Las Vegas Constuction is Still Booming
The media recently has been abuzz with the halt of construction to Boyd gaming's 4 billion dollar resort, The Echelon. The project was originally intended to open in 2010. Boyd gaming had razed the aging Stardust property in 2006 to make way for the resort. As a result of the stoppage, Boyd's stock rose after the announcement. Of course, not everyone was happy with their decision. The property is now sitting half completed on some of the most expensive real estate in the state. Echelon joins other partial completed projects like the Cosmopolitan further down the strip. However, it's not all doom and gloom for the construction industry in Las Vegas.
Las Vegas Strip Construction
Strip construction is going on up and down Las Vegas Boulevard. To the south you'll see several resorts and high rises still under construction. Construction at One Las Vegas is nearing completion for tower two and some residents have already moved in. The massive CityCenter project, aiming to be the largest LEED certified project in Las Vegas is another huge project under construction. Despite several tragedies during construction, according to CityCenter officials the project is still on schedule and should be completed by November 2008. Should CityCenter obtain its LEED certification, it will become the largest green project in the world (although the Palazzo would still retain its claim to be the largest single green building in the world). CityCenter will feature two hotel towers with condo-hotel units and two residential towers.
Just down the street from CityCenter, construction on Turnberry Associates' Fountainebleau is scheduled to be complete by fall of 2009. Upon completion, the resort will add over 3,800 rooms, condo-hotel units and penthouses to the Las Vegas strip.
Further down Las Vegas Boulevard, another massive project is underway. M Resort, a 700 million dollar project located at Las Vegas Boulevard and St Rose Parkway is going forward. One of the keys to their success while other projects stall or are even cancelled is their funding. Unlike other projects, M Resort, Spa and Casino had all necessary financing in place since the start of construction and as well fixed-price construction contracts(a practice that other builders would be wise to adopt, especially since the price of oil can be directly tied to the rise of construction costs).
Economic Impact
The economic impact the construction industry has on the Las Vegas valley is undeniable. Even without counting new construction, most strip properties are constantly being remodeled. This tax revenue has helped bolster state tax revenues as tourism has dipped over the last year. The other side effect is the creation of even more jobs once a project has been completed. In the coming year, several thousand jobs will be created by the opening of CityCenter, M Resort and Fountainebleau. Aliante Station, a local casino in the master planned community of Aliante in North Las Vegas, hired over 1,500 workers and plans on hiring more as needed in the coming months. Even without any state income tax, these new workers will impact the local economy.
The Future
While Las Vegas hasn't proved itself to be recession proof, the city has fared quite well compared to other vacation destination cities across the country. Construction is still going strong, the job market while down will be seeing a huge upswing in the coming several months and tourists are still coming. All in all, I wouldn't bet against the future of Las Vegas, the odds always favor the house.
