Forecasting Las Vegas’ future, from new roads to pro sports

By Las Vegas Sun Staff (contact)

Monday, Jan. 2, 2017 | 2 a.m.

The new year always invites future-gazing, but after the presidential election and its aftermath, 2017 is especially hard to peg. So we’re focusing on our corner of the world — this valley of more than 2 million souls — and widening the scope to the next five years, and all of the aspirations and conflicts that will take shape.

Economy

Where Las Vegas’ economy goes depends on where the national economy goes and, to a lesser extent, what national policies are in place, says Steve Hill, the top economic development official in Nevada.

“We have a goal to rely more and more on international tourists,” Hill said. “With the new (presidential) administration and potentially different relationships, it matters to us that we continue to be both a welcoming and easy place to come to from all over the world.”

While it’s unlikely that the economy will look substantially different in five years, Hill said you might see growth in sectors like water technology, renewable energy and information technology as the state continues to work toward economic diversity. Those industries just aren’t big enough to change the big picture. The region’s top industries — gaming and hospitality, health care and financial operations — will continue to be.

Hill noted that room rates on the Strip were getting closer to a point that would support investment in new projects. “If that happens over the next year or so, four or five years from now you’re going to see new projects opening and new ones on the board,” Hill said. “That just drives a lot of the economy in Southern Nevada.”

Construction at electric-car company Faraday Future’s factory site in North Las Vegas has stalled, but Hill thinks Faraday will boost manufacturing jobs in the long run. In the short run, he expects the Chinese-backed company to produce a car as quickly as it can on a smaller scale than originally intended and then work toward a full factory.

Then there’s the NFL stadium. If the Raiders come to Las Vegas and a venue is built, Las Vegas would add 1 percent to its tourism volume, Hill said.

But with so many moving parts, he added that anyone trying to predict the near future “ought to add a footnote that says, ‘What the heck do I know?’”

— Megan Messerly

The Strip: Landscape

If the most buzzed-about projects all come together, Las Vegas Boulevard could see tremendous balance by 2022.

On the northern end, Malaysia’s Genting Group expects to push vertical construction of Resorts World early this year, a $4 billion construction project the likes of which Las Vegas hasn’t seen since CityCenter arrived seven years ago. Combine that with Steve Wynn’s Paradise Park attraction and the 600,000-square-foot expansion of the Las Vegas Convention Center into the former Riviera site, and the quiet end of the Strip could suddenly be making the most noise. The future of Alon, the hotel Crown Resorts abandoned, faces uncertainty.

The balance comes if the Oakland Raiders commit to a Las Vegas relocation and a $1.9 billion domed stadium is erected. That project would be a true game changer for the Strip, especially if it ignites an update of public transportation in the tourist corridor. Nearby, the next five years should also see work done at the Tropicana and Excalibur resorts, following in the footsteps of a complete renovation of the Monte Carlo into Park MGM and NoMad, a project that should wrap up in early 2018.

Whatever happens on the north end, the stretch between the Cosmopolitan, Aria, the refreshed Monte Carlo and T-Mobile Arena would likely be the hot spot — still — five years down the boulevard.

— Brock Radke

Education

The undisputed king of education priorities in Nevada for the foreseeable future is the state’s rollout of a new student funding formula. Right now state officials treat a student from a wealthy, white family the same as a poor Hispanic student still learning English, despite overwhelming evidence showing the latter demographic takes more resources to educate.

Nevada education leaders are in the process of figuring out the specifics of the formula, but the real work will fall to legislators this year as they seek more than $1 billion to fund it.

Not far behind is the reorganization of the Clark County School District, the fifth largest in the nation. That’s because the reorganization, which is intended to put more power into the hands of principals and parents, largely depends on the funding formula for staff to be able to budget for their school’s specific needs. It’s a massive undertaking that, in the end, could go either way. If parental involvement in school decision-making is robust, Las Vegas could see a renaissance in an area that has long handicapped schools. But that’s a big if.

Nevada’s Education Savings Account program, while it tends to grab headlines, is more of a political issue than it is an education one. Data show ESAs are most popular with the state’s wealthier residents, despite their tendency to live in neighborhoods near high-performing schools. Because the Nevada Supreme Court ruled in September that the program couldn’t use public education funds, schools won’t be seriously financially handicapped. But the roughly 8,000 families who applied for ESAs will have to find an alternative.

— Ian Whitaker

Housing

Coming off the roller coaster of the recession, the housing market has settled into what most industry analysts classify as “stable.” Conditions are characterized by a relatively healthy balance between supply and demand. Importantly, median home price points are well-aligned with median household incomes, suggesting housing remains relatively affordable.

Expansion of underlying fundamentals in the economy will have the single largest effect on the housing sector in the near- to mid-term. Growth in population and employment supports demand, and the tourism industry — which accounts for one-third of the direct employment — is expected to remain on track, particularly as the convention sector provides more solid footing. The construction industry also is expected to continue its recovery, and an estimated $20 billion in planned activity on major projects should help. Yet land availability and pricing remain concerns for builders, along with increased cost of development, which could constrain affordability for many.

There are fewer foreclosures and homeowners with negative equity, and the mix of resale home transactions is overwhelmingly slanted toward nondistressed activity. While there are some headwinds worthy of consideration, the overall outlook for the Southern Nevada housing market suggests the probability is slim of a repeat of the debacle of the late ’00s. Market expectations point toward more modest price appreciation aligned with income growth. Some slack in the market may bode well for buyers, and sellers should see values generally hold.

— Brian Gordon, principal at Applied Analysis and SalesTraq

Roads

As this metropolitan area has grown, so have its roadways, leading to greater connectivity within the valley — and traffic snarls during construction.

The Nevada Department of Transportation has a list of projects in the queue, and more could be on the way if federal funding appears. Here’s a look at what’s on deck:

• Project Neon will culminate in a high-occupancy vehicle (HOV) flyover bridge from southbound U.S. 95 to southbound Interstate 15. The project also will convert two existing express lanes on I-15 into a general purpose and HOV lane, creating 22 miles of carpool lanes between I-15 and U.S. 95.

• Construction will continue on the Centennial Bowl, connecting U.S. 95 and the 215 Beltway in the northwest valley. Some parts opened in 2016, and work is expected to finish in 2020.

• NDOT hopes to break ground in spring on an interchange project at I-15 and Starr Avenue in the south valley. It will provide new access to the highway and both sides of the valley for residents in Southern Highlands and neighborhoods east of Las Vegas Boulevard.

• The interchange at I-15 and Tropicana Avenue will be transformed sometime after 2020 into a tight diamond configuration with better access to and from the highway.

• With more activity expected at Apex Industrial Park in North Las Vegas in coming years, NDOT plans to make improvements to U.S. 93. The plan calls for widening it to two lanes in each direction for 5 miles. The project is expected to break ground in June.

• A 6-mile stretch of State Route 160, which connects Las Vegas to Pahrump, is slated to be widened from two to four lanes starting in 2018.

— Jackie Valley

Yucca Mountain

“There may be a serious attempt, but it won’t happen,” U.S. Sen. Harry Reid said during his last week in the Capitol.

As the Democratic leader in the Senate, Reid worked with the White House to starve the Yucca Mountain project of funding, effectively killing plans to store more than 70,000 metric tons of radioactive waste in Nye County. But Reid’s retirement means the next five years could see its revival.

Five of the six members of Nevada’s congressional delegation have pledged to defeat Yucca. (Republican Rep. Mark Amodei is against it in its current form but open to discussion.) Opponents worry about the safety of transporting nuclear waste across the country, and about how storing it at Yucca would negatively affect Southern Nevada’s economy by slowing population growth and damaging tourism. Proponents point to evidence of the project’s safety and have insisted Yucca is the best location for the country’s waste.

Reviving the project would be time-consuming and costly. So even if talks began today, don’t expect Yucca Mountain to be open in five years.

— Megan Messerly

Downtown Las Vegas

It has been five years since Tony Hsieh said he would spend $350 million to fund the creation of Downtown Project. DTP has transformed East Fremont from the crime-plagued border of the Fremont Street Experience into a thriving corridor of unique bars and lounges, eateries and shops.

Still, Hsieh plans on switching gears over the next five.

“One of the challenges we recognized early on was the chicken-and-egg problem of deciding whether to first invest in small businesses such as restaurants and bars or to first invest in building residential,” Hsieh said. “We chose to do the former in the early years and are now focusing more on the latter.”

DTP is working on Fremont9, a 231-unit luxury complex opening this year, and also will transform the run-down Ferguson Motel into an enclave of outdoor retail and taverns. “It’s hard to predict exactly how things will look five years from now,” Hsieh said, “but I’m excited about the momentum in helping make downtown Las Vegas a place of inspiration, entrepreneurial energy, creativity, innovation, upward mobility and discovery.”

— Jesse Granger

Population

Las Vegas’ major growth spurt may be over, but its population continues to inch up.

Clark County’s total population hit 2,141,655 this year and is expected to increase by roughly 1 percent in the next few years. That means an additional 25,000 to 28,000 people will settle in each year, boosting the total population to 2.2 million by the end of 2019, according to projections from state demographer Jeff Hardcastle.

Where are all these people coming from?

The bulk are from Southern California counties — Los Angeles, San Diego, Orange and San Bernardino — or Maricopa County in Arizona, which includes Phoenix, Hardcastle said. Those places also are where people tend to go if they leave the Las Vegas area. Generally, he said, the ebb and flow boils down to proximity and job opportunity.

So don’t just assume vehicles with California and Arizona plates are tourists here for a good time. They may be your new neighbors.

— Jackie Valley

Water

During the summer of 2016, as was the case the previous summer, Lake Mead water levels dropped to new historic lows, creating a larger bathtub ring around the reservoir and more frightening imagery of water scarcity in the West. The states that rely on the lake — Arizona, California and Nevada — escaped cuts for 2017, but water officials expect that the first-ever supply cuts will be scheduled for 2018.

The Southern Nevada Water Authority has long planned for a leaner resource. Not only are officials confident about their position for the next five years, when the effects of cuts are expected to be small, they see Las Vegas meeting demand for the next half-century, even as population increases and more reductions are mandated.

Such positioning, which could require tapping into new resources, requires some political navigation. Northern Nevada water groups have criticized the SNWA’s plan to build a $3.2 billion pipeline to transport groundwater. The water authority also is looking to partner with Mexico for a greater Lake Mead share.

— Daniel Rothberg

Technology

In late 2013, the Federal Aviation Administration named Nevada one of its six test sites for development of autonomous aircraft. Operations were slow at first but have continued to expand as state officials look for opportunities to test large drones. The Governor’s Office of Economic Development has enticed companies to the state by granting opportunities for testing. These range from big players like Microsoft to newer drone-specific startups, and such development is likely to continue.

When it comes to manufacturing technology, the outlook is less clear. It was international news this year when Faraday Future, an electric car startup backed by Chinese billionaire Jia Yueting, broke ground on a $1 billion factory in North Las Vegas. But it was news again when the company confirmed in October that it had fallen behind on its construction payments. While construction is expected to restart in the next year, the lapse deepened concerns that the firm might not come through with ambitious plans to compete with legacy car manufacturers — who also are investing in electric cars — and newcomers like Tesla that already have brought vehicles to market. Faraday could give more details in January when it unveils its first production vehicle at CES.

Once thought of as the more quixotic of the two anchors of Apex Industrial Park, Hyperloop One has raised nearly $100 million to build a test loop for its technology, which would transport passengers or cargo in high-speed pods down enclosed tubes. It did a preliminary test of its concept last year, and just announced an agreement with Dubai to explore building its first hyperloop transportation system in the Middle East. But as with Faraday, it still has many milestones to meet and challenges to overcome. Most importantly, Hyperloop One must prove its technology works and is not as impractical or far-fetched as critics contend.

— Daniel Rothberg

The Strip: Tourists

Las Vegas often bills itself as the Entertainment Capital of the World, and in five years that will ring truer than ever.

Kevin Bagger, executive director of the research center for the Las Vegas Convention and Visitors Authority, expects a swell in the masses flying into Las Vegas from around the world. “Currently, 16 percent of our visitors are international,” Bagger said. “We have a stretch goal of getting it up to 30 percent, and I don’t know if we’ll be there in five years, but we will be well on our way.”

Bagger expects numbers to spike with the recent launch of Las Vegas’ first nonstop flight to and from mainland China.

He added that the U.S. government had a stated goal of being the destination for 100 million visitors annually by 2021, and Las Vegas was in line with that objective. However, the gaming machines these international tourists sit down at when they arrive at Las Vegas casinos may be slightly different in 2022.

“E-sports is a new phenomenon, and it will be interesting to see how that plays out,” Bagger said. “The younger crowd seems far more interested in skill-based games.”

While Las Vegas has clearly funneled some attention and investment from gaming into nightclubs, pools and entertainment, Bagger says gambling isn’t going anywhere. “The investment by casinos in nongaming is a decadeslong project,” Bagger said. “But at the same time, gaming is still a key experience of Las Vegas.”

— Jesse Granger

Gaming

What are the trends that will shape the gaming industry’s next phase? Financial information firm Fitch Ratings shared these insights:

Poorer people are staying poorer: Low-income earners aren’t seeing their income grow as much as they did in decades past. Fitch blames this trend for “lackluster gaming demand.”

Low interest rates mean seniors have less money: Fitch quotes a study that found interest from investments makes up at least 5 percent of income for people 65 and older — otherwise known as slot players.

Smartphones are a threat: Fitch sees an overlap between customers for casinos and the people who play social casino games on smartphones and tablets. Social games could be, Fitch says, “a substitute for casino gaming.”

Lotteries could draw customers away from casinos: Nevada’s constitution explicitly forbids a state lottery. But across the U.S., lotteries are increasingly attractive to gamblers. “On a very basic level, instant ticket games from lotteries much more closely resemble gambling,” said Alex Bumazhny of Fitch. “Steadily, lotteries are becoming increasingly more casino-gambling like. Some states like Michigan have online scratch-off tickets that look just like a slot.”

Slots will slowly lose ground to table games: Fitch says slots’ percentage of gross gaming revenue will decline nationally to 75 percent by 2030 from approximately 85 percent today.

— Thomas Moore

The Strip: Entertainment

Thanks to an outbreak of closed shows, from “Jersey Boys” and “ShowStoppers” to “Rock of Ages,” concern about the future of the traditional Las Vegas production has bubbled up. But Strip entertainment is more cyclical than unpredictable, and already we’ve seen hints of its next evolution through niche hits such as “Absinthe” and the bold, music-oriented direction of Cirque du Soleil’s “The Beatles Love” and “Michael Jackson One.” Today’s visitor craves a more diverse entertainment experience, which is why the tailor-made concert production from resident artists like Britney Spears at Planet Hollywood’s Axis or Bruno Mars at the Park Theater is the defining trend of the current era. And more top talent is coming.

“We’ll continue to have the opportunity to create these shows you can’t see anywhere else because the venues are so well-designed and bring so many technical, creative elements,” said John Nelson, senior vice president at AEG Las Vegas, which started the trend with Celine Dion at the Colosseum at Caesars Palace.

The megaconcert won’t be the only big draw; live music will continue to power other changes in the entertainment scene in nightclubs and smaller-scale productions. With the news that Rock in Rio won’t return to the Strip in 2017 (though MGM entertainment exec Chris Baldizan says it could be back later), it seems like the international music festival craze will have difficulty finding its footing in Las Vegas, with the exception of the utterly dominant Electric Daisy Carnival at the Las Vegas Motor Speedway. “People have so many other distractions when they’re in Vegas,” Nelson said. “It’s almost as if the festival model requires too much of their time.”

— Brock Radke

Pro sports

In five years, don’t be surprised if the NHL’s Vegas Golden Knights and the NFL’s Las Vegas Raiders are joined by a third professional sports league, the NBA. This isn’t some bold prediction. It has legs.

Seattle and Las Vegas could be added together as expansion teams to bring the NBA to 32 members. The league would shift New Orleans or Memphis to the Eastern Conference to accommodate two West Coast additions and have a pair of 16-team conferences.

Seattle lost its franchise to Oklahoma City in 2008 because Key Arena was outdated, but an investment group is in advanced talks to construct a new facility. Seattle should first get an expansion hockey team — the NHL planned to expand by two franchises, but took only Las Vegas as it presumably waited for Seattle to build.

NBA Commissioner Adam Silver has previously met with Las Vegas Mayor Carolyn Goodman and, unlike other league commissioners, has always been receptive to Las Vegas as a viable option. But first, the city needs to prove it’s big-league. If it supports the Golden Knights with sellout games and merchandise purchases, it will signal to the NBA that the city is ready.

— Ray Brewer

Will you want to live here in five years?

Yes, because it’s pretty certain that the quality of life will improve on important fronts.

Las Vegas City Manager Betsy Fretwell anticipates a remodeled, friendlier downtown, thanks to a 30-year general plan that was adopted in June, providing guidelines to make urban neighborhoods more livable.

Within five years, Las Vegans can expect a downtown distinguished by urban trails and peppered with shade trees and, thanks to speedy advances in driverless cars, less traffic. In fact, many Las Vegans will begin shedding their shackles to vehicles — freeing up their garages and dollars spent on gas and insurance, and turning to a commercial network of autonomous shuttles. Live next to a parking structure? Lucky you, because with fewer cars on the road, parking facilities may give way to urban parks. (Government will mourn the loss of revenue from traffic fines; emergency rooms won’t be as crowded with accident victims; and young people will want to avoid careers in car insurance and collision repair.)

The quality of schools will depend on how a dramatic, upending reorganization of the Clark County School District plays out. But the notion that each school will set a curriculum and budgeting priorities based on its neighborhood needs and the input of parents, staff and faculty, suggests a responsiveness to student needs not yet possible.

Southern Nevada will continue to grapple with other civic needs. Clark County Commissioner Larry Brown worries about public safety and says governments must find a way to sustain sufficient funding for courts, police and fire departments. Former Clark County Manager Thom Reilly, now a consultant on government and urban affairs, challenges politicians and bureaucrats serving Southern Nevada to work in selfless concert to address our shared needs. And Gard Jameson, a hands-on philosopher who is steeped in various community-level efforts, worries that with nearly 10 percent of adolescents attempting suicide and with life expectancy for local black women among the lowest in the nation, gaps in social services seriously need to be addressed, perhaps under the guidance of UNLV and the United Way.

What do future leaders worry about? At the recent Las Vegas Sun Youth Forum, one group of high school seniors and juniors spoke as one voice in pleading for more resources to fight drug abuse and sex trafficking. The future of their Las Vegas, these teens said, will be defined by how well we care for one another.

— Tom Gorman