Report: As Houston reinvented itself, so can Las Vegas

By Dave Berns

Sunday, Nov. 20, 2011 | 2 a.m.

Las Vegas business and political leaders reeling from the globalization of the gaming industry and the expanding power of gaming operations in Macau and Singapore should turn to Houston for lessons to successfully rebuild a troubled regional economy, says a newly released report from a UNLV professor and graduate student.

The south Texas city reinvented itself as the global command center for the international energy industry after a dramatic decline in domestic energy production during the 1970s, said UNLV professor Bo Bernhard, executive director of the UNLV International Gaming Institute, and hotel college graduate student Mikael Ahlgren.

“Critics feared that the city was tapped out — literally and figuratively — and that it faced a future that looked similar to so many other cities that had thrived in an industrial age, but then died when post-industrial forces took over,” the authors wrote. “At this stage, however, Houston’s companies made a series of smart (and what we would now call ‘sustainable’) moves. Crucially, they began to search internationally for new business opportunities. During a time when oil averaged $30 a barrel for 15 years, Houston got more efficient, survived, and then found itself well positioned to grow once again when the market turned. How did Houston manage to change course, and during a period when it seemed that the entire town might fold ’em? Can Las Vegas follow this transformative path — indeed, is Las Vegas quietly following this very same path?”

Bernhard and Ahlgren offer a series of suggestions to transform the Southern Nevada economy. Among them, Las Vegas must enhance its appeal to talented individuals, a problem in a city that in recent years has found a number of top casino industry executives — Caesars Entertainment CEO Gary Loveman, among them — commuting from homes in other cities to work here.

“The energy industry in Houston has invested large sums of money in cultural projects, with the goal of making the city appealing to the talent the industry wishes to capture,” the report said.

The scheduled 2012 opening of the Smith Center for the Performing Arts and the 20-month-old Cleveland Clinic Lou Ruvo Center for Brain Health contribute to Southern Nevada’s livability, the authors note. They quote Zappos CEO Tony Hsieh to support other quality-of-life improvements.

“To get the kinds of people and businesses here to make it happen, you’re not going to do that with just the Strip,” said Hsieh, who is moving his corporate headquarters to downtown Las Vegas. “If that’s all Vegas offers, they won’t come here.”

Las Vegas, like Houston, must be a regular stop for international executives hoping to gain the operational experience they fail to develop at overseas gaming properties. McCarran International Airport must seek a greater number of direct flights to Asia, Central and South America to foster such relationships.

“To facilitate these kinds of cross-national, cross-pollination processes, Las Vegas should pursue honorary consuls, which are relatively easy to set up and can foster a strong social and legal support system for ex-pats,” the report said. “Once more, the model here is in Houston, where consulate offices were originally established because of the oil industry, but ultimately benefitted other sectors as well. In Las Vegas, it might be possible to encourage honorary consuls to help with visas and other domestic challenges that might emerge between countries that wish to share resources.”

The authors note that technology company Switch’s high-speed data processing facility on East Sahara Avenue provides the infrastructure for what many believe is the eventual legalization of online wagering.

“If Las Vegas’ gaming companies are able to leverage their political muscle in Washington, D.C., and then leverage the infrastructural advantage that is the mega-computer in their backyard,” reads the report, “the city just might catapult itself into a future when gambling is not only consumed on-site in billion-dollar gambling cathedrals, but also on one’s person in the form of the smartphone or laptop.”

Finally, they note, as Texas universities have become centers of research and training for the oil and energy industry, UNLV’s global role could be elevated within the expanding casino industry.