Economic indicators offer mixed bag on NLV’s recovery from recession

By Brian Nordli

Wednesday, Oct. 16, 2013 | 2 a.m.

For the past five years, North Las Vegas has been defined by its economic turmoil.

Mayor John Lee said as much earlier this year when he was elected. The housing crash decimated the city, which had relied on the booming real estate industry during its growth. As a result, North Las Vegas has been forced to slash staff, declare two unprecedented financial emergencies to overcome large budget deficits and close pools and its detention center.

Stephen Brown, a professor at UNLV Center for Business Economic Research, said North Las Vegas was hit harder by the recession than any other city in Southern Nevada. Lee is confident the worst is over and hopes in a few years his city can shed its financial troubles from the Great Recession and become an area of job growth with new businesses filling in its acres of available land.

While the rest of the Las Vegas Valley is slowly recovering, North Las Vegas has a long road to go before it is fully healed.

Here are five groups of indicators of North Las Vegas’ recovery from the recession:

• 

  Leila Navidi

  Unemployment rate: 11.3, down from 13.9 percent in 2012

  Employment growth: up, 2.1 percent

  Trend: Positive

  Unemployment rates have been dropping for the rest of the Las Vegas Valley, and the same holds true for North Las Vegas. The increase in employment is an important factor in the cycle of economic growth for a city. Still, North Las Vegas’ 2.1 percent employment growth rate lags behind the rest of the valley, which had a rate of 7.6 percent in May 2013, according to UNLV’s midyear Economic Outlook.

  Source: Applied Analysis

• 

  Steve Marcus

  2013 Assessed valuation: $3,987,869,401; down 10.1 percent from last year and 56.3 percent over the last five years

  Trend: Negative

  Like most of the Las Vegas Valley, North Las Vegas has seen its assessed valuation plummet since the recession, but no city has experienced a more dramatic decrease. The amount of property tax revenue a city can generate is dependent on assessed valuation. When property values drop, the result is a dwindling tax base, said Brown. It is one of the main reasons the city has dealt with enormous budget deficits. However, Brown notes property values are increasing across the valley, which could mean rising assessed valuation for North Las Vegas in the future.

  Source: Nevada Department of Taxation (North Las Vegas 2013 Community Report)

• 

  Steve Marcus

  Property tax revenue: $7,484,822 (2012-2013 budget projection), down more than $1 million from previous budget

  Trend: Negative

  Brown characterizes North Las Vegas as a “bedroom” community, a place where the residents live but don’t work or play. Before the recession, revenue soared as the city boomed, but after the housing market crashed those receipts have dwindled.

  “They have an eroding tax base, and from what I surmise their residential property was hit harder than metro area as a whole,” Brown said. “City governments are very dependent on property taxes.”

  Source: North Las Vegas 2013 Community Report

• 

  Lori Cain

  Bond rating: S&P: BBB+, outlook: negative; Moody’s: Ba1, outlook: negative; Fitch: BB+, outlook negative

  Trend: Negative

  Bond ratings reflect the image a community has and the risk associated with it. As recently as July, Fitch downgraded North Las Vegas to a BB+ from a BBB. A lower rating can make it harder for a city to raise new capital at an affordable price. North Las Vegas acting finance director Darren Adair said the city could repair its bond rating through more transparency about its business model and plans for the city.

  “For a little while we will be in the penalty box,” Adair said, “and we’ll have to prove ourselves again. And when we do that, the bond ratings will come up and the confidence level in the community will come up with it.”

  Source: Applied Analysis

• 

  Steve Marcus

  Residential foreclosures: 19 in second quarter of fiscal year; down from 53 in the same quarter a year ago

  Trend: Positive

  While property taxes have continued to trend downward, residential foreclosures are slowing. Vacant homes are a key area that Brown said he looks at in determining a city’s health, and that appears to be improving. However, North Las Vegas still has a long road to travel before it can completely recover from the recession.

  Source: Applied Analysis