Privately-held gaming company The Meruelo Group has received permission by the Nevada Gaming Commission to complete the acquisition of the struggling SLS Las Vegas Hotel & Casino.
During a Thursday hearing, Alex Meruelo, Principal of The Meruelo Group, presented gaming commissioners with his plans for the revitalization of the property and for its promotion as an enticing resort located on the northern end of the Las Vegas Strip. The gaming regulator then approved the transaction, which is expected to be completed by the end of the month. The Meruelo Group plans to invest up to $100 million over the next several years to renovate and upgrade the SLS.
Renovation work would include room enhancements, pool redesign, and the addition of new slot machines on the casino floor, among others. Mr. Meruelo told Nevada gaming commissioners Thursday that they believe they could make the property profitable by upgrading and redesigning it.
Reports have emerged that Mr. Meruelo plans to rebrand the SLS once he acquires it from current owner Stockbridge Capital Group. Company representatives said during yesterday’s hearing that they will first study how well recognized the SLS brand is before deciding on whether a name change is a necessary step. The SLS name will remain for at least a year, during which the property’s new owner will evaluate whether it should be kept.
The purchase price has remained undisclosed. However, the SLS was sued by Chinese lenders last November and court filings showed that the struggling property had debt of around $585 million. Of that sum, $400 million represented a junior debt to various Chinese investors, while the rest represented a senior debt o Mesa West.
Meruelo has agreed to cover the Mesa West debt and to pay Chinese lenders an amount representing the SLS’ equity value over a period of five years. The gaming group revealed during the Thursday hearing that the Mesa Debt currently amounts to $140 million.
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The SLS in the Past and Now
The SLS originally opened doors as Sahara Hotel and Casino back in the 1950s. It is located on the northern end of the Las Vegas Strip, not far from the Las Vegas Convention Center. Back in the days, it was a popular scene for renowned performers, including Frank Sinatra and Dean Martin.
In 2007, Sahara was bought by the Stockbridge Capital Group and businessman Sam Nazarian for nearly $400 million. The hotel and casino resort was closed for renovation in 2011. The amount of $415 million was invested by owners in a bid to turn the property into a popular hangout for the younger generation. It reopened in 2014 as the boutique SLS resort, but has been struggling ever since.
The Meruelo Group announced plans to acquire the property last May. The transaction was expected to be completed by the fall of 2017, but the Chinese investors lawsuit delayed the completion of the deal.
Mr. Meruelo, the son of Cuban immigrants, currently owns several television and radio stations across California and is planning to use these to promote his company’s new casino. Some of the stations are Spanish-speaking, which is hoped to help the SLS’ new owners to attract Spanish-speaking visitors to the resort.
The SLS currently has more than 1,600 rooms across three hotel towers, a 60,000-square-foot casino with 600 slot and video poker machines and 50 table games, multiple food and beverage facilities, and 80,000 square feet of meeting space.
Booming Activity on North Las Vegas Strip
Meruelo is closing on the SLS acquisition at a time when more and more developers are setting their sights on the underdeveloped northern end of the Las Vegas Strip. Malaysia casino giant Genting Group is currently building a multi-billion Asia-themed integrated resort in that part of the popular gambling hub, while New York real estate developer Witkoff is planning to complete and open the former Fontainebleau Resort Las Vegas by 2020 as The Drew Las Vegas.
In addition, the Las Vegas Convention and Visitors Authority broke ground earlier this year on the $1.4-billion expansion and renovation of the Las Vegas Convention Center.
Tourists seem to be flocking back to the popular casino city and developers are deploying different strategies to take advantage of the tourist flow, including developing an underdeveloped portion of Las Vegas, adding diverse non-gambling attractions to their properties, and expanding their convention space.
Robert Johnson is an experienced web author and blogger. He has over three years of experience as a freelance journalist and writer.