![]() Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter! Related Links
Related News
Recent Articles
|
Gaming Guru
Unemployment would bump if CityCenter falls through30 March 2009
LAS VEGAS, Nevada -- Any long-term disruption to building the $8.7 billion CityCenter on the Strip would likely bump Southern Nevada's unemployment rate by 1 percentage point, a local economist said Friday. At 10.1 percent, the local unemployment rate is already above the national average and could go to 11.1 percent if some 8,500 construction workers were laid off at the massive development that has run into financial problems, said Alan Schlottmann, economics professor at University of Nevada, Las Vegas. MGM Mirage made its $200 million payment Friday after reports of a lawsuit with partner Dubai World and a possible bankruptcy reorganization emerged earlier in the week. Schlottmann said he did some "back-of-the-envelope calculations" and could see unemployment hitting 11 percent if CityCenter shuts down. "What if MGM restructures and halts CityCenter, literally stops it? The short-run impact of those jobs could be really unpleasant," he said. "If all of a sudden those guys aren't spending money, what's the economic multiplier?" Schlottmann noted that Nevada taxable sales were down 13.2 percent in January, and that the only sectors showing improved sales were specialty trade contractors and builders. "You've got to remember, it's not only those guys' jobs (at CityCenter). They're going to stop buying materials," Schlottmann said. Southern Nevada's construction industry, which once accounted for 11 percent of the total work force, has lost an estimated 16,000 to 20,000 jobs during the recession. Employment and population growth in Las Vegas is directly tied to construction permit activity, business consultant John Restrepo of Restrepo Consulting Group said. When residential and commercial construction slows, so does the local economy, he said. With Friday's payment, it's evident that MGM Mirage is committed to finishing CityCenter and the banks are cooperating to move the project forward, Restrepo said. "Everyone clearly understands the importance economically, psychologically and socially to the local community," he said. Like the UNLV professor, Restrepo believes shutting down the project would have a "material impact" on the unemployment rate, factoring direct and indirect jobs, of up to 1 percentage point. Schlottmann said MGM Mirage officials made two risky assumptions when they announced CityCenter in 2004. One, that it would be built and completed on time; and two, that demand would come from outside the community. "They had to assume new demand would be over and above the current level of economic activity and filling existing rooms. As soon as that started to get shaky ... wow, we're in trouble," Schlottmann said. "What if everyone who used to go to Bellagio and MGM Grand and Mirage came to us instead? There's no new demand. They're coming to us instead of other casinos. We're a substitute." Copyright GamingWire. All rights reserved.
Unemployment would bump if CityCenter falls through
is republished from Online.CasinoCity.com.
Related Links
Related News
Recent Articles
|