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August 17, 2017

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Reno gaming exec faces challenges with SLS on Las Vegas Strip, lobbyists say

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Erik Kabik / Retna / ErikKabik.com

The grand opening of SLS Las Vegas on Friday, Aug. 22, 2014, on the Strip.

Reno gaming executive Alex Meruelo and Meruelo Group face a difficult road in turning the SLS property, formerly the Sahara, into a profitable venture, two of Nevada’s top lobbyists said this week on “Nevada Newsmakers.”

Brothers Michael and Alfredo Alonso of Reno agreed that Meruelo, owner the Grand Sierra Resort in Reno, will face stronger competition in Las Vegas and may be at a disadvantage because of the SLS location.

Meruelo’s new property is on the northern part of the Strip that also includes two major unfinished projects — the 25-acre Fontainebleau Las Vegas and the Genting Group's Resorts World Las Vegas.

“It’s difficult because you don't have the walk-up traffic that you have farther south on the Strip,” Michael Alonso said. “You don’t have any projects that are going to happen anytime soon that are going to drive traffic down to that old Sahara property. Because of those factors, it makes it a really tough property.”

He praised Meruelo was for the job he has done with the Grand Sierra Resort.

“It looks good, and I think it is operating well,” Michael Alonso said. “But Vegas is a very different market than Reno … I wish him the best of luck, but he's got his work cut out for him. ”

The Grand Sierra Resort is away from Reno's downtown and convention-center gaming hubs, and operating on the Las Vegas Strip is a step into the big leagues, Alfredo Alonso said.

“With all due respect to our hometown, the competition in Las Vegas is significantly bigger,” Alfredo Alonso said. “He (Meruelo) is going to have to compete against the Bellagios and the MGMs of the world, and that is a difficult task because they can offer more."

Meruelo purchased the property for an undisclosed amount from Stockbridge Real Estate in May. The previous Sahara property was given a $415 million upgrade when it opened in 2014 as the SLS Las Vegas.

Meruelo’s new property must offer a reason to leave the more bustling areas of the Las Vegas Strip and head north, Alfredo Alonso said.

“There’s got to be a reason why people are going to travel to a little bit of an off-center Strip area for his property,” Alfredo Alonso said. “Now can he do that? Obviously, if he can cut costs and still find a way to entice people to come to his property. The idea was that it was going to be a boutique property that would bring people there. Can he do that? He’s done that in Reno. But the factors are much different.”

Michael Alonso, a partner in the Lewis Roca Rothgerber Christie’s Gaming Practice Group, appears regularly before the Nevada Gaming Control Board, the Nevada Gaming Commission and other state regulatory bodies. His practice includes gaming and liquor licensing, land use, legislation and lobbying and real estate transactions. Alfredo Alonso, a principal at the Reno law firm, is the chairman of its Nevada Government Relations Practice Group.

Ray Hagar is a retired political journalist from the Reno Gazette-Journal and current reporter/columnist for the Nevada Newsmakers podcast and website, nevadanewsmakers.com. Follow Ray on Twitter at @RayHagarNV.

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