The sale of the SLS Las Vegas to Reno casino owner Alex Meruelo may not be completed until early 2018 as price negotiations continued long after the deal was announced in the spring.
Meruelo agreed to buy the struggling SLS from San Francisco-based real estate firm Stockbridge Capital Partners at the end of May for an undisclosed sum. The deal was expected to be completed in September following a review by the Gaming Control Board that can take from 90 to 120 days.
Meruelo and Stockbridge still had some “back and forth” negotiations after announcing the deal and thus only recently submitted documents to regulators, said Andrew Diss, director of government affairs for Meruelo’s Grand Sierra Resort.
“The financing is all worked out at this point. We are just waiting for the Gaming Control Board approval,” said Diss. He hoped the deal would be approved sometime in the first quarter.
Stockbridge declined to comment.
Talks may have revolved around how many cents to the dollar SLS Las Vegas debtholders are going to receive.
The SLS Las Vegas, which replaced the Sahara on the north end of the Strip, has floundered financially since it was opened in 2014, making it difficult for the resort to pay down its large debt.
SLS Las Vegas had $584 million of long-term debt outstanding as of Sept. 30, 2015, the last time it publicly announced results. Interest payments alone for the first nine months of that year totaled $35 million, equivalent to one-third of the resort’s net revenue. The resort burned through $73 million in cash over that period.
Stockbridge and Sam Nazarian, owner of SBE Entertainment, bought the Sahara for $400 million in 2007 with debt and then spent $415 million to transform the 1,600-room resort into a chic hangout targeted toward a Los Angeles crowd.
However, the north Strip has struggled with new projects such as the Alon stalled and Resorts World Las Vegas just getting underway.