Experts at Brookings event say Las Vegas will boom again

Published Tuesday, Oct. 28, 2008 | 9:28 a.m.

Updated Tuesday, Oct. 28, 2008 | 10:56 a.m.

Brookings Institution

Urban fortune tellers never predicted the huge growth that came to Las Vegas. Those holding the strings to federal purses seemed to forget that Las Vegas even existed.

To Robert E. Lang, author of “Boomburbs: The Rise of America’s Accidental Cities,” the oversight wasn’t really a slight and should not be considered an insult.

What population prognosticators and governmental grant-givers saw was simply a factor of the region’s relative smallness in the 20th Century. But at a special meeting of the Washington, D.C.-based Brookings Institution at UNLV this morning, Lang said those days of ignoring the Intermountain West are gone.

Even, Lang added, with an eye toward the present economic downturn. The current economic slump is more of a “bump in the road,” he contended.

“Growth for Las Vegas has dropped to about 1 percent a year,” Lang told about 150 government, business and academic leaders at the UNLV Foundation Building.

“(This region) will know feasts again,” Lang said. “It will come back. It’ll be bigger than it is now. It’s always difficult to see the next engine of growth.”

Going with that theme that things won’t slow down in the long-term, Pat Mulroy, Southern Nevada Water Authority general manager, said very plainly that the future water needs of the region might be met by the Midwest.

Creating reservoirs that not only control flooding in the Midwest, but then create massive water sources for the Southeast and the Southwest is an idea that will need enormous political support — but it is also a necessity, she said.

“This is going to be difficult politically to have that dialogue, but I cannot help thing there’s a possibility of a package that provides the needed flood protection and the drought protection to the far Southwest and West that is so desperately needed,” Mulroy said.

Senate Majority Leader Harry Reid showed up to hear some of the concerns outlined in the Brookings Institution report. He began speaking at 10:50 a.m. But Nevada’s other senator, John Ensign could not make it due to scheduling conflicts, organizers said.

. . .

9:28 a.m.

Think tank gathers leaders to try to improve region’s future

A diverse cast of about 150 business, political, governmental and academic leaders from throughout the state packed a room on the UNLV campus this morning not just to listen, but to impel U.S. Sens. Harry Reid and John Ensign to focus more federal attention on Nevada, Utah, New Mexico, Colorado and Arizona.

A massive report by the independent think tank Brookings Institution last summer made the case that the federal government has long overlooked this part of the country, which Brookings sees as becoming the new American heartland.

“It is incumbent upon us to impress upon our federal representatives how important this plan is, because this is going to be the next 50 years of southern Nevada,” said Brian Greenspun, a Brookings trustee and Las Vegas Sun editor.

He looked at decisions being made now about the region as similar to those made in Las Vegas in the middle of the 20th century.

“Fifty years ago, we had to decide what kind of town we wanted it to be, whether we wanted it to be a mobbed-up town that satisfied the needs of the very few or whether we wanted it to be a megapolitan area that served everyone,” Greenspun said. “We are taking our heads out of the sand and looking out five, 10, 25 years and saying: What kind of region can we help create?”

The second speaker, Clark County Chairman Rory Reid noted the importance of this meeting in relation to the upcoming election.

“A week from today, we will elect a president, a Congress and one third of the U.S. Senate, so I think it’s good we talk to our local leaders and our connection to Washington and how we can improve it,” Reid said.

Along with UNLV and Nevada higher education administrators, among those attending were: Clark County Manager Virginia Valentine; Pat Mulroy, Southern Nevada Water Authority general manager; Jacob Snow, general manager of the Regional Transportation Commission of Southern Nevada and at least a half dozen members of the media.

Reid and Ensign are scheduled to arrive around 10 a.m.

Discussion: 17 comments so far…

By KDR81

10/28/08 at 12:45 p.m.

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NPRI says Brookings Institute report full of bad ideas and silly economic thinking: http://npri.org/blog/imagine-ferocious-s...

Brookigns isn't coming up with any new solutions just old ideas. SPEND SPEND SPEND.
By MichaelGreen

10/28/08 at 1:18 p.m.

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The NPRI is a very conservative/libertarian organization. Brookings is considered moderate. It's natural that they would disagree, but if you want to prove Brookings wrong, you would be much better off finding a report that did not come from a group that would disagree with Brookings simply on ideology, but rather on the facts.
By stevem

10/28/08 at 1:23 p.m.

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We're just not learning our lesson. Vegas lives off TOURISM and gambling. Vegas boomed because times were good and people HAD money and felt rich when they got that 401(k) statement.

It will be years before people feel that good again to come here 2 or 3 times a year and drop $500 - $600 that goes to the tips the cocktail waitress uses to pay her rent, buy her car, and get her nails done.

Until visitor volume heads up, all of this is just blowhards yapping away.
By yetis

10/28/08 at 1:47 p.m.

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Yeah, and adding a 3-16% tax on room rates IS NOT a good way to Drive tourists into the market!
By KDR81

10/28/08 at 2:10 p.m.

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Mike...that whole article had facts, basic facts, but facts none the less.

Brookings is considered center-left...some people call that moderate but then again, some people think libertarians are moderate since they are like half democrat and half republican.

That point is meaningless, just look at the argument given.
By KDR81

10/28/08 at 2:13 p.m.

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Btw, I looked at the Brookings report, their recommendations are based on an ideology that believes government spending can fix the problems, not any facts that show it has. (If that is the line of reasoning you wish to take).

The only facts they actually give are 1) Nevada is growing fast.

You can derive a thousand different policy conclusions from that, doesn't mean all are right.

At that point, the only thing to debate on it's the underpinning of reasoning, ie the logic used to create the policy recommendations.
By asylum1

10/28/08 at 2:37 p.m.

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To add to stevem's comment, not only are people's 401(k)s worth 10-25 percent less today than yesterday, but casinos are only building luxury properties. Tourists are being priced out and aren't coming to Las Vegas because they all don't roll in Jay-Z money. This high-roller, my-luxury-penthouse-is-bigger-than-the-other-guy's business model is not sustainable.
By KDR81

10/28/08 at 2:58 p.m.

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And that is why the Casino industry will pay the price. THey overcapitalized on the high end.

When the market starts returning to normal they will shift capital toward producing middle-tier casinos, or maybe spruce up some of the older ones.
By gqbossing

10/28/08 at 3:42 p.m.

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Most of the future boom IMO will be in the cheesy cheaper themed casinos catering to mid level people who are in the $100 per night hotel room, $10-$20 per plate meal, mid level games (in todays dollars not adjusted for inflation).

There are only so many high rollers in the world, and places like Harrahs and MGM right now are surviving because of places like these (Imperial Palace, Flamingo, Harrahs, Ballys, Bills) and (Luxor, Excalibur, TI, Monte Carlo, NY NY)
By redferret

10/28/08 at 3:48 p.m.

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I can't wait for the current corrupt club trend to go away. That is definitely not sustainable. 100 per head to get in, more to even get a seat, 10 bucks a drink to have it whisked away when you aren't even half done, cutters fees to go to the front of the bathroom line. All bunk in need of going away.
By stevem

10/28/08 at 7:51 p.m.

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those first 2 or 3 clubs were cool because they played DANCE music, but as soon as it became all hip-hop and "hosted" by kevin federline, they just got stupid.

i work in advertising and i could get in just about any of those clubs for free on any given night..and i don't. yuck.
By Willy

10/28/08 at 11:19 p.m.

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All you wannabe pundits need some business lessons. All that can be built on the Strip right now is high end, land and construction are just too expensive to build mid-tier. Basic economic laws dictate this, limited resources tend to find their highest returning value options. In other words the builder with the project which can earn the most money will pay more for the land than the guy drawing middle America.

No matter, the high end places go in and the existing casinos move down the chain. The middle America builder just buys an existing property and makes it their own at the appropriate price.
By gold1020

10/28/08 at 11:46 p.m.

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For a tourist town like Vegas to have gone mostly High roller-High Luxury is gonna prove to be long term huge mistake. Vegas used to be a town that appreciated & welcomed tourists with room & food deals. Thats all gone. People are not gonna fly to Vegas to spend 700 for a weekend when everyone has a casino within an hours drive from their own home. No one needs Vegas anymore because its not exclusive like it used to be.
By azsk8fan

10/29/08 at 5:56 a.m.

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Vegas needs to get back to the basics. Cater to the middle class because there's more of us than whales. The average joe can no longer afford to have fun in Vegas so unless Vegas changes its approach they are doomed to continue to fight each and every last whale they can rope in. ByeBye vegas....
By homer

10/29/08 at 9:10 a.m.

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Where is neiman1 with his ridculous rant about Reid and Pelosi not drilling for oil now on Sahara Ave.? Oil may not have rights on Sahara Ave. but they do have 86K acres of land they have not drilled on yet. I wonder why gas prices have dropped more than a dollar? Maybe big oil is threatebed by neiman1 and his rants or it could just be natural market forces which all of the reactionaries predicted would never happen without immediate off shore drilling now?
By azsk8fan

10/29/08 at 10:20 a.m.

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Why did gas prices drop the last time we were close to an election? Let's see what happens to gas prices AFTER Nov. 4th.......

As for drilling on Sahara Ave. - good one :)
By harske

10/29/08 at 1:23 p.m.

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As a wannabe pundit who did take some business lessons, I offer this: an even more basic economic law is that if your cost-to-profit ratio is through the roof, it's probably better to not build it in the first place. How on earth did these genuises think that building $13 billion worth of new resort hotels all at once was a good idea, especially when any person with good 'ol common sense can tell that bubbles were bursting all around because every single fundamental of the economy was based on ridiculous, over-leveraged numbers? Did anyone with a Masters in BA think that the growth of the previous few years was sustainable? If so, they deserve whatever happens to them. This is what they get for totally losing touch with the average vacationer and consumer.

I'd love to see an internal report that shows justification for City Center, Echelon, the Cosmopolitan, Fountainbleu.... etc. It would have to be almost pure fiction.

It's really simple, one of two things has happened here. Either 1) the data was there over the last few years that showed just how bad an idea it was for this latest wave of development, and they chose to ignore it, or 2) the data wasn't there, and the developers (and to a larger extent most of Vegas itself) weren't aware of how precarious their position was and still is. For an economic downturn to hurt this many in one area this badly, I have to believe a long chain of ignorance is firmly in place within the hotel and gaming industry.

And before you think that I'm just piling on, I can assure you I've been saying this for a long time now. I thought more people saw what I did 4 or 5 years ago. The recent wave of catering to the high-end, boutique crowd had to have some consequences. Hopefully objective heads will prevail, and the next few years in Vegas won't be that bad. For what it's worth, I'm pullin' for you Las Vegas!