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July 22, 2014

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Dreary reality aside, optimists make case for Vegas revival

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Tiffany Brown

Analyst Jeremy Aguero told Preview Las Vegas attendees that advance convention bookings are up, one glimmer of hope amid Southern Nevada’s longtime skid.

Preview Las Vegas

MGM Mirage Chief Executive Jim Murren speaks at Preview Las Vegas at the Cox Pavilion in Las Vegas on Thursday, Jan. 28, 2010.  Launch slideshow »

Beyond the Sun

Watching Southern Nevada these past 30 months or so has been like watching a sick loved one wither and worsen, or like watching a continuous loop of an Ingmar Bergman film with dry, unsalted popcorn to snack on — endlessly depressing.

It has taken its toll. At the Greater Las Vegas Chamber of Commerce’s annual look to the year ahead, at the Thomas & Mack Center on Thursday, the crowd often responded to the upbeat roster of speakers with tepid, polite applause.

The foreclosures, the layoffs, the budget deficits and political paralysis, the stalled projects and empty buildings — they have many wondering whether Las Vegas is a city in permanent decline.

But what if there’s a case to be made that things aren’t so bad, that the seeds of our recovery just need a little water, that Las Vegas will rise again in the coming year and decade? Certainly the city has its weather, low taxes and newly cheap real estate to offer.

Rob Lang is betting on Las Vegas.

He moved here to become director of the Brookings Institution’s Mountain West Initiative at UNLV. He’s building a home here.

“I don’t dismiss the seriousness of the moment,” said Lang, who is also chairman of the Legislature’s Nevada Vision Stakeholder Group, which is attempting to create a plan for Nevada’s future.

In an interview, Lang recalled growing up in the New York City area during the 1970s, when the city faced a fiscal crisis that pushed it to the edge of bankruptcy, rapidly rising crime rates and a general sense of chaos.

“It was the end of civilization. A larger version of Detroit,” he said. But New York came back.

Lang also cited Phoenix, Dallas and Denver, which suffered tremendous commercial real estate overhangs in the wake of the savings and loan crisis of the 1980s. But all recovered, helped in part by the affordable office and retail space they could offer to bargain hunters during the 1990s.

The massive glut of commercial — and residential — development can actually be an advantage for Las Vegas, offering great deals to potential transplants, Lang said.

Great bargains can be added to good weather and low taxes in an argument that we will attract seniors like never before. Las Vegas real estate is now cheaper relative to that in Southern California than it was in 2000. A new influx of Californians could be coming.

Vast investments in renewable energy, thanks in part to state and federal government commitment and the massive carbon market in the European Union and Japan, could also be a source of new opportunity here, as carbon emitters need to fund offsets in other parts of the world.

What needs to happen? Lang lists a few key steps:

• “Take a deep breath and remember there is a future,” he said. “In terms of attitude, face the serious challenges, fix them as best you can. Do not allow a sense of gloom to settle. Who wants to go to downcast Las Vegas? No one wants an un-fun version of Las Vegas.”

• Strategic investments in human capital, including higher education.

• Build the interstate highway to Phoenix and develop regional partners on issues such as solar energy development.

• Improve transportation links to Los Angeles.

• Build on what we have, especially conventions, so that we become a global business city. As Lang noted, whoever thought Charlotte, N.C., would become a banking center?

“I’m playing the long game here,” he said.

In his presentation at the chamber event, economic consultant Jeremy Aguero likened Las Vegas to a patient who had been on the brink of death. He ran through the usual litany of bad news.

But Aguero also makes a case for optimism.

In the short term, the national economy has stabilized. Even if recovery doesn’t feel robust at the moment, advance convention bookings are up and expected to continue to improve through this year and next.

Aguero also points to seniors: Affordable real estate and improved health care infrastructure could bring a new wave of them.

A deal on north-south transmission lines completed this month is what the renewable energy industry needed to spur new development, which should benefit Nevada.

Jim Murren, CEO of MGM Mirage, has reason to be optimistic given what his company went through in 2009, when its massive debt load — $13 billion — crippled it and nearly shoved it into bankruptcy.

In his speech to the chamber Thursday, he told of being minutes from pulling the plug on CityCenter, of having to lay off workers, of the frightening visions of bankruptcy.

But they got the doors open at CityCenter last month, and the money is now coming in. Occupancy rates, gaming revenue and convention bookings are all up companywide, Murren said.

“I’m not saying we are out of the woods, but at least we can now see the green pasture,” he said.

Now back to that Bergman film.

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