Great Homes in Las Vegas Blog!: June 2005 Archives

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June 20, 2005

Billionaires' Vegas Plans Intersect

Hotel projects will make neighbors of moguls Steve Wynn, Donald Trump, Phil Ruffin and Sheldon Adelson.
By Adam Goldman
Associated Press

June 17, 2005

LAS VEGAS — On one corner of the Las Vegas Strip, Steve Wynn runs his signature $2.7-billion mega-resort and busily plans another.

Across the street, Sheldon Adelson is building the Palazzo hotel-casino next to his successful Venetian. Soon to be shimmering near both properties are Donald Trump's gold-glass hotel-condo towers, and Phil Ruffin has ambitious plans for the aging New Frontier casino.

Four billionaire-sized egos, a slew of big-budget projects and all within stone's throw of one another. Is this desert sandbox big enough to hold them? Can the tycoons coexist harmoniously as neighbors?

"It will make for interesting copy and interesting reality," said Jack Wishna, a local deal maker who knows all four men and has a minority interest in Trump's Vegas development.

Once their projects are finished, the four will have invested about $10 billion in their slices of the Strip. In a city known for its commercial combat, posturing and bravado, the fight for tourist dollars could be epic.

To some extent, it has already begun. Three of the four are seasoned at slinging slights. There's more than a little bad blood here and a willingness to spill it, at least with cutting words. It's not a good omen for neighborliness at the north end of Las Vegas Boulevard at Sands Avenue.

Wynn and Adelson are said to dislike each other vehemently.

Wynn, who pocketed $500 million when he sold his Mirage Resorts Inc. to MGM Grand in 2000, can't get enough credit for reinventing the Strip with such mega-resorts as the Mirage, Treasure Island and Bellagio.

Adelson can't take too many bows either, believing the business model he embraced with Las Vegas Sands Corp. — making money off rooms and conventions versus gambling — is what transformed Las Vegas.

Their feud took a nasty, very public turn last year when the pair found themselves trading barbs over the size of the Palazzo's parking lot, among other things.

In an interview, Wynn declined to badmouth his rivals, saying he was interested in making profits, not headlines.

"Las Vegas prospers because of development, not in spite of it. Competition creates more business. It causes hotels to make more money and not less," said Wynn, chairman and chief executive of Wynn Resorts.

When Trump married earlier this year, Wynn was at the wedding. When Wynn opened his newest gambling shrine in April, Trump attended the lavish festivities.

A few years ago, that would have been unimaginable as they brawled over their Atlantic City, N.J., casinos.

Wynn and Trump have enough in common to be friends. Each has a flair for promoting his brand and exploiting his famous persona.

True to form, the Donald will plant his name atop the towers that are expected to cost about $1 billion and be among the tallest on the Las Vegas skyline. A message left for the real estate mogul-TV host wasn't returned.

"One of the things that people in the casino business have done is use their personalities," said Hal Rothman, Las Vegas historian and author. "People don't build enormous casinos without egos to match them."

The wild card in the fray is Ruffin, an unassuming Kansas native.

Ruffin has been quietly sitting back while watching his corner of Sin City soar in value. He partnered with Trump International Hotel & Tower to build the condos at the back of his Strip property, but has so far opted to go it alone with the New Frontier.

Don't underestimate the Wichita businessman who made his fortune in real estate. He might not get the same publicity as his rivals but that doesn't mean he doesn't want to climb a few notches on Forbes magazine's billionaire list.

Posted by bkleinhe at 07:36 PM | Comments (0) | link-it |Find more in Las Vegas Real Estate

June 07, 2005

Cost of living in Southern Nevada not as affordable

By Kevin Rademacher
LAS VEGAS SUN

At one time, not too long ago, the affordable cost of living in Southern Nevada was a major draw for new residents.

Except for prospective residents in a few of the nation's most expensive locales, particularly California, those days are gone. The rising cost of life in Southern Nevada is a big concern for Somer Hollingsworth, chief executive of the Nevada Development Authority.

"Arizona is comparatively cheaper than us right now," Hollingsworth said. "We never had to deal with that before."

Jeremy Aguero, a principal with Applied Analysis, said that the cost of living here recently came in higher than the composite cost of living for Southern Nevada's top 10 feeder states for new residents, excluding California.

It marked the first time in history Las Vegas costs surpassed the average cost of living in those states.

While the new findings do not mean Nevada is more expensive than ultracostly Hawaii and New York, Aguero said it shows that the average new resident from those nine states will pay more to live in Nevada than they are currently paying. Other top feeder states are Arizona, Colorado, Florida, Illinois, Texas, Utah and Washington.

Keith Schwer, a UNLV economist and director of the Center for Business and Economic Research, agreed with Aguero's assessment of Southern Nevada competitive position compared to its feeder markets.

"You can't lead the nation in housing prices and not have that affect the cost of living," he said. "That means Las Vegas is not as good a buy for people moving here. There's less free money after you take care of necessities."

The Nevada Development Authority has been pushing for a communitywide effort to address affordability before it begins to drag down the valley's roaring economic.

"When people make $21 or $22 a hour and can't afford to buy a home or find an apartment to rent, it is going to bite us," Hollingsworth said. "I have a very, very big concern about it."

"If we don't do something about it now, we're going to have to deal with it in the future when it's a crisis," he added.

In addition to housing costs, major components in the cost of living include groceries, health care, transportation and utilities, Aguero said, emphasizing the housing component.

"It's absolutely the biggest chunk," he said.

In 2003, the local home price index was below the 100 level that marks the national average, Aguero said.

"In one year's time, we are well above the national average," he said, of the new index rating of 121.7.

This week, The Office of Federal Housing Enterprise Oversight said Nevada's soaring housing costs paced the nation with a 31.2 percent appreciation rate from the first quarter of 2004 to the first quarter of 2005.

Additionally, the Las Vegas metropolitan area was the second hottest city for appreciation in the 12-month period with housing prices up 33.3 percent, OFHEO report said. The Reno metropolitan area was right behind Las Vegas, third nationally with a 12-month appreciation rate of 31.8 percent.

Over a five-year period, Las Vegas housing prices are up 89.1 percent, the report said. Reno's five-year rate was 85.2 percent, the report said.

Recent statistics from Home Builders Research Inc. showed the median new home price for the Las Vegas Valley was $281,355 in April, up from $233,360 in the same 2004 month. In April 2000, the local median new home price was $148,886, Home Builders Research said.

In addition to higher housing prices, Schwer said that health care and grocery costs also run high in Southern Nevada. While he said that the rising cost of living here does not figure to end the region's run as a hot spot for economic growth, it could be a factor in the future.

"It doesn't mean it will choke off all growth, but for some people, they may be better off staying in Peoria than moving to Las Vegas," Schwer said.

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