From boomtown to gloomtown


Relatives came to town last week. We met up with them at the Monte Carlo and had dinner in the brewpub.

It was fairly early on Friday evening, but the place was already busy. A guy with a guitar belted out John Mellencamp. By the time we finished eating, the brewpub was packed and latecomers were spilling out into the casino.

The refrain could not be avoided: "What recession?"

The following day, I met the relatives again on the Strip. We ventured into Jimmy Buffett's Margaritaville restaurant at the Flamingo.

Thirty-minute wait for a table.

Based on these kinds of experiences, it's easy to conclude that there's something wrong with the grim picture presented by economic experts. Is Las Vegas really in such dire shape if mid-level places such as the Monte Carlo Brewpub and Margaritaville have such big weekend crowds?

Well, yes. As much as I appreciate a telling anecdote, it doesn't reflect the whole picture here. For the most part, the statistics don't lie. Air traffic is down. Gambling and sales tax revenues are down. Hotel occupancy rates are down. Unemployment is up. Home foreclosures and bankruptcies are up.

It's the worst recession in memory. And despite positive signs on the national front, forecasters don't see things getting better in Las Vegas anytime soon. The Economic Forum, a panel of business experts that provides guidance to the governor and state Legislature, painted a bleak picture last week. The state has a budget deficit that's at least $580 million deeper than the panel thought last summer.

Jeff Hardcastle, the state demographer, told the forum that Nevada could lose more than 100,000 in population over the next couple of years. Of course, stressing the difficulty of predicting such things, Hardcastle said it's possible the state could gain 100,000 people during that same period.

"Or we could stay flat," he said in an interview. "Right now things are very uncertain. It's almost getting to be that the word 'uncertain' is overused."

Still, considering all the factors Hardcastle is looking at, you come away with the impression that a drop in population is likely. And if so, this could be deeply unsettling for a state that has thrived on growth for more than a century.

Over that span, some smaller communities in Nevada have endured periodic population declines, but Las Vegas, the state's primary economic engine, hasn't had to worry about it since the 1920s.

As Hardcastle notes, Las Vegas, with its fast and sustained growth, created a development model with a built-in overcapacity. Since we knew the people would be coming, we kept building resorts, shopping centers, office complexes and housing. We never envisioned a future in which the growth would stop, let alone go in reverse.

And so, if the Economic Forum, state demographer and others are right, Nevada is looking at unprecedented challenges for at least a few more years, if not longer. Consider the potential issues raised by a population decline of more than 100,000:

* The Southern Nevada Water Authority wants to build a multibillion-dollar pipeline to pump groundwater from rural counties. Is this project still justifiable? Apart from the ongoing environmental and cost issues, it might be that Las Vegas simply won't need a new water source for quite a while.

* Las Vegas already has too many hotel rooms for the tourist traffic we are getting. If the 4,000-room Fontainebleu is finished in the next year or two, shouldn't we tear down some other hotel so as not to further exacerbate the Strip room glut?

* If Las Vegas loses population, it's likely that houses across the valley will be vacant. Shouldn't we be consulting with Rust Belt cities such as Detroit, Cleveland and Pittsburgh on what to do about excess housing?

Because of Las Vegas' growth addiction, population stagnation is immediately viewed as a bad thing. But there's another way to look at it, at least if you're not working in the construction trades.

Some progressive voices suggest that a break from growth could be a good thing for us, enabling community leaders to think more clearly about what kind of place we want here.

In the recent past, civic leaders have given mere lip service to important issues such as economic diversification, educational quality and community planning. Counting our fast bucks always took precedence over planning and civic concerns.

Well, now we have all kinds of time to think about the future. With fewer dollars to count, we should be discussing what we want Las Vegas to be when it grows up. Hellbent growth is not the only viable trajectory for a city.

The point is, for better or worse, we're off the roller coaster. And if you're planning to stick around rather than flee for greener pastures, I urge you to take a renewed interest in this community and help us figure out smart, new answers to our critical weaknesses and deficiencies.

Crowded bars and restaurants are a great thing for Las Vegas. But we can't let such anecdotal observations obscure the fact that our problems are big and complex and can't be solved with happy hour specials and a tasty Cuban sandwich.

Geoff Schumacher (gschumacher@reviewjournal.com) is the Review-Journal's director of community publications. His column appears Friday.

 

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