Bust strikes Vegas builders

David Strow

Friday, Dec. 28, 2001 | 10:44 a.m.

After years of almost frenzied building activity, the cycle of casino construction has -- for the moment -- reached a low point in Las Vegas.

The only two major casinos to open this year -- the Palms and Green Valley Ranch Station Casino -- opened in November and December. And large expansion projects were put on hold in the weeks following Sept. 11 as the Las Vegas tourism industry cooled off.

And that is resulting in some lean months ahead for construction companies and construction workers, who are among the better-paid workers in Las Vegas.

"Compared to other times, it (the Las Vegas construction market) certainly isn't as active as it has been," said Dick Rizzo, chairman of Perini Building Co.

Suspended projects include a 1,000-room tower at the Venetian, a 900-room tower at Caesars Palace, a 1.8 million-square-foot convention center at Mandalay Bay and a high-rise timeshare on the Strip's north end being built by Hilton Hotels Corp.

The only major project on the Strip to stay on course in recent months is the Colosseum, a 4,000-seat entertainment venue at Caesars Palace set to open in spring 2003.

When these Strip projects were suspended, about 200 carpenters were laid off, said Marc Furman, senior administrator in Nevada for the Southwest Regional Council of Carpenters. But by now, those projects would have been employing about 600 carpenters, Furman said.

As a result, about 1,200 of the union's 4,000 local members are on the out-of-work list now, Furman said. Usually, many would find jobs through the union's dispatch department, as contractors put out last-minute calls for workers. But in November, only about 300 carpenters found work this way, Furman said.

"This is very much the industry we live in," Furman said. "We're more in tune to the booms and busts in construction than Culinary (Union workers), who have much more permanent employment. Construction is usually the first in and last out of a recession."

The same situation holds for electrical workers. Of the 2,400 workers represented by the International Brotherhood of Electrical Workers, Local 357, more than 300 are out of work.

Fortunately for the union, many members employed at the Palms and Green Valley Ranch projects will continue working at each for the next several months, said Mickey Miles, president of IBEW Local 357. But the situation's still bad.

"It's a pretty high unemployment ratio for us, the highest it's been in eight to 10 years," Miles said. "We're a one-industry town, and as goes the casino industry, so goes everything in Las Vegas."

The last unemployment numbers released by the state of Nevada were for November, and they do not yet show much of pinch felt by the construction industry and its workers. The Nevada Department of Employment, Training and Rehabilitation (DETR) reported 71,800 construction jobs existed in the Las Vegas Valley in November. That was up by 1.3 percent over November 2000, and unchanged from October 2001.

Construction plays an unusually important role in the Las Vegas economy, said Keith Schwer, director of UNLV's Center for Business and Economic Research. It represents about 10 percent of the valley's employment base, or about 2.5 times the national average, Schwer said.

And since construction typically pays better than other sectors, "it tends to buoy economic activity," Schwer said.

The city's construction workers earned an average wage of $738 per week in the first quarter of 2001, DETR reported. That is 19 percent above the average weekly wage in Las Vegas, and 24 percent above the average weekly wage earned by service sector workers.

So getting construction workers back on the job will be critical to the valley's economic recovery, Schwer said.

"If they (the Strip's expansion projects) resume, that's going to be major," Schwer said. "If they don't, that's major."

Still, Schwer said construction executives have shown a more optimistic outlook in recent surveys by the UNLV center.

"Given all that's happened, I would say they're not nearly as pessimistic as ... the gaming people," Schwer said.

Virtually everyone in the construction industry, contractors and union officials alike, expect a comeback by next spring. Mandalay Resort Group, gunning for a January 2003 opening of its convention center, is expected to resume construction by then.

Other suspended projects may resume fairly rapidly, Rizzo said. Project pricing is now underway for the Venetian expansion and for Wynn's Le Reve, and "it looks like (the Caesars tower) may recover more quickly than expected," Rizzo said.

"There's confidence in the market," Rizzo said. "It's a little hiccup, as far as we see it."

"I think by March, a lot of these projects being deferred will get going again," Furman said. "For some of the projects, it's a good time to build them. The interest rates are low, and they will get good, competitive bids."

That's encouraging for construction workers, but leaves many with a difficult choice -- wait it out in Las Vegas, or head elsewhere for the next several months to find temporary jobs. Most current resort activity is occurring at tribal casinos in Southern California, as well as some resort expansions in Reno and Lake Tahoe, Rizzo said.

It also could mean heading to the East Coast for several months, Miles said.

"A lot of guys don't want to do that kind of traveling," Miles said. "But we're telling our members you're better off traveling and keeping food on the table. You don't want to get wrinkles in your belly waiting for a job."

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