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Las Vegas Growth Needs Direction

The real question shaping up, however, is where it goes, north or south, and where Las Vegas wants to be headed as a community.

Fundamentally, a new urban core probably is just over the horizon for Las Vegas as development boomerangs north for now from the "Mandalay Mile," the stretch of Mandalay Resorts properties on the South Strip.

"Between Sahara and Spring Mountain. That's where it's all going to happen," said Harrah's Senior Vice President Jan Jones.

And, "because with redevelopment it all becomes one big area, it'll be a new urban core and cultural center for Las Vegas. The must see attractions in Las Vegas are going to be Le Reve and Fashion Show mall," said Jones, former Las Vegas mayor.

"I think eventually (the monorail) will do a loop around this new urban core," she said, making it more attractive for visitors and investors alike.

Le Reve, Fashion Show and the monorail are going to make the four older hotel-casinos in the area moving targets for redevelopment, she said.

"Knocking them down and building from the ground up" is likely, Jones said. "Naysayers will say no, just as they did about the Dunes when I was mayor.

"But look at what happened. No one thought the price of the Dunes was competitive. Everyone said it was too expensive. But then $186 million became a bargain," she said, referring to the development of the Bellagio.

With Steve Wynn's Le Reve startup, "developers and operators are going to be taking second looks at the Stardust, Frontier, Circus Circus and Sahara," Jones said.

Others say the Wet 'n Wild theme park will be a fifth target.

"Steve has always driven the Strip, and I think Le Reve will (have the same impact)," she said. "The Frontier and the vacant land in the area now will be prime targets for development.

"Wynn knows what drives development. You want walk-ins. There's as much money in walk-ins - retail - as gaming," Jones said.

"With Le Reve, (development around the Frontier) makes sense again. And you won't have to build your own convention space."

New Frontier owner Phil Ruffin's plans to redevelop his aging Strip hotel-casino into a $1 billion, 2,500-room San Francisco-themed megaresort will move forward once financing for Wynn's Le Reve project is settled.

The New Frontier plans include a $350 million, 60-story luxury condominium project that would be developed by Donald Trump. The project, which still has not been financed, would be the New Jersey casino boss's first entry into the Las Vegas gaming market.

Boyd Gaming is focused on developing the Borgata in Atlantic City, N.J., but at the recent Global Gaming Expo the company acknowledged it also may redevelop its Stardust property at some time yet to be determined.

There are no plans currently for redeveloping the Sahara, Circus Circus or Wet 'n Wild sites.

Other projects are already remaking the North Strip area.

The recently completed, $170 million south hall of the Las Vegas Convention Center added 1.3 million square feet to the convention center, bringing the total space to 3.2 million square feet.

The $1.8 billion, 2,701-room Le Reve resort and a $1 billion, 1.2 million-square-foot Fashion Show expansion already are under construction.

Other major projects in the area around Wynn's Le Reve and Fashion Show mall include The Venetian and Turnberry Place.

"The question is, does Le Reve change the dynamics of the market again as much as Wynn's other properties did. It's all about return on capital," Jones said. "Assuming we still have airlines coming in and the war with Iraq doesn't happen."

Phil Rosenquist, director of development services for Clark County, agreed the direction of development will be "market driven."

Clark County is in the midst of a second building boom in a decade with a record $1.99 billion in commercial and residential permits issued through July 31. That is $500 million ahead of the same period a year earlier, Rosenquist said.

"People make market driven investment decisions. Steve Wynn may be a catalyst and may trigger" a domino investment effect, Rosenquist said.

City of Las Vegas business development director Lisa Coder said that "any prediction would require a crystal ball and would be speculative. The market will drive itself based on proximity to other successes, the availability of land and price."

However, she said, "I believe (development) will be headed slightly in all directions."

Coder sees it headed east, west "and maybe a little north" of the Fashion Show mall/Le Reve core.

"The city would be fortunate if added development (takes place) at Sahara and Las Vegas Boulevard," she said.

"Another resort would help link the Stratosphere (to the Strip) and create a needed cluster," Coder said. "The properties are ripe for redevelopment."

Others are skeptical. At the University of Nevada, Las Vegas, Keith Schwer, director of the UNLV Center for Business and Economic Research, said, "Future development will be between Las Vegas and Stateline."

The really big question, he said, is transportation and the location of the airport of the future. A major international hub airport has been proposed for Ivanpah.

"Transportation is a joint product with a Las Vegas visit. You have to travel to get here. Getting here becomes important," Schwer said.

"California isn't too big on building transportation (systems) in and out of the state, but the money spent here is respent in California. That will lead to transport development. The question is getting it built in a timely fashion."

Clark County's Enterprise Land Use Plan contemplates the possibility of 14 major resorts for the south end of the Strip, Rosenquist said.

"Will they all be built? Probably not. Will some? Probably. The question is where and when. I personally see it going both ways," he said.

Also at UNLV, economics professor and Clark County Planning Commissioner Bernard Malamud said future growth likely "will be toward the south and beyond Mandalay."

That doesn't mean there won't be development around Le Reve and Fashion Show, including the El Rancho, Frontier and Wet 'n Wild sites, he said.

"But the resort corridor is much greater to the south. And the spirit for megaresorts because they need so much space argues for southern development," Malamud said.

Jones, however, takes issue with development continuing south.

"It makes no sense to come this way," Jones said in an interview at Harrah's headquarters on the south side of McCarran International Airport. "The major capital investment, Fashion Show and Le Reve, is going the other way. I believe that will drive the center of the Strip back (north).

"Coming out this way offers no transportation for the public. The monorail is going to make the new urban core even more attractive," Jones said. And down here, "you're right under the flight path, which frankly I don't see as an attraction."

Coder agrees that significant height restrictions around the airport are a clear impediment "so south Las Vegas Boulevard won't be prepared for developing high rises."

"What happens downtown? It's in trouble. I'm still a great believer in Fremont Street. Downtown would be dead without an attraction. But it was never supposed to be a solution," Jones said.

"I don't see the redevelopment side going all the way to downtown Las Vegas. The large number of small properties makes it too hard to consolidate."

Another problem with downtown is that it is old and dilapidated, Jones said. "There are a lot of old operators downtown, but not much capital. None of them are going to change how they do business. They're all tied to old infrastructure."

Transportation is another problem with downtown, Jones said. "Even developing (north) beyond the Strip is very hard."

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