Las Vegas, United States – The recent unveiling of a heralded new landmark on the Las Vegas Strip was quintessential Vegas.
The 20,000-seat T-Mobile Arena opened with a performance by the American rock band, The Killers, and legendary singer and entertainer Wayne Newton, who both hail from the city. Extravagant fireworks lit up the night sky.
Organisers proudly proclaimed that they had flown in nearly 318kg of live lobsters, 82kg of artisan cheeses for charcuterie plates and even three bottles of Louis XIII Cognac, valued at close to $9,000. High above the event floor, the 1,680sq-metre Hyde Lounge, part of a “nightlife venue” chain stretching from Miami to Hollywood, catered to well-heeled guests, alongside 50 luxury suites.
MGM Resorts International and AEG, two entertainment companies that jointly partnered on the project, spent about $375m and two years building the arena on the site of former car parks and office buildings at the southwest end of the Strip.
The eight-storey venue, which will host around 100 events a year – as varied as Nicki Minaj concerts and Ultimate Fighting Championship matches – is tailored towards today’s Las Vegas, where lavish entertainment and indulgent experiences trump slot machines and poker playing. Its extravagances and ostentatious opening match the current mood in the city, where an existential crisis of sorts spawned by the Great Recession appears to have well and truly receded.
“[This is] a project that was literally unthinkable during the depths of the Great Recession,” said Steve Sisolak, chairman of the Clark County Commission – the local government – during an afternoon ribbon-cutting event. “There were very dark days in the Las Vegas valley … real concerns about whether or not we’d survive the recession and one day thrive. The uncertainty and fear were palpable.”
With the sleek, glass-fronted structure looming large in the background, Sisolak added: “One need only look at the T-Mobile Arena to understand that Las Vegas has turned a corner and that we are back, better than ever. And I firmly believe the best is yet to come.”
In the early 2000s, Las Vegas was the fastest-growing major metropolitan area (PDF) in the US. New homes were built at a breakneck pace, and a larger portion of the workforce relied on construction than almost anywhere else in the country, said Elliott Parker, professor of economics at the University of Nevada, Reno. Adjusting for inflation, home prices doubled between 2001 and 2005. An unprecedented 39 million people visited the city in 2007, pushing hotel occupancy to a record 94 percent and gaming revenues (PDF) to a historic $10.9bn.
But when the housing market began to implode the following year, and recession followed, the region – which relies on construction and tourism, both of which suffered – was hit harder than most.
Clark County, in which Las Vegas sits, had the highest rate of home foreclosures nationwide for 31 consecutive months. By 2011, property prices had dropped two-thirds from their peak.
Unemployment leapt from 4.5 to 14 percent in three years as construction projects ground to a halt. Over the same period, annual visitor numbers dipped by nearly three million, and gambling intake by $2bn, while fewer trade conventions were scheduled. Cumulatively, this severely dented sales tax revenues which were relied upon heavily in one of the few US states with no income tax or corporation tax and minimal property taxes.
“Las Vegas went from boom to bust in a very dramatic fashion,” explained Parker. “And the recession lasted longer in Las Vegas than in the rest of the nation.”
By 2011, the situation had stabilised, and the economy has improved every year since across key industries, both on and off the Strip.
Days before the arena opening, MGM Resorts International unveiled a new, adjacent leisure and recreation district featuring a host of bars and restaurants, entertainment spaces and a landscaped park.
Other international operators are again targeting Las Vegas as part of their growth strategies with big multi-use projects. Further north on the Strip, Malaysian developer Genting Group broke ground last year on a $4bn Chinese-themed casino-resort, at a nearly 36-hectare site that had sat idle since August 2008. Next door, Australia’s Crown Resorts are building an expansive new property.
Other key economic indicators, from property prices to tourism levels, show Vegas is returning to economic health. Last year saw a record 43.3 million visitors, 2.2 million more than in 2014. Convention business is booming: The city welcomed nearly six million delegates in 2015, the highest number since the recession. A $2.3bn revamp of the convention centre is under way alongside several other new exposition sites. This has swelled state coffers, with room tax revenues growing to $254m in 2015, from a recession-era low of $153m.
“The one thing about Las Vegas is they’re always reinventing themselves, and that always makes it a nice experience for our guests,” said Ed Several, of Connecticut-based Reed Expo, which organises conventions nationwide.
He has watched the city’s economic rollercoaster ride from close up during 12 years in his role and is impressed with its recovery as it competes with New York, Chicago and Orlando for expo business. “Each year, it seems like there are more new restaurants, more new entertainment activities, more new gaming opportunities, as well as more hotel options. So they are growing and continue to change and evolve.”
Casino revenues also grew marginally last year – in marked contrast to China’s global gaming goliath Macau, where gambling proceeds had risen to around seven times larger than Las Vegas, but have fallen for 22 consecutive months to a five-year low.
The Strip is now making more money overall than it did in 2007 and, perhaps most importantly, gaming makes up less than 40 percent of revenues, as retail, entertainment and leisure facilities draw in the dollars. The effort to diversify the city away from a traditional reliance on gaming and its dwindling revenues towards family-friendly tourism and conventions, as well as other service sector industries, is gaining momentum.
“Las Vegas has reinvented itself time and time again just to remain as the top destination point for the world, and I think today we’re standing at a crossroads of this reinvention,” said Mary Beth Scow, another Clark County commissioner, at the arena opening. “I know that we’re standing and sitting in a very special place – a place that represents the future of Las Vegas.”
Ever since Las Vegas was formally founded by ranchers and railway workers in the early stages of the last century, it has relied upon people relocating there permanently – and not just visiting – to help drive growth.
The city has experienced frequent population surges. The number of residents doubled in the 1930s, with the arrival of the Union Pacific Railroad and the first development of the Strip. It trebled in the 1940s, as casinos, such as the famed Golden Nugget, opened downtown and Nevada began taxing legal gaming.
But the most eye-popping rises have come in recent decades amid an era of mega casino-resorts that began when Steve Wynn opened the Mirage in 1989. It was the first new casino in 16 years and ignited a resort-building boom that has forever changed Las Vegas, including its size.
Since 1980, the number of residents has more than quadrupled to more than two million today. While the Great Recession briefly dented the trend – the population dropped for the first time in generations through 2008, and again in 2011 – the last five years (PDF) have seen a return to moderate growth.
People from all backgrounds, professions and corners of the world arrive in Las Vegas, typically eager for a better, warmer, more prosperous life, and bringing a pioneering spirit that the city was founded upon.
Soozi Jones Walker relocated from Orange County, California, in 1978 to get married. Growing up surfing around Huntington Beach, she liked Las Vegas’ similarly laid-back vibe – away from the Strip – that makes it feel like a southern Californian “bedroom community”. Walker knew she wanted to work in real estate and set about establishing a name for herself.
Nearly 40 years later, she is president of a commercial real estate sales and leasing company, working with her 37-year-old daughter for the past 15 years. She’s survived several downturns during those decades, and counts the last slump among the toughest.
“Nothing in Las Vegas and in Clark County was immune during the recession,” recalled Walker, who weathered the storm by working harder for longer and remaining patient for the inevitable rebound. “I was going back to basics that I’d done in the 80s and 90s … knowing that things always change.”
Behind the wheel of her white Corvette, Walker takes Al Jazeera on a lap of Las Vegas via its ring-road – the 215 Beltway – to see how prosperity is re-emerging far from the Strip. Starting on its southwest fringes, where the recession brought numerous real estate projects to a standstill, indications of renewal are everywhere, led by housing and condo construction and office park developments.
“These are all signs of health,” said Walker, pointing to fledging construction – just rods in the ground at this stage – on huge sandy lots.
Walker reckoned that the silver lining of the recession was the lowering of land prices, which has now spurred buying and building. As we head east, we pass a 30,700sq-metre IKEA set to open in May, creating 300 new jobs, and new industrial warehouses, including a 27,000sq-metre facility of gaming manufacturer Ainsworth.
“We had a reset of pricing because our market [was] Ground Zero for the recession,” she added. “I think that offers a tremendous opportunity for not only the new businesses coming here … but also for the people that live here.”
The housing market also rebounded in southern Nevada, as investors and homeowners took advantage of bargains amid tightening supply.
The median price of single-family homes sold in March was up 7.3 percent year-on-year, to $220,000; the median price of condominiums and townhouses has risen a more modest 2.6 percent, to $118,000, according to the Greater Las Vegas Association of Realtors. “The local housing market continues to be as stable as it has been in many years,” said Scott Beaudry, its president, noting there is a downside to the limited stock. “This tight inventory might be keeping prices up, but it makes it harder for buyers to find the right home.”
Nikolay Petrov, 42, who emigrated to the US with his wife and daughter from Bulgaria 13 years ago, used the steep recession-era price drop to enter the market. He bought a house in the city’s southwest in late 2008 for $130,000; it’s now worth around $200,000, he estimates.
“I bought at the right time,” said Petrov. He is confident it will keep its value, citing Las Vegas’ enviable affordability and low taxes as continuing to attract new residents. “Vegas is not always a good place to live, but it’s good to work, so people come,” he added.
Despite his savvy investment, Petrov, a metered taxi driver on the city’s streets for 11 years, misses the pre-recession days. He conceded that more visitors are now coming, but they are on business or family vacations and less generous than the flush gamblers of a decade ago.
“Online gaming and other casinos: That’s killed Vegas. The years like 05 and 06 will never come back,” he lamented. “It was so busy. People were throwing money everywhere. Every day for me it was easy to make $100 in tips. Now I’m lucky to get $40.”
The positive changes afoot in Las Vegas following the Great Recession are particularly evident downtown. After years of neglect, Fremont Street, the first in the city to be paved in 1925, has reinvented itself with a central pedestrian plaza and the introduction of new amusements, such as a popular zip line.
A few blocks away, the Fremont East District is the epicentre of an emerging food scene through new restaurants such as the award-winning Carson Kitchen. Opened in 2014, it offers “ingredient-driven, innovative dishes with the funky, hipster vibe of Downtown Las Vegas,” says a promoter.
Nearby, boutique stores, low-frills eateries and offbeat galleries have opened up in shipping containers set around a courtyard with a playground.
All the innovation has begun to draw visitors unaccustomed to venturing beyond the Strip.
Doug Armstrong, 50, the founder of a children’s nonprofit in Michigan, has visited Las Vegas regularly over the years for conventions and vacations and noticed it slowly become more family-friendly. This time, he brought along his wife and nine-year-old son and headed downtown for the first time.
“It’s kind of fun; I like it when they take a part of the city and turn it into a pedestrian area for people watching. And he’s having a blast,” Armstrong said, nodding at his son engrossed by two people flying through the air on the overhead zip line. “I wouldn’t have thought of [bringing kids] 20 years ago when I came then.”
As the sharing economy has exploded globally, Vegas has seen its share of the action too, from Airbnb offerings to a burgeoning start-up scene.
Rob Roy, the local founder of Switch and its world-renowned “SuperNap” data centres, has created the Innevation Center, a 6,040sq-metre collaborative workspace and community events venue just south of the Strip.
Elsewhere, people are leaving traditional hospitality industry jobs for their small slice of the gig economy.
Ibrahima Conde, a 40-year-old immigrant from Mali, who relocated to Las Vegas with his family from Indianapolis in 2012, first worked in casino-hotels such as the Cosmopolitan and Palms.
Six months ago, he decided he wanted flexible hours that allowed him to see more of his four children. So he started driving for Lyft, the e-hailing taxi service. His wife still works in housekeeping at the Planet Hollywood casino-resort on the Strip, and together they are making enough to survive.
“Business is sometimes good, sometimes bad; it goes up and down,” he said.
The father-of-four decided to move to the city following an enjoyable one-week vacation in 2011. He wanted better economic opportunities, but also the health benefits of living in a dry, desert environment. Two of Conde’s children – who are aged between five and 13 – suffer from asthma.In Indiana, it plagued them, with frequent hospital visits and medications, and the bills that went along with it.
“But once we moved here, I’ve never had to take them to hospital,” he said with a broad smile. “It’s a nice place to live.”
Conde has grown confident for the next few years in Vegas, with the two new mega-resorts at the northern end of the Strip set to open in 2018.
Past the developments, which sit opposite the soon-to-be rebuilt convention centre, he speaks excitedly of the future.
“It’s started to get busy already, and I think in 2018 it’s going to be so busy. It’s going to bring more business here. And that’s good for all of us.”
However, myriad challenges do still loom, regardless of whether Las Vegas has successfully changed from Sin City to the self-proclaimed Entertainment Capital of the World.
It remains overly reliant on the leisure and hospitality industries for employment, which, though back to pre-recession levels by most measures, have not returned to their sky-high growth rates. A change in the headwinds, with another economic downturn or dramatic rise in oil prices, could once again hit visitor numbers and stall construction projects.
“We’re cognisant of overbuilding again,” said Walker, who believes that the city is successfully diversifying into welcoming corporate, service-centric clients – such as credit card companies’ backroom operations – that are attracted by the burgeoning workforce and tax environment.
“You can see that the jobs have expanded away from gaming and away from hospitality,” she added, “because you don’t want to be a one-trick pony when a recession comes.”
Nonetheless, the long-term decline in gaming revenues still leaves a big hole to fill in the state budget of Nevada, cautioned Parker, the economics professor, adding that Las Vegas comprises about two-thirds of its economy, and revenues remain weak with low or no taxes compared with other states. This leaves too few funding streams for much-needed infrastructure projects amid the growing population and inflation.
“As a result, the state is still strapped,” he argues, “and finding revenues to pay for new schools, roads, sewers, and other infrastructure is still a real challenge.”
The private sector, which has filled some of this void by building streets, schools and entire communities, will continue to play a role.
In the early 1990s the Howard Hughes Corporation – a remnant division of the famous businessman’s myriad enterprises – created the-then largest planned community in the US on the city’s western edge.
Named Summerlin after Hughes’ paternal grandmother – Jean Amelia Summerlin – the 9,105-hectare site has grown to encompass more than 150 parks, two dozen public and private schools, and 14 houses of worship, among many other amenities.
Back at the T-Mobile Arena – another entirely privately funded entity – MGM Resorts’ chief executive, James Murren, finished the speeches by praising the city’s rising tide: “From dirt to this most spectacular arena … Where in the world can you build anything in two years, on time, on budget?” he asked.
“Right here in Las Vegas. That’s why we’re number one.”