Another one bites the dust…
A major Las Vegas construction project was halted last week. The $4.8 billion Echelon Place development on the Las Vegas strip had been hailed as a sign that the city will survive the current economic woes. Construction on the 87 acre project began in June 2007. The developer, Boyd Gaming Inc., expects the construction to be halted for up to a year.
The project includes four hotels totalling almost 5,000 rooms. The plans also call for a 300,000 square foor shopping venue, 750,000 square foot convention center, 140,000 square foot casino, 4,000 seat theater and approximately 30 restaurants and bars. It was a major piece in the development of the north strip area.
The shutdown has approximately 800 construction workers heading to the unemployment lines Economic forecasts for Las Vegas had been pointing at 2009 as the year of recovery. Echelon Place was prepared to hire 10,000 workers when it opened. This would have provided a major spark to the local economy and helped to revive a stagnant housing market.
While this is a major project, it is not the largest in the area. The City Center project is slated to cost a staggering $9.2 billion and provide an even greater number of jobs in the area. The developer of City Center, MGM Mirage and Dubai World, have had their share of problems but have, so far, managed to keep their project on track.
Credit Markets to Blame
Boyd Gaming CEO, Keith Smith, had this to say: “It was a decision based on the economic climate for capital. A lot has changed in the past year. The financing is just not there.” It certainly can’t be an easy decision to mothball a project of this size and scope.
While they claim to be halting the project for a year, it remains to be seen if and when it actually starts again. There have been many projects in Las Vegas that never get off the ground for various reasons, but this one is halfway done.
Las Vegas is a city that prides itself on fantasy and illusions. As you travel the strip you can see the New York city skyline, pyramids of Egypt, a volcano, and the Eiffel Tower. We now have a monument to the real estate bubble as a $4.8 billion construction project gathers dust.
Man, I really like Vegas. – Elvis Presley