In Green Felt Journal on May 10, I shared some insights from Rob Oseland, president and chief operating officer of the not-yet-under construction SLS Las Vegas, about the former Sahara hotel-casino’s prospects. Here is some additional material from our interview to shed more light on the plan for SLS.
Why can this project work in a neighborhood that’s characterized by properties that
are distinctly low rent?
It’s not a fair comparison to the Riviera or Circus Circus. Those properties have had owners who were not reinvesting in them and quit on them. It’s different today. Unless you acquire existing assets on the south or central Strip, there’s no room for new green- or even brownfield development on the Strip. This is where growth will happen.
From a real estate perspective, it’s better to be on a corner than on the middle of a block, and you want to be on busiest corner available. This city built a lot of its infrastructure around Sahara Avenue in the 1950s and 1960s. Then the market pushed south, where there was more room for development. Now that all that land’s been absorbed, it’s come back home.
I feel the Sahara intersection will be a critical piece of the SLS’s success due to its availability to locals and tourists. It’s the fourth-busiest intersection in state. More than 50,000 locals drive past it every day.
Speaking of locals, how are you going to compete in a locals market that is very
We’ll have a new brand that’s centrally located within the local community. It’ll be accessible, which is a huge advantage, to both the west and east side.
The product offering is going to be approachable, high quality, and priced to attract locals and in-house customers staying at the hotel. Everything circulates around the investment
thesis. Because we’re not spending a billion, we don’t need to charge as much for products. We don’t need a $200 room rate; all of our restaurants are going to have $80 average checks—those are things that are repellent to local marketing.
We’ll have the right product, the right level of approachability. I think this is going to be the nicest living room in town—it’ll be the one place that people will want to go to.
From the renderings I’ve seen, this project looks like it will have a bit in common design-wise with the Cosmopolitan. In fact, José Andrés, touted as the culinary linchpin of SLS Las Vegas, already has two restaurants at the Cosmo. That resort’s been hobbled by its lack of a legacy database. How will SLS succeed?
That’s an unfortunate comparison. There have been so many great things going on there: the nightlife, the food and beverage, and the quality of design, but the overall cost is what’s complicated it. They’ve had some trouble getting their arms around their gaming solution, but I think they’re making the right moves today.
Because of our investment thesis, we’re spending 10 percent of what they spent, so the expectations for our success are significantly lower than theirs.