Hotel near Las Vegas Strip faces pile of unpaid bills

Phoenix hotelier Alex Rizk had big plans when he bought a small property near the Las Vegas Strip.

He wanted to turn the 64-room hotel on Sahara Avenue into a cannabis-friendly destination and spent millions overhauling the place. His hotel, the Lexi, is an adults-only outpost that offers a topless pool, a “slightly naughty” aphrodisiac tasting menu and plenty of parties.

But occupancy has been “spotty,” Rizk recently said, and he now faces a pile of unpaid bills and wants to sell the hotel.

As he described it, construction took longer than expected, borrowing costs shot higher, and running a small, boutique hotel in a market dominated by massive casino-resorts is an “uphill battle.”

He said Wednesday that he is under contract to sell the Lexi and that all of the liens on the property would be cleared.

But, he previously indicated, he spent $5 million on renovations and other costs that he doesn’t expect to recoup.

“I’m taking a bath on this,” Rizk said.

‘Bit of cheekiness’

Rizk, CEO of Pro Hospitality Group, acquired the five-story former Artisan hotel for $11.9 million in March 2022. His group unveiled the hotel’s new name in January 2023, saying the property would remain open during a multimillion-dollar renovation and be the first “cannabis-friendly” hotel in Las Vegas.

Its news release indicated that guests would be able to consume marijuana on the fourth floor, where each room would have a state-of-the-art air filtration system.

Rizk held a grand-opening celebration for the hotel in spring 2023. At the time, he said his team had “blended playfulness, a bit of cheekiness, and pure Vegas spirit to create a new type of destination.”

The hotel boasted redesigned rooms, a grand lobby, new luxury cabanas by the pool, dining options, DJs and a members-only lounge.

The Lexi, a news release declared, “is where boutique meets whimsy.”

Mounting claims

Since 2024, however, several liens have been filed against the property alleging unpaid water bills, garbage bills, contractor invoices and room taxes, Clark County records show.

The biggest claim by far was a notice of default filed in April. It alleged $11.6 million was owed in connection with a loan on the property, county records show.

In general, a default notice starts the foreclosure process, though a borrower can still avoid losing their property, including by working out a deal with their lender or paying their debt.

The Clark County treasurer’s office, which collects property taxes, also recorded tax trustee deeds against the hotel property last month. Collectively, the filings showed roughly $114,200 in past-due taxes and around $36,230 in penalties and interest.

The property taxes were three years delinquent, and the deeds do not affect daily operations at the site, said Nancy Bach, senior records technician with the treasurer’s office.

The city of Las Vegas also filed a lien for around $29,840 in April over room taxes that support the Las Vegas Convention and Visitors Authority. According to the filing, the taxes were delinquent as of the prior two-month audit period.

Meanwhile, a heating and air-conditioning company filed a $70,635 lien against the hotel property last year, and a plumbing company filed a lien for about $19,700 last year as well, county records show.

‘An uphill battle’

Rizk said recently that the cannabis concept didn’t work out. He also said that when he bought the hotel, he had a 24-month “bridge” loan, or short-term financing. He planned to renovate the property in 12 months, operate it for 12 months, and then refinance, he said.

But construction lasted almost 20 months, he said, adding he wasn’t able to refinance because of the delays and rising interest rates.

The Lexi, 1501 W. Sahara Ave., at Interstate 15, is only about a mile west of the Strip. But compared to other Las Vegas hotels, it’s not the most visible property.

It’s tucked behind a flyover ramp — one of a cluster of overpasses at or near the Sahara-I-15 interchange — and is not accessible directly from Sahara.

Rizk said that he has asked himself if the location was an issue. But he noted the Lexi is near popular eateries, and he questioned who comes to Las Vegas and doesn’t look online where they’re staying.

Still, he said the hotel needs a national brand to compete with resorts on the Strip.

He pointed to The English Hotel, a boutique, 74-room property in the Arts District that is independently owned but part of hotel giant Marriott’s network.

Rizk said that small hotels compete with megaresorts not only for guests, but also for staff and suppliers. He indicated that big properties — whose order volumes for food, linens and the like far exceed those of a boutique hotel — land discounts and other advantages.

“It’s an uphill battle,” he said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.