Las Vegas – Is the Boom Overextended? Again?

 

Las Vegas –
     Is Boom Overextended?

Yes, that’s the famous headline from this June 1955 Life Magazine issue.  Those words have been spoken again over the last year in Las Vegas.

 

Every now and again, if you’re around Vegas long enough, you hear about that infamous issue of Life Magazine with a Moulin Rouge showgirl on its cover. The issue is, to many, the “Dewey Defeats Truman” moment for Vegas journalism for the question its headline asked:

“Las Vegas—Is Boom Overextended?”

It’s a punchline to many on the Strip. Sheldon Adelson himself referenced it in an interview in advance of the Palazzo grand opening. The implication was that almost since the dawn of the destination, naysayers have wondered whether the city could continue to sustain its own urge to constantly grow.

In  2005,  some builders started getting more cautious. Not Steve Wynn  – he started the latest and largest building-boom Vegas has ever seen. More than 80 high-rise, condo, hotel, mixed-use and other major projects in the Las Vegas area are in various stages of planning, development and construction. 

True, in 2009, most came to a  stand-still. And some have lost their funding.  On the city’s world-famous Strip, two huge building sites are eerily quiet. Fontainebleau , a half-finished $3.9bn casino with 3,800  rooms, which intended to offer perks such as an Apple iMac computer in every room, went bust, but is rumoured to be have been purchased and posied to begin construction again.
 
Echelon , a $4.8bn resort bankrolled by Boyd Gaming, ceased construction in 2008 and I am told, will probably be torn down now, but I could not confirm that. If it was to be built, it would consist  of  a Shangri-La Hotel, a Delano Hotel, a Mondrian Hotel, and the Echelon Tower.

But I think the worst is over. Ask any taxi driver or hotel staff and they will tell you, the people are coming back more and more.

 

The Las Vegas Strip is bloated with new projects , boasting the latest in new urban architecture, design and technology. LEED certified “Green” buildings are making an entrance and many world-famous architects (starchitects) are stepping up to the plate.

But HOW MANY ROOMS can one city fill???

Sheldon Adelson  is said to be looking at moving the Sands Expo Center elsewhere to make room for 7,000 more rooms, Wynn wants another 5,000 in place of his golf course allegedly, Station Casinos wanted 10,000 more just west of the Strip in its $10 BILLION Viva project  (pictured – the project is on hold, but has not been scrapped) and someone—maybe the Plaza folks, maybe not—is going to do something big on the former Frontier property. Who knows. There is always a lot of talk. And right now, everyone is in a holding pattern, but still very postive about the future of Las Vegas and its continued growth.

Which brings us back to where Las Vegas was in 1955 when that seemingly foolish headline and article were written.
 
How big is  TOO BIG?

Who knows.
I personally think, many eyes are watching CityCenter .
Bursting skywards in the middle of America’s gambling capital, seven glittering towers sparkle. The lavish $11bn  CityCenter complex has a casino, four hotels, luxury apartments, a fire station and even an on-site power station. 7,000  rooms and apartments. But its timing couldn’t have been worse. Opening their doors in tough economic times.

A joint venture between the casino operator MGM Mirage and Dubai World , the vast CityCenter development in Las Vegas is the biggest privately funded construction project in the US. It is billed as “a city within a city” and  sits  between the Bellagio’s dancing fountains and the faux Manhattan skyline of New York New York.

 Brian McGill, a gaming analyst at stockbroker Janney Montgomery Scott, says “As many as 15,000 new rooms have opened and/or will shortly open on the Las Vegas strip, requiring an extra $3.2bn of annual tourist spending to make any money. There’s too much supply, particularly at the high end,” he says, and he  struggles to see a quick return to profit for casinos.
 
“They believed the good times were going to continue to roll for ever in Las Vegas. They believed there would be no significant downturn and even in a downturn, they didn’t believe a recession would affect the higher end.”

Economists  say the tide is starting to turn .  And Las Vegas has always been a city a dreams.
The building boom was not overextended in 1955 –  and I doubt it is now either!

You can check out Las Vegas Today and Tomorrow for up to date news and happenings.

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