Las Vegas Construction Boom Continues
Las Vegas' population explosion, robust economy and job growth are fueling an unprecedented building boom, with nearly $9 billion worth of construction projects planned in 2007-08. Construction is Nevada's second-largest and fastest-growing employer, trailing only gaming and hospitality, reports the state Department of Employment, Training and Rehabilitation.
The industry is now responsible for nearly 150,000 jobs statewide — about 11 percent of the state's total work force — contributing $5.1 billion annually in wage and salaries, while generating $14.7 billion worth of economic activity.
More Resorts on the Strip
The Vegas Strip is leading the charge with $35.46 billion worth of projects planned through 2010, reports the Las Vegas Convention & Visitors Authority. Construction plans will add 42,092 more hotel rooms, 2,562 timeshare units and 3.49 million square feet of convention space. Another $13 billion in tentative projects could also build 36,703 hotel rooms and 7,088 timeshare units.
MGM Mirage is building the biggest of the big: the $7.4-billion, 18.67-million-square-foot Project CityCenter is located on the Strip between Bellagio and Monte Carlo resorts. The 76-acre, seven-building mixed-use complex consists of residences, hotels, casinos, and entertainment space. It's the largest privately financed project in U.S. history, project officials claim. Phoenix-based Perini Building Co. is the general contractor, with Tishman Construction Corp., New York, as construction manager and San Francisco-based Gensler as master architect.
Project CityCenter will debut in November 2009 next to the $3-billion, 6.9-million-square-foot Cosmopolitan Resort Casino, which is under construction next door at Harmon Avenue and the Strip. Perini, once again, is the project's general contractor. Cosmopolitan consists of two 600-foot-tall cast-in-place concrete-and-glass towers with a three-level 265,000-square-foot retail center; a 150,000-square-foot convention center; 80,000-square-foot casino; and a five-level, 3,800-space parking garage. Developed by Ian Bruce Eichner of New York City, the 2,998-room condo-hotel property is also scheduled to open in 2009.
"Our revenues are up significantly and we're looking at a double-digit growth in the Las Vegas market for 2007-08 based our current backlog," says Dick Rizzo, Perini vice chairman. "We're just now starting to book work for early 2009."
The firm is additionally building the $600-million, 64-story Trump International Hotel & Tower on the Strip, across from Fashion Show Mall. The 1.5-million-square-foot, 1,282-unit condo-hotel high-rise is scheduled to finish in February 2008. Perini has already committed to building a second identical $700-million, 1,282-unit tower next year. Perini Corp., its parent company, had an $8.6-billion backlog of uncompleted work in the first quarter, with approximately $580 million in the Las Vegas hospitality and gaming market.
Boyd Gaming, however, isn't one to be outdone. The firm is currently developing the $4.8-billion, 87-acre Echelon at the former site of the Stardust hotel-casino. The mixed-use development calls for five hotel towers with a combined 5,000 rooms. Morgans Hotel Group, owner of the Hard Rock, is building the Delano and Mondrian hotels for 1,600 rooms. Hong Kong-based Shangri-La Hotels and Resorts will construct a 353-room hotel, and Boyd will build two hotels itself — Hotel Echelon and the Suites at Echelon.
The eight-building project, which has 22 acres reserved for future development, will have a 750,000-square-foot convention center and a 140,000-square-foot casino. There's also a $500-million, 300,000-square-foot shopping center jointly developed with Chicago-based General Growth Properties, the firm responsible for the Fashion Show Mall. Echelon additionally boasts 4,000-seat and 1,500-seat theaters operated by AEG Live, Los Angeles, plus 9,000 parking spaces and 30 dining and entertainment venues. Echelon will be constructed with a series of low-bid individual projects. Tishman Construction Corp. is the construction manager.
"Boyd has made the project attractive to contractors with strong financial backing and history of timely payments," says Daniel Tishman, company chairman and CEO. "This is a design-buy-build project."
Echelon, despite its impressive bulk, is neatly bundled into an elegant, upscale environment that's sure to generate heavy buzz when its debuts in the third quarter of 2010.
But Boyd has plenty of company on the Strip, with numerous other projects under way, including Steve Wynn's $2.1-billion, 60-story Encore at Wynn Las Vegas. Tutor-Saliba Corp. of Sylmar, Calif., is the general contractor for the 20-acre, 2,032-room addition scheduled to finish in early 2009. Las Vegas Sands Corp. is building the new $2.6-billion, 50-story Palazzo hotel-casino, just south of Wynn Las Vegas. Taylor International Corp. of Las Vegas is the contractor for the 3,025-room megaresort which will open later this year. In February, Turnberry West Construction broke ground on the $2.9-billion, 3,889-room Fontainebleau Las Vegas at the 25-acre former site of the El Rancho hotel-casino. The 63-story tower will have a 100,000-square-foot casino, 60,000-square-foot spa and a 3,200-seat theater. Developed by Fontainebleau Resorts LLC, the new Strip megaresort will finish in the fall of 2009. In July, Caesars Palace announced a $1-billion upgrade consisting of a 23-story, 665-room hotel tower addition; a 263,000-square-foot convention center; and a new front entrance and main casino lobby. Marnell Corrao Associates, Las Vegas, and Keating Building Corp., Philadelphia, are the joint-venture general contractor. The project is scheduled to finish in early 2009.
"There seems to be as much opportunity as ever," says Robert Potter, president of the Associated General Contractors, Las Vegas chapter. His company, Affordable Concepts, Las Vegas, will do about 30 public and private projects this year for about $54.5 million in revenue.
Affordable Concepts and others are staying busy downtown, which, like the Strip, is a hotbed of construction activity with projects like the $3-billion, 12-million-square-foot World Market Center at Grand Central Parkway and Bonneville Avenue. Developed by World Market Center LLC and the Related Cos., New York, the 57-acre home furnishings design complex will have eight steel-framed, glass and metal paneled buildings between 10 to 16 stories tall. Penta Building Group, Las Vegas, is now at work on the third and largest building — a 16-story, 2.1-million-square-foot structure. The $550-million addition is scheduled to finish in June 2008.
Developer Sam Cherry's $93-million, 168-unit Newport Lofts is also nearing completion in downtown at Casino Center Drive and Hoover Avenue. Breslin Builders of Las Vegas is the contractor. Nearby, CityMark Development is building the $167-million, 330-unit Juhl at 255 E. Bonneville Avenue. New York-based Turner Construction Co. is the general contractor for the six-building, 2.38-acre residential complex, which is anticipated to finish in April 2008.
The luxury condo and condo-hotel high-rise market is helping keep local constructors busy with 69 projects, totaling 45,616 units, planned in the first quarter, reports Restrepo Consulting Group, a Las Vegas-based economic research firm. While there have been some well publicized cancellations, many other developments are still moving forward.
"There should be sufficient demand to absorb the 6,616 units in the 14 projects that have gone vertical and the 24,809 units that are proposed or haven broken ground," says John Restrepo, company principal. "Many of the projects that have gone vertical are located along the resort and Harmon corridors."
The Palms hotel-casino, for example, is building the $600-million, 50-story Palms Place at Flamingo Road and Arville Street, just west of the Strip. M.J. Dean Construction, Las Vegas, is the contractor for 599-unit residential skyscraper that's scheduled to finish in December. New York City-based Bovis Lend Lease will complete the $195-million, 41-story "Allure Las Vegas" on Sahara Avenue, also just west of the Strip, in September. The 428-unit residential skyscraper is being developed by Chicago-based Fifield Cos.
The South Strip, meanwhile, is a beehive of construction activity, with the new $450-million, 756-unit Boca Raton at Serene Avenue and Las Vegas Boulevard. Martin-Harris is the general contractor for the 15-acre, seven-building mid-rise condo complex. The contractor is also building the $93-million second phase of Tahiti Village, a 27-acre timeshare development, across the street at 7200 S. Las Vegas Blvd. The project calls for a 10-story, 568-unit third tower and a seven-story parking garage with 1,016 spaces. Further south, AmLand Development/B.S.R.'s $600-million, 960-unit One Las Vegas is taking shape at Shelborne Avenue and Las Vegas Boulevard South. Kansas City, Mo.-based J.E. Dunn Construction Co. is the contractor for the 19.5-acre, five-tower condo complex scheduled to open in early 2008.
Office, Industrial, Retail
"There still seems to be steady growth in office, industrial and retail," says Brooks Williams, president of Brooks Corp., a Las Vegas general contractor. "People continue to move here, which continues to drive construction."
Southern Nevada had 8.5 million square feet of office development in the second quarter, a 51.7-percent improvement from a year ago, while retail had 14.1 million square feet of projects under construction for a 51.2-percent gain over 2006, reports Applied Analysis and Urban Environmental Research.
Southern Nevada also has several sizeable mixed-use commercial projects under way, like the $750-million, 117-acre Town Square at Sunset Road and Las Vegas Boulevard, South. The project, by Centra Properties and Turnberry Ltd., will consist of 150 shops, 12 restaurants, a 20-screen movie theater, and 350,000 square feet of office space. The Las Vegas Chamber of Commerce recently signed a 10-year lease to occupy 35,000 square feet inside Town Square. The 1.57-million-square-foot development, which includes Frye's Electronics Superstore, is scheduled to open in November.
Others are applying a similar strategy by combining retail, office and industrial space. EJM Development Co.'s 450-acre, 5-million-square-foot The Arroyo, which is located along the north and south sides of the I-215 Beltway between Rainbow Boulevard and Buffalo Drive. The complex calls for a total of 1.5 million square feet of industrial space, 1.8 million square feet of retail shops and 1.7 million square feet of office space. The mixed-use development is scheduled to reach build-out by 2015.
EJM is currently finishing work on The Arroyo Corporate Center — a 12-building, 1.25-million-square-foot complex that's expected to open in January 2008. It will be located directly across from the 950,000-square-foot Arroyo Market Square — a 90-acre joint-venture project between EJM and Laurich Properties, and featuring three anchor tenants — Wal-Mart, Sam's Club and Home Depot — plus 20 junior anchors, including Best Buy, Home Depot, OfficeMax, Marshall's, PetSmart, Sports Chalet, and others. Arroyo Market Square is scheduled to open in the fourth quarter.
Big things apparently come in pairs. Thomas & Mack Development Group and Majestic Realty Co. are building the 400-acre Beltway Business Park directly across from The Arroyo. The Beltway Business Park will eventually contain 55 buildings, totaling 5.86 million square feet of industrial space that will make up 54.6 percent of the completed project, with 3.19 million square feet in 14 buildings; office space will account for 33.2 percent; technology will take up 7.8 percent; and retail space will comprise 4.4 percent, with 12 buildings combining for 260,500 square feet. The Beltway Business Park is estimated to reach build-out in 2012.
"We're developing different product types to meet a variety of business needs," said Rick Myers, Thomas & Mack's executive vice president. "We are continuing to see strong and diverse economic growth fueling demand for office, retail and industrial space in Southern Nevada."
With its rapid population growth and tremendous number of visitors, the Las Vegas area is always expanding its highway network. Most recently, the Nevada Department of Transportation awarded its first ever design-build contract to widen the first 5.5 miles of Interstate 15 from the Spaghetti Bowl interchange of I-15/I-515/US-95 on the north side of downtown Las Vegas out to Craig Road in North Las Vegas. Eventually, the widening will progress another 10 miles to Apex. North Corridor Constructors LLC, a joint venture of CH2M Hill of Englewood, Colo., and Las Vegas Paving Corp., won the $242-million contract and will begin work next spring, completing the project in 2010. The work will widen I-15 from six to 10 lanes from the Spaghetti Bowl north to Lake Mead Boulevard, and from four and five lanes to eight lanes on north to Craig Road. The Lake Mead Boulevard will also be reconfigured.