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In Nazarian's empire, the clubs are gateways, bringing in young and well-heeled customers who spend liberally Chris McPherson
Sam Nazarian, 36, wearing a yellow hard hat that makes him seem taller than his 6 feet 4 inches, chooses his words carefully as he paces off the square footage of the Hyde Lounge at Bellagio, the nightclub he plans to open on what is perhaps the best piece of real estate in Las Vegas. Nazarian has worked hard to shed his reputation as a dilettante, the party-boy son of a billionaire who in a 2005 New Yorker profile came across as a combination of Mark Cuban and the movie character Arthur. The image Nazarian now projects is one of unflagging seriousness. The hard hat: serious. The construction site location: serious. The deals he is making: very serious. It still irks him that he was once dismissed as a lightweight. “I didn’t look serious,” he laments. “I’m not making that mistake again.”
Nazarian no longer invites reporters to drive around Beverly Hills in his million-dollar Bugatti. He has stopped dating starlets and appearing on MTV reality shows. He is busy trying to transform SBE Entertainment (SB is short for Sammy Boy), his $300 million nightclub-driven company, into a hospitality empire that he hopes will one day rival those of the great hoteliers of the past and present. He is already movie-star famous in Southern California, where his business deals are front-page news, but now Nazarian is going national, making bets in a half-dozen cities—most conspicuously in recession-ravaged Las Vegas, where he is developing a 1,622-room hotel as well as the club at the Bellagio. “This is going to be the most interesting 24 months of my life,” he says. When asked whether this will make or break his business, Nazarian smiles and says, “Ask me in two years. But everything I’ve done, everything I’ve learned, some of it the hard way, it was to get here and do this.”
SBE has gone from owning and operating 17 properties in 2010 to 32 today, with an additional 25 in development. The majority of these new ventures are hotels and restaurants, an indication, Nazarian will tell you, of how he and his brand have matured. In March 2012, Nazarian plans to open a luxury hotel in Miami, the SLS South Beach. Various other SBE-owned businesses, including Katsuya Restaurant, Umami Burger, and Hyde Lounge, will also inaugurate franchises across the U.S., leading up to the planned opening of SLS Las Vegas and SLS New York in 2014. (He won’t say where in New York he plans to open but has signed a letter of intent on a Midtown property.)
Expanding simultaneously in Miami, Las Vegas, and New York during a down economy could be a disastrous miscalculation. MGM Resorts International Chief Executive Officer Jim Murren, Nazarian’s partner on the Hyde Lounge at Bellagio, calls Nazarian’s expansion plans “an uphill battle, there’s no doubt about that. Las Vegas right now is not for the faint of heart.” Nazarian says that appeals to him. “I’m the underdog here. Forget it when people say it’s not going to happen. That’s what keeps you going every day.” What’s at stake goes far beyond profits. If he gets this right, then Sammy Boy, the immigrant rich kid who rivals said had only gotten as far as he had because of his daddy’s money, will complete the transition to Sam Nazarian, American mogul.
Nazarian was once a poster boy for the reality-TV era. He gained a measure of gossip-magazine fame for playing himself on Entourage and The Hills and dating one of the latter’s stars, Kristin Cavallari. “His reputation back then was this club owner who hangs out with celebrities and dates lots of girls,” says Tim Leiweke, CEO of Anshutz Entertainment Group, who has been friends with Nazarian for 10 years and has been his partner in several businesses. Nazarian may now be trying to outrun his past, but he insists he doesn’t regret it. “I was a young, single guy who owned nightclubs. What was I going to do?”
