Vegas takes a gamble
As the US economy stumbles, its ritzy gambling capital is loading the dice for growth, Martin Kelly reports
ON New Year’s Eve, former Sydney ballet dancer Anna Houssels found herself at what felt like the top of the world in Las Vegas, watching the midnight fireworks while hundreds of thousands of people packed The Strip.
Standing in a luxurious suite at the Bellagio Hotel, surrounded by powerful locals and wealthy outsiders, Houssels, now the vice- president of VIP residential sales at the $ US8 billion ($ 8.6 billion) CityCentre project, knew she was in the right place at the right time. There’s nothing like Vegas,’’ she says.
And right now the famous city of dreams — where the population has quadrupled to more than two million in the past 20 years — is witnessing one of the biggest gambles in its long and richly chequered history.
A rich cast of characters is pumping billions of dollars into the redevelopment of Las Vegas Boulevard — aka The Strip — just as the US economy begins to stumble.
They include America’s thirdrichest man, billionaire Sheldon Adelson, who has just opened the 3000- room, 50- storey Palazzo ResortHotel- Casino, the first new hotel on The Strip in three years.
Adelson, the major shareholder in publicly- listed Las Vegas Sands Corporation, shrugged off suggestions that the Palazzo would struggle.
He said: We’re going to customers from other hotels.’’
Also playing a starring role is Las Vegas legend Steve Wynn. Adelsen and Wynn, the only Las Vegas operators who won concessions in Macau, used to be friendly rivals but those days are long gone. Regular disputes, often petty, now characterise their relationship. Wynn is building Encore, the second tower of Wynn Las Vegas, a $ US1.4 billion hotel and casino with 2000 rooms that is due to open later this year.
Donald Trump is also along for the ride, building Trump International Hotel and Towers, while Palms Place, a 50- storey condominium hotel and spa tower’’, is scheduled for a 2008 opening.
And this is just the beginning, according to the Las Vegas Convention and Visitors Authority, which estimates that there is more than $ US40 billion in development either planned or under way.
It says that if everything goes according to plan, there will be an extra 40,000 new hotel rooms and thou-
take sands more luxury apartments in Las Vegas by 2010.
LVCVA spokeswoman Erika Pope, in a typical display of Las Vegas optimism, believes the city can handle the capacity increase.
She cites the 2007 average hotel occupancy rate of more than 90 per cent which has meant that tourists — more than three million visit Las Vegas every month — are often unable to find rooms.
Pope adds that people have been predicting the demise of Las Vegas since 1955, when Life magazine ran a cover story asking: Las Vegas — Has the Boom Over Extended?’’
Not yet,’’ is her answer. Whatever happens, the immediate outcome of all the building activity is chaos.
The Las Vegas Strip is a jumbled visage of cranes, traffic, people and neon; posters, screens, screams, fountains, gawkers, touts, tourists; a pyramid, a roller coaster, an imitation Statue of Liberty and a fake Eiffel Tower. Touts wear T- shirts promising Girls to your room in 20 minutes’’ while young tourists chug margaritas from yard glasses and make their way to the next casino, where they can light a cigarette without rebuke and party the night away.
Working at the centre of this frenzy is Houssels.
As vice- president of VIP Sales at CityCentre, the biggest of all the Las Vegas developments, her job is to travel the world and encourage wealthy clients to invest in the massive project, described as an urban metro- polis’’. The 30ha, $ US8 billion development includes a 4000- room hotelcasino, two 400- room boutique hotels ( one of them a Mandarin Oriental), 2650 apartments and 140,000sq m of shopping, dining and entertainment space.
There are 5600 workers and 25 cranes on site with development proceeding at a helter- skelter rate and completion scheduled for the end of 2009.
Houssels says apartment sales remain strong, despite increasing evidence of a slowing local economy.
New housing permits have dropped 90 per cent, year on year, in Las Vegas, while new home sales are down 55 per cent and average new home prices are down 17 per cent to $ US280,000.
By contrast, apartments at Citycentre start at more than $ US500,000, with many selling for well over $ US1 million.
Houssels says more than 1600 properties have sold off- plan in the past year, many to international buyers from Europe, the Middle East and Asia.
Houssels has been selling real estate in the US for almost 10 years — a major departure from her career as a senior principal dancer with the Australian Ballet, which she joined at the age of 16.
She headed to Los Angeles with thoughts of an acting career, landing with a suitcase just thinking I could redo Fame — I was ready for excitement but didn’t realise how Hollywood ticks’’.
Within two years the acting dream had faded and Houssels had obtained a California real estate licence.
I sold in San Francisco, San Diego and ended up in Vegas. It was always high- end and high- rise.’’
She had her own apartment brokerage in Las Vegas before taking on her role at CityCentre, which is being developed by MGM Mirage, the biggest hotel casino operator in Las Vegas.
Las Vegas is a very unique place,’’ she says. But senior MGM Mirage management admit that, despite what many people think, it is still part of the real world.
The notion that Las Vegas is immune from these downturns in the economy is completely false,’’ MGM Mirage senior vice- president Alan Feldman told the Las Vegas Review Journal .
We may be better able to withstand it than other marketplaces but we’re not immune from it.’’
On top of the world: Anna Houssels, above, with a model of the $ US8 billion CityCentre project, which is now a hive of building activity, left