Valley’s growth threatened

Friday, Sept. 21, 2001 | 10:51 a.m.

For decades, the Las Vegas urban area has had the fastest growing population in the nation, helping to build a home development industry that ranks second only to the resort trade.

But the Sept. 11 attacks were a blow to an already stagnant national economy -- and could threaten the growth that has helped fuel Southern Nevada's economic engine and employ more than 70,000 workers in construction alone. Analysts believe that resorts already have laid off thousands, and hotel occupancy rates were down 20 to 40 percent last weekend.

Still, home builders at a growth seminar Thursday said they remain guardedly optimistic about the future of their industry. They said it could take months before home-sales numbers reveal the full impact of the economic troubles.

"There are so many unknowns right now," said Irene Porter, executive director of the Southern Nevada Home Builders Association. "We don't know what's going to happen, when it's going to happen."

Mark Doppe, association president, noted that the industry and local governments have a special interest in the effects that the attacks will have on economic growth.

"What will that mean to the economy of Las Vegas?" he asked -- but neither Doppe nor any of the four speakers, all elected representatives from local government, could give a definite answer.

Henderson Mayor Jim Gibson noted that the region already is feeling the economic punch, perhaps sooner than other parts of the country. His city, labeled as the fastest-growing city in the nation with a population exceeding 100,000 in the 2000 census, has become a symbol of growth.

He said the region is already feeling an economic downturn, exacerbated by the attacks.

"We don't have to wait in Las Vegas for a downturn," he said. "It happens the day tragedy strikes."

But land-use and development consultant Jerry Helton, an association board member, said the impact probably won't be immediate on home construction and residential developments.

"Certainly, job loss is going to affect our industry nationally, and will affect us here," he said. But "there still seems to be pent-up demand (for new homes) for a couple of years."

While the health of the casino industry will have an impact, Helton said one of the key issues in Las Vegas will be what happens with retirees flocking to the region. Historically, the region has drawn hundreds of thousands of snowbirds looking for warm temperatures and gambling entertainment.

But to move here, many of those retirees will have to sell the homes they are living in now, he said.

"We're guarded, but we're optimistic," Helton said.

Sean Patrick, spokesman for Del Webb Corp., the home builder with the second-best number of sales for the six months of this year, also is optimistic.

"I think we're going to see a hiccup, but I think growth will continue," Patrick said.

Last week, Del Webb saw a 50 percent drop in the number of people coming into company sales centers. But the number has rebounded to about the usual this week, he said.

Porter said one reason the industry can be optimistic in the face of bad economic news is that this week interest rates have reached their lowest since February 1999 -- 6.8 percent on a 30-year fixed rate mortgage.

But the low interest rates have not been enough to fend off a 6.9 percent drop in housing construction starts nationally last month, according to data released Thursday by the U.S. Commerce Department.

Both nationally and locally, housing construction has been an economic bright spot.

According to data from Home Builders Research Inc., a company that monitors home sales, Las Vegas-area builders sold 12,606 new homes during the first seven months of 2001, an 11 percent sales' increase compared with the same period last year.

From January through June, Las Vegas builders set a record for securing permits for future residential construction in Southern Nevada, with 11,137 permits this year through June, a 6 percent gain compared with the same period last year, the research company said in material distributed at the seminar by the home builders association.

Despite that good news, government officials already were nervous about economic numbers. Phil Speight, Henderson city manager, said staffers already had lowered the growth and tax revenue estimates for this year before the attack.

Speight said projects that already have received financing will mostly go forward, but it is still too soon to tell if new projects will be delayed or iced altogether. He estimated it will take 30 to 60 days to get a handle on those numbers.

Doug Selby, Las Vegas deputy city manager, said tax revenues already are down.

"We've seen a decline in revenues. As a result of that we started taking proactive measures," Selby said. Those measures include extending a hiring freeze and "taking a close look at expenditures."

The city is hoping for the best but preparing for even worse news.

"With the tragedy in New York, we're expecting even further decline," Selby said, in part because of the drop off in convention and visitor traffic.

Porter, however, said she expects the visitor numbers to largely recover as people return to their regular routines, despite memories of the tragedies.

"I think we should be optimistic," she said. "Stay together, be together and remember what a great country we have."