Sam Nazarian’s SBE Entertainment Group plans to shutter the Sahara Hotel & Casino on May 16, saying it’s no longer economically viable to operate the aging Las Vegas resort.

Nazarian, who purchased the Moroccan-themed Sahara for about $350 million with San Francisco’s Stockbridge Real Estate Funds in 2007, announced the hotel’s closure Friday. The L.A. nightlife and hospitality entrepreneur had planned to renovate the 59-year-old hotel, the oldest resort on the Las Vegas Strip, before the recession hit.

Nazarian said in a statement that as Las Vegas’ economy begins to recover, he’s confident that a new solution will be found for the Sahara.

“We are working with our partners to assess a variety of options for the property,” Nazarian said in a statement, “including a complete renovation and repositioning.”

SBE said it plans to work with MGM Resorts International to find jobs for Sahara employees and to accommodate the hotel’s customers with reservations following its closure.

SBE, headquartered on Third Street near the Fairfax District, partnered with MGM earlier this month when it announced plans to open its Hyde Lounge nightclub at the Bellagio Resort & Casino.

The company’s hotel holdings include the trendy SLS Hotel at Beverly Hills and the Redbury boutique hotel in Hollywood.