Sahara edges step closer to new ownership

The Sahara moved a step closer toward new ownership Wednesday.

The Gaming Control Board gave tentative approval for the Navegante Group, a Las Vegas-based casino management company, to operate gaming at the Sahara.

The aging Strip property is in the process of 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 transaction is expected to close July 31, and Navegante, which is headed by longtime gaming executive Larry Woolf, would take over the casino immediately. The Nevada Gaming Commission still needs to sign off on the control board's recommendation when it meets July 26.

Control board members took all of 25 minutes to approve Navegante and Woolf, saying the arrangement with the pending Sahara ownership is similar a management agreement Navegante has with the owners of the Grand Sierra Resort in Reno.

Regulators were told Navegante will be paid a management fee but will lease the 85,000-square-foot Sahara casino back from the ownership. The new owners will loan Navegante the funds to purchase the gaming equipment. Gaming revenues would be used to pay rent, pay interest and principal on the loan, and fund and capital improvements.

Navegante now operates four downtown casinos, three casinos in Elko and the Casino Fandango in Carson City.

"We're obviously quite familiar with Mr. Woolf," Control Board Chairman Dennis Neilander said.

Attorney Scott Scherer said Navegante's management may be short-lived. SBE and Stockbridge are applying for a gaming license to operate the Sahara.

Until then, Woolf said Navegante is not planning any changes in the Sahara's current operation. All employees and casino management will be retained and Navegante will also be in charge of the property's surveillance and security staff.

The Sahara is currently operated by the family of late casino pioneer William Bennett, who bought the resort in 1995. Woolf said revenue projections he shared with the control board were in line with the current operations.

"It's doing quite well. Hopefully, we won't mess it up," Woolf said.

SBE, which is controlled by Los Angeles entrepreneur Sam Nazarian, operates 17 boutique hotels, 10 Los Angeles-area nightclubs, 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, including company president Arash Azarbarzin, watched the proceedings Wednesday, but declined comment until after the transaction closes.

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.

SBE will be the Sahara's operating partner and Nazarian, in an interview in March when the deal was reached, said he wanted to embrace the Sahara's history when the company begins to renovate the resort.

"Our company has the background in taking something that's older and giving it a new and exciting design on all levels," Nazarian said.