Expert: LV-area economy to keep growing

The Las Vegas economy flourished when Clark County's population hit 1 million. Experts predict more of the same as the county nears the 1.5 million and 2 million plateaus.

Robert Mulhern, senior managing director of the real estate brokerage CB Richard Ellis, Phoenix, says experts project Clark County to reach 2 million in population by 2007.

A marketing professor at UNLV told a gathering of about 300 clients of CB Richard Ellis on Thursday that eight factors are at work that should contribute to a robust local economy even while critics are fretting about overbuilding.

Jack Schibrowsky, who chairs the marketing department in UNLV's College of Business, spoke at CB Richard Ellis' Millenium Market Watch '99 program.

Population levels of 1.5 million and 2 million are important, Schibrowsky said, because retailers often make decisions about locating stores in an area based on those totals. The 1.5 million level, which should be reached sometime early in the millennium, bolsters confidence in companies that set 1 million as a standard -- but chose to wait for awhile to make sure Las Vegas wasn't a boom town prime to go bust.

Other companies make building decisions based on a 2 million threshold, he said.

Schibrowsky explained the key growth factors:

Las Vegas is one of the top entrepreneurial centers of the nation. With endorsements from Inc. and Entrepreneur magazines, Las Vegas continues to draw young, talented companies.

"We have no incubators or research parks," Schibrowsky said. "Yet the entrepreneurs keep coming here."

And because those entrepreneurs and their families keep following the expected service industry growth that comes with new hotels, the population keeps inching up. At 1.5 million, Schibrowsky said the city would have enough to draw professional sports teams as well as the timid retailers.

Henderson has arrived and that will help Las Vegas. It's now the second largest city in the state with a population of about 166,000, Schibrowsky said. Reno is at about 165,000 -- but is growing at a rate of 0.8 percent per year compared with Henderson's 7 percent per year. Henderson also wants to be home to a new state university, a sign that it hopes to bolster its educational resources.

Schibrowsky added that North Las Vegas may be growing at an even faster rate and currently has the most aggressive and progressive municipal government in the valley.

Senior citizens are having a positive impact on the valley. Schibrowsky said they come because they enjoy the quality of life and no personal income tax and they like the political clout they hold with local politicians.

The result of a flourishing senior citizen population is that more retail springs up to serve a demographic that doesn't like to travel very far for basic services. In addition, a greater number of medical retailers are likely to establish operations in the area.

The steady increase in the number of hotel rooms to fill.

"Don't undersell the leaders of Las Vegas," Schibrowsky said. "They will find a way to fill all the hotel rooms they are building."

Schibrowsky cited the well-documented transformation of Las Vegas from a gambling mecca to a full-service resort. The hotel rooms won't be filled with gamblers, but with a wide variety of guests, from conventioneers to sports enthusiasts who enjoy golf and racing sports cars.

The maturing of the university. UNLV has established a gaming institute, an architectural school and a law school. It is developing an Executive Masters of Business Administration degree program in addition to its regular MBA program.

Culturally, it has outstanding venues at the Thomas & Mack Center, Sam Boyd Stadium and several performance halls.

The emergence of the beltway. The city took a major step forward when Interstate 215 opened west to Decatur Boulevard, Schibrowsky said. For the first time, the southwest part of the city had a transportation link and it joined Green Valley to the southwest.

As more links to the freeway are opened, more isolated areas are becoming a part of the community. Not only will transportation in the valley be forever changed, Schibrowsky said, but the beltway will open a whole new set of commercial possibilities.

Outlying areas are experiencing healthy growth as well. Mesquite and Pahrump are flourishing. Primm will get a big boost if a commercial airport is built south of Jean. And, the Nevada Test Site could become home to a commercial satellite launching facility someday, Schibrowsky said.

The valley is becoming more culturally diverse. As Hispanic, black and Asian communities grow in Las Vegas, so does the area's diversity. In some respects, the senior population also represents a cultural expansion, he said.

Mulhern said earlier that the Baby Boomers are tomorrow's senior citizens and they're bringing a vast amount of discretionary income to the nation's sunbelt regions, including Phoenix and Las Vegas.

And what problems does Schibrowsky see for the valley? He had relatively simplistic answers to some of the most serious concerns:

On water: "I'm like Bruce Babbitt in that I think water doesn't flow downstream, it flows towards money," Schibrowsky said. He said if water becomes a problem, he wouldn't be surprised if Nevadans invested in a pipeline to move water from the Northwest's Columbia River to Southern Nevada.

On air: Yes, the city's brown cloud is a serious problem. But Schibrowsky sees it as an opportunity for some of those entrepreneurs moving to Las Vegas to solve.

On traffic: The traffic problems the city experiences could actually spur the construction of new neighborhood shopping centers, he said, because most people will demand centers that are close to home rather than drive on freeways to get to the ones that are farther away.

Schibrowsky uses the same analysis to determine that the growth of Internet commerce could actually increase the number of retailers that build here. He reasons that retailers will fight back with close-to-the-home outlets to combat the convenience of in-the-home e-commerce.

On other infrastructure needs: The gradual increase in population will force the city to deal quickly with transportation and education needs.

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