Bennett, who bought the resort in 1995. The 55-year-old, Moroccan-themed Sahara had been for sale since for four years after Bennett died in 2003. The 1,720-room hotel-casino sits on almost 18 Strip acres and employs 1,400 workers.