may-2011

BUSINESS
HE H WELL-MANICURED shrub-
bbery
outside the Los Angeles
hheadquarters
of SBE Inc—the
hhotel,
restaurant and night-
cl club powerhouse founded
by
Sam Nazarian—brings to
mmind
a scaled-down version of
th the bushes that protect celeb-
ri rity homes from prying eyes in
BBeverly
Hills. Fancy greenery
mmay
seem a little posh for the
offi
ce’s more utilitarian West
HHollywood
surroundings, but
cl clearly, Nazarian is comfort-
ab able among the amenities of
th the affl uent.
He counts
LLeonardo
DiCaprio DiCapr prio among amo m ng his neighbors neigh
ghbors and hhe
sups with
the likes like kes k of David Da D vi vid Beckham Beckh Be ckh c am at SBE’s recently
opened ed Mediterranean Me
Medit diter errane anean a eatery Cleo. EEvery
bit the
Tinsel Town n prince, pri prince nce, 35-year-old 3
Nazarian Naz zips
around LA in cars ca cars rs from fro ro rom his expansive expansiv collection
that includes includes a $ $1 $1.4-million .4- 4- 4-million Bugatti aand
a Rolls
Royce Phantom m convertible. ccon
onvertible. He dates date models
and once agreed agr greed eed to tto
spend $180,000 on o a paint-
ing, but, by th tthe e next morning, forgot about the
purchase. (He made de go ggood od on his pro promise.) And
he scored headlines headl adline nes last year when he h was in
Saint-Tropez with a crowd that included inclu Paris
Hilton and a money mo money-squandering ney-squandering bil billionaire who
ran up a bar tab of f $ $2.6 2 .6 million.
Nazarian n not only
y lives the jetset jetsetter’s life,
he also profi ts from it. The son of Qualcomm’s
Qu
cofounder, Nazarian owns and/or ma manages 28
hotels, restaurants and nightclubs, mmany
of which, not surpris-
ingly, cater to th the th the eu e uultr
ultra-high-end ltr ltra-high-end market. mar The force behind LA
celebrity magnets that include SLS Hotel H at Beverly Hills, Hyde
Lounge and haute cuisine hotspot XIV XI by Michael Mina, he has
spent the last eight years cagily leveraging levera the notoriety of his vari-
ous outlets. He put them
h on the map
through publicity from TMZ
(a Google search for the gossip site and an “Hyde nightclub” yields
194,000 matches), HBO (most of the nightclub scenes on Entou-
rage were shot shott in iinn
Hyde, HHyde
yd , and his home doubled as the residence of
Vincent Chase) and MTV
(Heidi Montag of The Hills
fame worked for Nazarian,
who also made several
well-timed cameos on the
show).
“I thought it helped
the brand—that’s why I
MAY 2011 36
did it,” says Nazarian, who fi rst learned the hotel business by
investing millions of his and his family’s money in Sheratons
and Hiltons managed by outside companies. Sitting in his posh,
800-square-foot offi ce, looking the part of both businessman and
Hollywood A-lister in a black Hugo Boss suit, he continues, “Who
knew that The Hills would have 6 million followers? But now there
are people in Kansas who want to go to our nightclub Industry,
our restaurant Katsuya and our SLS Hotel at Beverly Hills.”
WHAT THE HILLS viewers are unlikely to know are the diffi culties
that Nazarian faced during the recent economic crisis. SLS
opened in October of 2008, right when Wall Street imploded,
and he was forced to put his next two hotel projects, in Miami
and Las Vegas, on hold. Over the coming year, he cut back on
development plans and focused more on joint ventures and
THE SUITE LIFE Sam management deals (one of which now
Nazarian at his SLS Hotel
at Beverly Hills
has him running Gladstones, a venerable
seafood restaurant in Pacifi c Palisades,
which nets $14 million per year) and he weathered room-rates that
averaged 20% less than he had initially anticipated. According to
The Wall Street Journal, in 2010, Nazarian Enterprises (his family’s
business) kicked in a total of $18.5 million in order for Nazarian to
get an extension on the due date for the SLS’s debt of $139 million.
Nazarian insists that he was nowhere close to bankruptcy, but,
clearly, he learned from the experience. “I got into every
business line, every P&L; I made sure that every division was
speaking to the others and maximizing revenues,” he says. “I
learned about how quickly your banking relationships go to a
special server in Dallas when the bank shuts down. But I also
showed my loan partners, the biggest investment funds in the
country, that I will not... walk away from properties. I fought tooth
and nail.” He smiles ruefully and adds, “It was a disastrous time.”
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