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StumbleAnalyst: CityCenter’s opening will ‘push economy forward’
Fireworks explode over the Aria hotel-casino during the official opening Wednesday, Dec. 16, 2009. Aria is the centerpiece of the $8.5 billion CityCenter project, which is a partnership between MGM Mirage and Dubai World.
Thursday, Dec. 17, 2009 | 11:53 a.m.
Aria opens its doors to the public
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del.icio.usCityCenter's Aria has opened its doors to the public. Fireworks exploded over the centerpiece of the $8.5 billion CityCenter project, and people eagerly awaited to be the first inside Aria, which is a partnership between MGM Mirage and Dubai World.
CityCenter's Aria Makes Debut
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CityCenter's Aria makes it long awaited debut to the public.
Related stories
- At CityCenter, art for the masses right next to the slots (12-17-2009)
- What's being said about CityCenter (12-17-2009)
- MGM Mirage execs gather to mark opening of CityCenter (12-16-2009)
- CityCenter aims to make dining experience 'cooler and hipper' (12-16-2009)
- Water — swirling, spewing, frozen — to entertain visitors at CityCenter (12-16-2009)
- Inside Aria: A glimpse into the heart of CityCenter (12-14-2009)
Sun Coverage
A day after a UNLV report painted a pessimistic picture about the Las Vegas economy, a local analyst pointed to signs of improvement and at least some hope.
During a video conference today sponsored by Nevada State Bank, Jeremy Aguero, a principal at Applied Analysis, said Las Vegas has a lot to overcome with its job losses, overdevelopment and stalled projects. But Aguero said signs of improvement in the national economy are starting to pay dividends in Las Vegas with visitor volume in September and October ahead of 2008, reversing the trend of previous months. He said the opening of CityCenter should help the city build on that growth in visitors as other resort openings have done in the past.
“We are bullish and hopeful on the opening of CityCenter that it will continue to push our economy forward,” Aguero said.
A report, however, issued Wednesday by the Center for Business and Economic Research at UNLV suggested CityCenter won’t be a panacea for the Las Vegas economy and will cannibalize from other properties and lower room rates.
“We had an massive expansion of rooms during the worst economic crisis since the 1980s,” said Mary Riddel, the center’s interim director. “We are in trouble. We are overbuilt.”
Aguero contends Southern Nevada may not lag much behind the recovery of the nation as a whole because as people have more disposable income, they are going to want to come to Las Vegas. Las Vegas has become a low-cost alternative where money can go much further than other tourist destinations, he said.
“The nation’s economy and global economy are both improving, and we are seeing some signs here in Nevada as well,” said Aguero, who cited fewer job loss claims in a city that has lost 88,400 jobs from its peak.
Aguero tempered his optimism, however, by pointing out that consumers' disposal income to spend won’t be as great over the next 10 years as it has been in the past.
This will mark the end of the megaresort era with the focus in the next decade not building new projects, but filling rooms, he said. Aguero cited concerns about the commercial real estate market with office vacancy running at about 25 percent and retail and industrial vacancies surpassing 10 percent.
“Southern Nevada is in a position we have not seen in a long time,” Aguero said. “There is no next project.”
Las Vegas also remains at risk for an increase in home foreclosures, but Aguero said it appears home prices are stabilizing.
By the latest count, eight of 100 homes are vacant, for a total of 64,800, Aguero said. That will require a population growth of 97,000 to fill that space, which means about 49,000 jobs.
The economy needs to create 75,000 jobs to drop the jobless rate from 13 percent to 5 or 5.5 percent, he said.
Only massive job creation will lower the vacancy rate for commercial buildings, he said.
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Locally owned and independent for more than 50 years.
If the net gain is a few thousand people who come just to check out a new property, great.
Let's point out some words used in this article.
1. "He said the opening of CityCenter should help the city build on that growth in visitors as other resort openings have done in the past."
Should? SHOULD? Got any FACTS as to why it "should" help Aguero? A lot of things "should" happen next year, like maybe the sun will come up in the East. Tell me WHY you think CityCenter opening SHOULD help the local economy. Encore opened and nothing changed. Palazzo opened and nothing changed. So why should CityCenter opening make change happen?
2. "Aguero contends Southern Nevada may not lag much behind the recovery of the nation as a whole because as people have more disposable income, they are going to want to come to Las Vegas. Las Vegas has become a low-cost alternative where money can go much further than other tourist destinations, he said."
As people have MORE disposable income? What planet are you living on??? Vegas is a low-cost alternative? WHAT??? A steak costs at least $40 at every joint in town. People have been losing their jobs left & right and you think that "as" they have more disposable income which means you ASSUME (again, no facts) that when they FINALLY get more money they're just going to jump on a plane and buy $1,000 bottle service and $40 steaks all weekend.
What about the facts that there are $1.2 trillion in Option-Arms and Alt-A loans resetting and millions of Americans are freaking out about being put out on the street with no where to go Aguero?
3. "The nation's economy and global economy are both improving, and we are seeing some signs here in Nevada as well," said Aguero, who cited fewer job loss claims in a city that has lost 88,400 jobs from its peak."
Oh my God, are you serious? When did the stock market rebound? Everything I read about Asian markets is how they are scared to death of our economy.
And then this stunning realization: "We lost less jobs than we usually did." WE'RE STILL LOSING JOBS YOU NITWIT. Losing "less" jobs doesn't mean the recovery is in full swing when there are no jobs being created whether it's in Southern Nevada or anywhere across America!
At least you pointed out the number of jobs that need to be created. Got any idea when those 75,000 jobs "should" be created so we're "losing less jobs" and "as people get disposable income" they'll come to CityCenter and blow their wad at Aria? You'll probably tell me it "should" happen in the 3rd Quarter of 2010.
Until you solve the chart at the 3:45 mark of this 60 Minutes video that was released one year ago on CBS in December 2008, shut your mouth about the recovery b.s.
http://www.cbsnews.com/video/watch/?id=4...
2016. That's the year all Las Vegans need to plan for.
Why 2016?
Option Arms and Alt-A's finish resetting in 2012. The market crashes again sometime between now and 2013. Then after the bad loans have been purged from the system, recovery begins. That will take four to five years.
Check www.bls.gov and the historical data for when unemployment was at 10.8% in December of 1982 and it took five years for it to get down to 5.7% in December of 1987.
I'm going to ASSUME we can do it in four years this time around. 2012 for all the bad loans to reset, four years from then for unemployment to come back down. Hence, 2016.
I want facts. Not opinions. These "crystal ball" forecasters do nothing but tick me off.
So do nothing until 2016?...
Could be wrong but just don't foresee China's willingness to subsidize the extension of Nevadans unemployment benefits until 2016.
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Hylander, here's what I would do.
1. Build I-11 from Phoenix to Reno. Create a freeway that puts both Las Vegas and Reno in the crosshairs of two major freeways.
Why? So that businesses can setup shop in Northern and Southern Nevada and create shipping hubs. Reno is already connected to I-80 which runs from San Francisco to Philadelphia. Vegas can connect to I-10 headed east which runs from Los Angeles to Jacksonville, Florida.
2. Start making a SERIOUS investment in overhauling the educational system. You can build I-11 and make it attractive for businesses to set up shop here, but businesses want good schools for families to relocate here.
3. Attract businesses outside of gaming here once the infrastructure of freeways, possibly a new airport, and education have been addressed. I built a trash bag manufacturing company that wanted a West Coast distribution point but did NOT want to be IN California. Nevada can take advantage of that, IF it wants to.
Everything I just listed takes 15-20 years to make happen. I know this, but that's what I would do. The city of Pittsburgh is reaping the benefits of investing heavily in education.
I'm originally from metro Detroit. I have lived my whole life in "one-trick pony" towns. Detroit had cars, Vegas only has gaming but Nevada has great weather in Southern Nevada, a great tax situation for businesses, and great location for companies that want to be in the West Coast without putting up with California's laws.
Diversification of Nevada's businesses can be done.
Nevada's educational system can be overhauled.
It will take a monumental effort. Will the current leaders rise up to the challenge or just do business as usual? I have no idea. But that's what I would push for.
Or just wait until people have money again and hope they come to Nevada. We'll see what happens.
P.S. Go look at a map of what I proposed for I-11.
Vegas would be in an "X". I-15 and I-11.
If they built I-11 to connect with I-5 then Reno would be in a cross-section as well.
With I-11 running NW/SE, then Vegas could ship NW to Reno and I-80 which connects to I-5 if they passed on connecting I-11 to I-5. Either way, this takes you to the Pacific Northwest. Vegas could ship SE to Phoenix which connects you with I-40 and I-10.
With I-15 running SW/NE, then Vegas could ship SW to L.A./San Diego and NE to Salt Lake City and so forth. Also, when going NE you could connect to I-70 headed towards Denver.
And with I-11, you really wouldn't be dealing with the traffic that I-5 in California gets.
If you've ever driven to Reno then you realize that it's just people passing through the desert. I think that many companies would prefer an alternative route through the Southwest/West Coast that avoids a majority of California's congestion.
Nevada can take advantage of it's location if it wants to. It needs to create the physical infrastructure and fix it's education system.
If Nevada was really ambitious, they could start building a "water pipeline" to California or Texas because when the water issue pops up I would just propose de-salination once it becomes cheaper. There is always a chance they could drill deeper for water too. Either way, I would plan ahead for water issues as well.
The economy needs to create 75,000 jobs to drop the jobless rate from 13 percent to 5 or 5.5 percent, he said.
Only massive job creation will lower the vacancy rate for commercial buildings, he said.
*****
It can't be done relying on just gaming. Maybe those empty units in Vdara and the other place can be leased out to companies that want to relocate to Nevada. Some corporate headquarters taking up 10 floors of either building. That's minimum 1200 jobs right there. Or how about Fountainbleau? Nice building for a corporate headquarters.
But we'll never see it......
Or hey - the governmnent could have bought the
F-Bleau and made it into a maximum security prison! Send those Gitmo jerks and all the other murderers, rapists, drug dealers over there and we'll see how many try to "dig a hole" thru a wall and try to escape.
lvdjlv
This Aguero doesn't give any suggestions on how to GET those 49,000 jobs!!! Again, more spin, more spin for City Center and Vegas. When someone or ANY of these so-called experts and analysts starts talking on how to diversity the Vegas economy and bring in these jobs, maybe then we'll start listening to them.
One other thing, I have no idea how we'd pay for my ideas, but my hope is that the businesses we attract create a larger tax base and the re-vamped educational system attracts more and more companies which in turn helps that tax base.
If you've ever seen the movie "Dave" where Frank Langella tells Kevin Klein that "If you find the money, then you can keep your d*mn shelter" and then Kevin Klein reviews the budget and stops some ineffective programs and saves the shelter program.
Yeah, I know it's a movie, but maybe we need to review our spending as a state and national government. I keep living in a dream world don't I?
Like I said, I hope our current leaders have some ideas. I'm spent.
I-11 interstate sounds like an excellent idea - especially to help out all the construction folks who just had their employment at City Center just come to an end...
I agree that City Center is a beautiful property and it will draw the looky loos, it will just take time. Our country needs to produce jobs for americans after letting thousands to be outsourced to overseas markets. Isn't that why Dina Titus is back at her post, to create more jobs for the citizens? Now there's a gung-ho politician!
@lvdjlv
You seem to have a lot of time on your hands.
Q. Take away all the Resorts in Vegas, what do you have in the Valley................?'
A. Next to nothing but the desert and a few dryed up springs, and don't forget the enterainers who will pay you a visit..
@lvdjlv Until the economy picks up u can discount all your plans ! Your water suggestion sounds good but that will take years if it ever gets passed. As tomslick said u seem to have a lot of time on your hands!
This is typically a slow weekend in Las Vegas, so it's hard to say what the demand is right now.
Definitely Christmas gets busier.
I cannot make heads or tails of how City Center or Aria is going to do moving forward.
This economy is a whole new paradigm.
"...Will Push Economy Forward..."
towards WHAT...?
An oncoming train....?
lvdjlv,
Although you are correct about when he Alt-A and option ARM loans are due to reset, you are ignoring the fact that some (i have no idea how many) will be modified including principle reductions. I know several that are in the process now. Not through fly by night mod companies or attorneys that just sprung up to loot desperate homeowners, but by the money center banks through their own loss mitigation departments. I won't even venture a guess on when the Las vegas economy will be completely rebounded but new approaches by the big banks will make things easier for many. I know of several loans in default that are being offered 40 year notes between 2 and 4% with 30 to 40% principle reductions. If these become more common, things could turn much quicker. It will be easier for the banks to swallow than doing repos and will require home retention as a condition of modification. They won't be the easiest to obtain but once the ball gets rolling I believe they will become more common, staving off foreclosure for many that are upside down,preventing them from being left with no where to go.
And keeping them here in southern nevada. if your mortgage payment goes from 2000 to 600/month, you will stay in nevada and be able to afford your home, even if you are just flipping burgers, as the income you will need to stay afloat will be cutso low that many more jobs that arent an answer to most peoples problems, will now solve them
I am thinking City Center wouldn't be capable of standing upon its own two feet i.e. become profitable -- the accumulated debt will not only sink this "flag" ship but may take others in the MGM fleet along with it.
MGM 52 week high $16.89 low $1.81 close $9.89
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BTW: Are telescopes included with the condos/hotel rooms or does one have to provide their own?
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Why did MGM board member/senior executive (Corp Gen'l Counsel) resign suddenly lthis week just before the opening of City Center. It wasn't his name/picture in the paper all week , and he wasn't the development executive/poker player.
Could there be board rumblings about an aging KK and the true cost and effect of CC on MGM's future. Stay tuned. This is just starting to unravel.
I-11 a good idea? One of the things we need to do is to reduce our energy consumption and our use of individual tanks - ok, so build railroads! Salt Lake City to Vegas to Phoenix and improve the other lines across country.
the "evil rich people" that hire people aren't going to hire anyone until obama gets out of office.
so, if i hire people...so i can make more money...you're going to take that money away from me...to pay for people that are too lazy to work?
ya, go smoke a bong and buy some birkenstocks, you stupid hippy.
why werent the evil rich people hiring BEFORE obama got in office, too busy bagging up money under Duhbya's tax cuts?
Thank you, stevem.
VERY simple concept, high corporate/business taxes equals negative job growth. Period.
It is so completely irrelevant what an analyist says or writes. These guys are usually paid by corporations, brokers, banks , and act as ambassadors to influence customers, investors, and such. I don't believe one single word that's written. To me, this will only hurt the exisiting casinos and lead to some movement on the Strip. It does not bring in additional traffic. You will see more traffic to come when the airlines decide to start additional flights into McCarran. Not before.
From Switzerland