A fun way to try and gauge the health of a city’s economy is to go somewhere high up — a skyscraper, an observation deck, a roller coaster — and count cranes.
Cranes mean construction, construction means growth and growth means more money is flowing in and out of the coffers of local business, boosting the tax base and generally making the city an exciting place to live. We can write until our fingers fall off about new leases, secured financing deals and imaginative architectural renderings, but until the crane goes up, there’s no guarantee that development will move forward.
The last time I took the elevator to the top of Baltimore’s World Trade Center, which must have been about six months ago, I remember being able to count the number of cranes on one hand — and they were mostly concentrated in Harbor East, the east Baltimore Science + Technology Park, and the Westside BioPark.
Visiting Las Vegas this week for the ICSC’s ReCon Global Real Estate Convention, I realized just how futile such an exercise would be in that city. You can’t count all the cranes even if you take your socks off. Even if you limit yourself to the Strip — the common name for Las Vegas Boulevard, the centrally-located, hockey stick-shaped road where most of the major casinos sit — it’s hard to get a handle on what “growth” means in America’s fastest-growing city.
Consider, for example, that by the end of March, Las Vegas had hosted nearly 10 million tourists. In 2005, Baltimore marked a seven-year high in tourism by attracting 12 million visitors, for the whole year. One tour guide in Vegas told me that the city was preparing for 45 million visitors in 2009.
What that means is incredible rates of growth and construction, especially along the Strip. According to recent numbers, the city is expected to add 9,119 new hotel rooms by the end of the year, 17,223 by the end of 2009 and11,785 by the end of 2010, bringing the grand total over the next 2½ years to somewhere around 171,000 hotel rooms, plus 33,000 more in proposed projects with undetermined completion dates.
Two projects in particular account for a combined 10,000 of the rooms of the 2009 growth spike: the MGM Grand’s $7.8 billion, massive “CityCenter” project (at ReCon, when I saw Baltimore developer Mark Sapperstein, who is building a new hotel site downtown with the same handle, I asked what he thought of the MGM’s version, and he said, “Well, they stole our name…”), and the $2.9 billion, 4,000-room Fontainebleau, which was going up right near my hotel, at the north end of the Strip.
A few other notable projects are the Encore tower, a 2,000-room, $2.2 billion hotel that is part of the Wynn, the casino and resort of choice for Maryland delegates to the ReCon convention, which is expected to be finished this fall (it looked great, and almost done), several expansions, including the Tropicana (4,000 rooms, $2.5 billion) and Trump International (1,300 rooms, $625 million), and the and two new projects, the Grand Hyatt (3,000 rooms, $3 billion) and Echelon Place, a 5,000-room, $4.8 billion project that is due to deliver in 2010.
By contrast, Baltimore’s two biggest hotel projects under construction are the $600 million, 200-room Four Seasons in Harbor East and the 750-room, $300 million Hilton convention center hotel. Last year, 100 hotel rooms were added to downtown Baltimore’s 64,400-room inventory, and 1,700 more are under construction for delivery between 2008-2010.
In addition, countless sites around Baltimore have lain fallow, development-wise, as the market adjusts to a tough credit market. The site of the old McCormick spice plant at 414 Light Street, the proposed location of the long-fabled “10 Inner Harbor,” a skyscraper that would be Baltimore’s tallest building, has seen no construction to date, and 300 E. Pratt Street, the site of a proposed condominium complex, also remains quiet.
In Las Vegas, there are comparatively few open lots ripe for new construction. One of the few I saw was the former Frontier casino site at the far north end of the Strip, which workers water every day to keep the dust down in front of the shimmering, golden Trump Tower in the distance. A plan on the site for a hotel and casino modeled on New York’s famous Plaza are rumored to be stalled by financing issues.
Of course, Las Vegas is a different city than Baltimore. In fact, most of what we think of as Vegas — the Strip, effectively — is part of unincorporated Clark County, but the city of Las Vegas itself, along with nearby North Las Vegas and Henderson, all dip their cups into the deep well of revenue provided by property taxes, liquor licenses and hotel taxes produced by the Strip’s casinos. The Vegas metro area has three times the population that we do. All their power comes from the Hoover Dam, which makes arguments about utilities a bit simpler than our Byzantine conflicts over Constellation’s regulation issues. Come to think of it, I would take an all-expense paid vacation in quirky, temperate Baltimore 10 times out of 10 over the seedy, plastic, suffocating heat of Sin City.
But wouldn’t it be nice, every once in a while, to not be able to count the cranes that dot the skyline? Anybody know what’s going on with slots?
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