MGM Resorts International and Los Angeles-based nightclub and restaurant operator SBE Entertainment have expanded their business relationship beyond sharing customer loyalty programs.
In a deal being announced today , SBE will bring Hyde Lounge, one of the company's best-known nightclub brands, to Bellagio, taking over a 12,000-square foot space at the center of the Strip resort now occupied by the Fontana Bar.
SBE will manage the facility for MGM Resorts, which will pay the costs to redevelop the site that overlooks the Fountains of Bellagio.
The lounge and nightclub, expected to open on New Year's Eve, will be SBE's first nightlife venture in Las Vegas.
"I've never had the pleasure of having 3,600 hotel rooms above one of our locations," SBE Chief Executive Officer Sam Nazarian said Monday. "We think Hyde Lounge Bellagio will be a game changer in Las Vegas."
SBE, which has 24 nightclubs and restaurants in the Los Angeles area, bought the Sahara in 2007 but is not licensed to run the property's casino. The company operates the hotel and nongaming portions of the Sahara while Las Vegas-based management company Navegante Group oversees the casino.
MGM Resorts and SBE agreed this year to a partnership between the companies' customer loyalty programs. Under the arrangement, members of SBE's SB Preferred program can use rewards in conjunction with MGM Resorts' M Life at the company's hotel-casinos.
Hyde Lounge opened on the Sunset Strip in Las Vegas in 2006. SBE has added Hyde Lounge locations to Los Angeles' Staples Center arena and to the Mammoth Mountain ski area. A Hyde Lounge is expected to open in Miami's South Beach area next year.
Nazarian had been exploring bringing SBE's nightclub business to the Strip since the company acquired the Sahara. SBE-owned restaurants and nightclubs were to become part of a renovation of the nearly 60-year-old Sahara until the recession shelved the property's plans.
The deal at Bellagio, which will be overseen by nightclub designer Philippe Starck, who works with SBE, gives Nazarian the location he has long sought.
"Southern California is the biggest feeder market to Las Vegas," Nazarian said. "This benefits our customers and certainly benefits MGM. It's a product not currently in Las Vegas and offers something special to the market."
SBE's Los Angeles-area nightclubs and restaurants, including Industry, MI-6, The Abbey Food & Bar, Gladstones in Malibu, Cleo and The Colony, are known to attract the Hollywood and entertainment industry crowds.
Nazarian believes the opening of the Hyde Lounge Bellagio will create a buzz for the property, which opened in 1998 and is considered the leading revenue producer of MGM Resorts' 10 Strip hotel-casinos.
Bellagio President Randy Morton said Hyde Lounge would complement the other nightclubs at the resort. The Bank and Caramel are operated by the Las Vegas-based Light Group.
Morton said Monday the Hyde Lounge would operate as a lounge until 10 p.m., when it will transform into a nightclub with a cover charge. The renovations are also expected to expand the size of the terrace overlooking the fountains.
Morton said areas of the outdoor patio would remain open to the public for free while the nightclub will institute a cover charge for entry.
"Sam looked at several spaces inside Bellagio, but obviously for us this was the best location," Morton said. "SBE is the No. 1 nightclub operator in Los Angeles and the Southern California market is a very important market for us. This is a perfect recipe for success."
Construction on the Hyde Lounge Bellagio is expected to begin in May, which coincides with a renovation to the Hyde Lounge Hollywood.
Nazarian said the night club business in Los Angeles continued to prosper despite the recession. SBE now has more than 3,600 employees.
He said SBE hopes to announce plans for the Sahara "in the near future."
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.