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July 30, 2014

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THE WORKERS:

CityCenter shutdown would leave few options for many in construction

CityCenter Construction

MGM Mirage's $9 billion CityCenter project, encompassing seven buildings, continues rising Thursday, Feb. 5, 2009. Launch slideshow »

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Shiny skyscrapers covered in nets.

Gates locked.

Eighty-five hundred workers laid off.

Twelve thousand permanent jobs delayed.

This was the nightmare scenario whispered throughout a panic-stricken Las Vegas this week. Rumors swirled that MGM Mirage and Dubai World, owners of the $8.7 billion CityCenter project, might not make a $200 million payment to keep the county’s largest construction project on track.

It didn’t turn out that way, of course. MGM Mirage made the full payment, even as Dubai World skipped its portion. But questions remain as MGM Mirage teeters on the edge of bankruptcy.

The shutdown or delay of what was once envisioned as a new urban core, rapidly rising on 67 acres on the Las Vegas Strip, could have drastic effects, economists said Friday.

For starters, add half a percentage point to a state unemployment rate, which is among the nation’s highest at 10.1 percent.

That is counting only the 8,500 construction workers who would lose jobs in what would likely be the biggest single layoff in state history, observers say.

On top of that, factor in 1,600 to 1,700 suppliers, service workers and others who cater to those workers, plus the delay of 12,000 permanent jobs to be added to the economy by the end of the year, when CityCenter’s casino, shops, restaurants, and hotels are scheduled to open.

Despite the cyclical nature of construction work, a delayed CityCenter would be difficult for the economy to absorb, experts say. There are nearly 30,000 fewer construction jobs than there were 18 months ago and 23,400 fewer hospitality and gaming jobs.

“In construction jobs, you always have some phasing built in,” Nevada state demographer Jeff Hardcastle said. “But if construction stopped today and that wasn’t part of the planned phasing, that has a greater chance of hurting people’s livelihoods.”

Communitywide, “it would also have a psychological as well as an economic impact,” Hardcastle said.

MGM Mirage has long touted CityCenter’s value to the local economy and emphasized that Friday.

“MGM Mirage believes that CityCenter is of vital importance to Las Vegas and the state of Nevada,” Jim Murren, chairman and CEO of MGM Mirage, said in a statement. “We will continue to make every effort to see that CityCenter is completed and becomes an even greater economic driver for the region.”

Construction union officials fielded phone calls from alarmed members Friday.

Though everyone always understood CityCenter construction jobs wouldn’t last, originally the workers — many recruited to town to fuel the boom — were expected to easily find work on other projects after it ended.

The picture changed dramatically in August when Boyd Gaming announced it was delaying its partly built $4.8 billion Echelon project.

“I always try to prepare my members to save their money and not to panic,” said David Jones, business manager for the International Brotherhood of Electrical Workers Local 357. He has more than 2,500 members working at CityCenter.

The union’s workers are in one of the few trades still near full employment, but “that won’t be the case if this project shuts down,” Jones said.

“If you’ve been in the business any length of time you have to understand there’s highs and lows. My job is to make sure my local members can maintain employment. They have children in schools. They own homes here and pay taxes.”

Jones said he expects the airport’s $1.2 billion Terminal Three project to hire many members, as well as new water and power projects. He also hopes that several planned large solar projects will be hiring workers before too long.

Tommy White, business manager and secretary-treasurer of the Laborers Union Local 872, sees a future for his members in highway work and other infrastructure projects.

Those are areas expected to expand because of money coming in from the $800 billion federal economic stimulus package.

But those projects aren’t expected to pick up steam until the end of the year, leaving a gap if work at CityCenter is halted or finishes earlier than planned.

For the trades not as involved in public infrastructure and energy projects, the outlook is bleaker.

A third of the 5,000 members in the painters and glaziers union are looking for work. That will bump up to more than a half if CityCenter shuts down right away.

“If this project doesn’t continue, the bottom will be falling out from us,” said John Smirk, secretary-treasurer of the unions’ district council. “Hope is not a strategy.”

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