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M Resort chief: Vegas gaming industry in 'survival mode'

LAS VEGAS, Nevada -- M Resort founder Anthony Marnell III offered a sobering economic outlook for Las Vegas on Thursday -- and harshly criticized banks that received government bailout money and then turned against struggling borrowers.

Marnell spoke during a luncheon of the National Association of Minority Contractors Nevada Chapter at his resort in Henderson.

"Las Vegas is facing some unbelievably challenging times," he said. "The availability of credit and capital is going to continue to contract."

"The hope for mega projects is gone for quite awhile," he said. "The banks have all they can take of Las Vegas."

He said consumer spending drives the Las Vegas economy and until consumers have the money and want to spend it, economic conditions here will remain difficult.

"The stark cold reality we are in, is we are in survival mode," said Marnell, whose resort opened in March.

In his industry, hotel room rates are at levels last seen in 1999 and 2000 -- levels too low to support the industry's capital investment, he said.

In this environment, everyone will have to make do with less, he said.

"Everyone's going to have to chip in. From my position all the way down to the laborer on the job. It means a reduction in wages for guys like me and a reduction for guys in the union hall," he said.

And having sustained huge losses, banks are going to exert greater control over projects they lend to and may dictate key decisions about capital expenditures.

"There are going to be a lot of new partners at the table who will put handcuffs on the operators," he said.

He urged business people to focus on their core product, and keeping their core people employed; and that in planning they should not anticipate an economic turnaround anytime soon.

"The key to success is to survive. It takes a view of realism," he said.

Asked whether companies should engage in new green building initiatives, Marnell said that for him, that's not a core product.

"I believe in the green movement," he said. But in the case of the M Resort, it didn't make economic sense to have it built to LEED green building energy-efficiency standards, he said.

"I can't afford it even though I know it's the right thing to do," he said. "How can you drive a business on that when I can't afford to pay for it?"

Marnell also said he was happy that the CityCenter project obtained its construction financing and is hopeful the Fontainebleau will obtain the final funding it needs.

Marnell said he's outraged that banks accept government bailout money, "and then turn around and foreclose on our properties."

He said he had called the governor and Nevada's senators to express concern over this and urged other business people to do the same.

Marnell said he's a capitalist, but felt compelled to speak out because the nation crossed a line when it bailed out the banks and now the banks need to respond in kind.

"They're taking our dollars and putting their fingers in our chests," he said.

Copyright © Las Vegas Sun. Inc. Republished with permission.

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