BluefoxToday blog : November 2007

Vegas is already on the map of those who are looking for world-class entertainment, gaming and late night action. Over the years it has also sought to mix those elements with sports, which nowadays is becoming ever more multi-function entertainment and less pure athletics.

Boxing has been and still is a big draw in town. Formula One racing was on the agenda for a few years, as was pro soccer, but both failed to gain the needed acceptance for long-term survival. Bringing in a major league pro team here continues to be the dream of City Hall and many resorts. How about a basketball or hockey team with the name Caesars Gladiators or MGM Lions? One day it might be a reality.

Now it's the marathon's turn to try its hand in Southern Nevada. Sunday's race is the third annual and if it manages to attract as many runners as it did last year, which was 16,400, it has a good chance to make it. Actually, according to race organizers, they should top that number come Sunday, so at this point things look good. 

Marathons held in Sin City are a little different from the standard affair seen elsewhere. This is Las Vegas after all. Entertainment stages have been dropped to 11 locations along the route to keep the faithful in the right mood, in case the sleek and apparently tireless runners can't do it. The Blue Man Group will be there, musicians from Cirque du Soleil have signed up and the rest are surprise performers. There is more. At mile 5 marker over 50 couples will officially tie the knot, although, honestly, the entertainment value of that is doubtful.

Then there are the Elvis runners. Seriously. The race attempts to break the world record for most Elvis runners which presently stands at 147. The word on the street is that a new standard will likely be set at this event. Who thought about that?

Heading a ranking of this nature reflects accurately what happened here during the real estate boom days a few years ago. It was then when many homeowners and professional and weekend investors got carried away in the charged atmosphere of fast-rising home prices and failed to hold back in time when the market was about to plunge over the edge. Call it bad timing, poor judgment or greed, it doesn't matter which, but it's still hurting equally bad those who were caught in its ugly repercussions.

On per capita basis Nevada leads the national preforeclosure list with a rate of 4.05, followed by Florida at 2.86, Arizona at 2.05 and Colorado at 2.04, according to Foreclosures.com. These figures alone don't tell much, except that who has the most, who is second and so on. Please click on the link in this paragraph to read the entire article.

As soon as SBE Entertainment and Stockbridge Real Estate Funds closed on the purchase of the old Strip heavyweight in August, the new owners went to work. Their short-term plan was ready to go the minute the ink dried.

Many of the public areas in and outside the Moroccan-themed resort were improved and refurbished. The hotel lobby is now more welcoming with new sofas and chairs and the black-and-white photos of past entertainers lined up behind the front desk are greeting guests with more flavor. Customers visiting the dining rooms make selections from fresh menus and the outdoor areas have seen the deft hand of professional landscapers.

There also is a long-term master plan. To work on that SBE hired two experienced Las Vegas firms, Marnell Corraro Associates as the general contractor and Bergman, Walls and Associates as the architect, to prepare a redesign draft for the 55-year old property. One thing, though, is certain, they assure everyone. The hotel won't be imploded which has been the sad fate of many old-timers on the Strip. Remember Dunes, the Sands, Stardust and many others.

SBE is going to take its time in deciding what exactly to do. The north end of the famous boulevard is presently undergoing a significant transformation, as new resorts are being built or are on the drawing board a mere stone's throw away. Crown Las Vegas is working on plans for a $5 billion mixed-use project next door that would have 5,000 units, including condominiums.  MGM Mirage owns a large parcel across the street and is teaming up with Kerzner Holdings International to develop that site. Fontainebleau Hotel is already under construction and will feature about 3,800 rooms and suites when completed in 2009.

With that kind of competition in the neighborhood they want to make sure their product will find its niche among them. They look to differentiate themselves. One of the unique draws could be the inclusion of the legendary performers of yesteryear somehow into the marketing mix. Think Johnny Carson, Dean Martin, Tina Turner, Pat Boone, Connie Francis to start with and convey their aura into a distinctive business proposition.    

While U.S. energy policy is still looking for a meaningful direction from Washington, individual states have stepped into the void to take the lead on this key policy issue. They had no other choice. The current leadership out in Washington seems to lack the will and the vision to come up with a set of directives that would guide our energy future. It's in dire need of bold initiatives and lasting solutions that the nation is waiting for.

Environment America, a federation of state-based, citizen-funded environmental advocacy organizations, recently released a report that commended officials in several states for their policy initiatives to improve renewable energy programs, save energy and require increased efficiency in cars. Sierra Club and the National Audubon Society joined it in praising the governors' and state legislators' forward-looking efforts. At least politicians on the state level understand the responsibility to act on behalf of their own residents and ultimately the entire country.

Environment America's report looks at five different areas critical to clean energy policy; renewable electricity standards, utility energy efficiency programs, the Clean Cars Program, energy efficiency standards for appliances and building energy codes. Using these criteria it then gives states a rating based on their plans and achievements.

Nevada earned a "rising star" ranking, a third-tier placement, for its regulations that meet three of the policy requirements, namely renewable electricity sources, utility programs and appliance standards. To make it to the higher levels entails passing more biting energy efficiency laws on cars and building codes.

The top tier is called "gold star" and the states earning that designation were California, Connecticut, New Jersey, New York, Oregon, Rhode Island and Washington. The "silver star" went to Massachusetts, Maryland, Maine, Pennsylvania and Vermont.

It's that time again. Under normal weather conditions Lee Canyon ski center will be able to open all runs around Thanksgiving. This fall, though, temperatures have been unusually warm which has thus far limited snowmaking to cover only the Bunny Hill. Or officially Rabbit Peak, which opened today. If the weather stays cold like it now is, the two main slopes will come on line pretty quick as the snow cannons are working. A decent snow storm roaring in, of course, would also help.

The resort operators have done some upgrades during the off-season and expect for a good reason this winter to be the best on record. The snowboard park, called the Dark Side, has been refitted with new rails and boxes. Since 70% of visitors coming up to the mountain are snowboarders, it makes perfect sense.

The resort has also added more spaces in the locker room and replaced quite a bit of the old rental equipment, it's about time, including skis, snowboards and bindings. It installed around 1,000 feet of new snowmaking water line to improve efficiency, allowing the system to make more and better-grade snow.

The base lodge houses the Big Horn Café where you can grab a burger and a beverage to enjoy either in the dining room or out on the sundeck. If you forgot something, the sports shop or the rental facility can probably alleviate your concerns.

The ski resort's website at www.skilasvegas.com has daily snow reports, ski lift status updates and road condition highlights. Or it can be reached by phone at 593-9500. Happy skiing.

The media headlines have been relentless in sending the message that the residential real estate market in many areas is sinking fast. The glut of new and resale homes sitting for months without a viable buyer in sight is certainly worrisome, as is the trend of tightening underwriting guidelines in the mortgage sector. As a result of all that, prices are declining. The market is undeniably trying to find its footing again, but is it really that ill in the big picture? In the broad sense of national economics?

The Federal Reserve, or just the Fed, recently released its "flow of funds" statistics and they show that the equity homeowners had in mid-2007 amounted to a massive $10.9 trillion. It was arrived at by taking the market value of residential real estate, roughly $21 trillion, and deducting mortgage obligations of $10.1 trillion from it. This alone doesn't say much, only that it's a lot of money.

Let's go a little deeper into the issue. In the second quarter of 2007 homeowners lost $6 billion in equity when compared with the first quarter. That was expected. However, it was still $48 billion higher than in the fourth quarter of 2006. Some ground was lost, but clearly a $6 billion decline in a $10.9 trillion market is a drop in the bucket. 

Another observation points in the same direction. Many metropolitan areas enjoyed surging value increases during the explosion a few years ago. Prices actually more than doubled in 33 major cities between 2001 and 2006, according to the Fed's study. That was an unsustainable period of escalation. Today, the new Standard & Poor's/ Case-Shiller home price index reports that prices are down 4.4% on average in the 20 large markets it covered. They can be even lower than that, say 10-15%, and homeowners will still keep most of the appreciation they garnered during the boom. Letting go of 15% from a 100% gain should be easily palatable.   

One hard-hit city is Los Angeles where home values dropped 5.7% in the last 12 months, but are a net 88.9% higher since 2002, according to the Case-Shiller index. Las Vegas is also in the grip of a major correction and while prices are giving ground here, too, the end result is shaping up to be very similar to that of Los Angeles. Overall, as is evident, the picture isn't nearly as gloomy as the headlines make it sound.

It's easy to count out the fingers of one hand when you think of how many times Union Park has been in and out of the news over the past decade. It's a 61-acre parcel of land the city of Las Vegas owns west of downtown. City Hall has worked for years to find a reliable developer who can successfully complete its intended vision there but for one reason or another the plans always fell through. Frustration was understandably setting in.

Optimism, however, is rising again. It comes on the heels of a major strategic change on how to approach the entire project. The concept of one developer handling it all was scrapped and the site was broken into several pieces, each now having its own designated developer. It seems to have made the difference that at least for now is pushing the master plan forward.

The Lou Ruvo Brain Institute, designed by Frank Gehry, is already under construction in the area's southwest corner. The Smith Center for the Performing Arts is considered the anchor for the site and its recent fund-raising efforts have been successful enough to allow planners to talk about groundbreaking late next year.

There are more good news. At least three other developers are to present their plans to the city in the first quarter of next year. The World Jewelry Center envisions a 50-story tower there that would house everyone involved in the business, from designers to manufacturers. Charlie Palmer, the celebrated chef, and his group are ready to build a 400-room boutique hotel on the site and place a fine dining restaurant bearing his name on the top floor. Access Medical is also coming in to spread out their blueprints on the table for a 400-room business hotel, a medical office building and a surgical center.

The site wouldn't be complete without a residential component. Newland Communities will fill that role by building up 3,200 units there. Design options range from street-level brownstones and mid-rise condos to apartments and high-rise condominiums, with the neighborhood being supported by life's everyday conveniences.

This time around Union Park just might come off the blocks for good. All the planned projects may not happen as planned, yet the current positive momentum seems to carry it over the initial hurdle or two and when other developers and commercial mortgage lenders see that it's a viable location, they are likely to join in.

Bugsy, remember Bugsy Siegel, and company would turn in their graves if they knew what is going on now in the town they helped splash on the map. Those days casino bosses ran the show on the Strip and one of their marketing ideas of attracting traffic was to offer plenty of cheap eats. That's basic. Who in his right mind would turn down a tasty, totally affordable bite? 99 cent shrimp cocktail was one of their marquee items and $1.99 steak dinner was another, bargains you couldn't pass up.

That was then, though.

And this is now. Las Vegas is under new management, if you didn't already know. It's called corporate management and they have turned things completely around when it comes to using food as a marketing tool. They have gone au courant. In other words, upmarket.

Let's look at some of the latest ideas. One of the memorable menu items is the Fleur Burger 5000 at Fleur de Lys at Mandalay Bay. To put your hands on this Kobe beef creation sets you back a decent $5,000, so it must be the mother of all burgers. Oh, and it comes with a bottle of Chateau Petrus from the 90's and Ichendorf crystal glassware.

Another one that might get you salivating is the Ultra Highroller Roll at Sushi Roku in the Forum Shops at Caesars Palace. The humble ingredients in it are toro tuna, beluga caviar, lobster tail, Kobe beef, again, and white truffle oil. The main attraction, however, is the sprinkling of 24-karat gold flakes. Frankly, I didn't know you could eat gold in any shape or form. Anyway, a roll like that goes for $225.

Sin City sure has come a long way from Bugsy's days, hasn't it? It's anyone's guess how many of these delicacies are sold, say, weekly, but these restaurants and resorts certainly get the media to write about them and their other products. Maybe that is the whole idea. Get a discussion started. Bring up their name. Yet, it's a good bet, too, that there are visitors and gamblers who are in search of an out-of-body experience and one of these might well accomplish that.

photo by mykreeve

It was only a few years ago when affordable housing was one of the great draws in Southern Nevada. Despite the city growing at a breath-taking pace supply and demand stayed in sync and kept real estate prices relatively stable. And then suddenly the secret was out of the bag, sometime in 2003 and 2004, and speculators in particular moved in to ply their trade and began driving prices ever higher. The ensuing frenzy predictably ended in a bust that still prevails.

Those home builders who are still operating in Las Vegas have drastically revised their business plans to survive. Not too long ago the median new home price was heading well past the $300,000 mark, but in doing so slowly started to become unrealistic to many buyers. The market eventually tanked, as we well know, and values are now marching the other way. Going toward where the annual household incomes can afford them again. To read the entire article, please click on the link in this paragraph.

Nevada has a lot of open spaces across its deserts and long mountain ranges where wind has the freedom to race and swirl as fast as it can. It sometimes blows into Las Vegas valley with such a fury that it knocks unsuspecting and tipsy visitors into resort pools. Besides, on those days you don't want to play golf.

The idea to harness this natural resource has been slowly gaining traction here. Recently a major hurdle was overcome when Senator Reid convinced the Defense Department to drop its objections to the development of a wind farm in Wilson Creek Range in the eastern part of the state, about 180 miles from Vegas. It could become the site for a 450-megawatt project. Sierra Pacific Resources, owner of the state's two largest utilities, has plans to build a 200-megawatt facility in northeastern Nevada. There clearly seems to be a healthy dose of momentum toward harnessing this free and clean energy source.

A few challenges remain, however. Environmental groups are generally in favor of renewable energy, including wind, but in this case they are concerned about bird destruction and the impact support roads will have on the mountains where the farms would go. The federal tax credits the wind power industry presently enjoys are set to end in 2008, unless extended by Congress. And then there is the transmission of power that currently doesn't receive tax credits. It's estimated to cost $1 million per mile to bring power from these remote locations to service points while coal, the main competitor, still is much cheaper.

Sierra Pacific Resources has a mandate to produce 20% of its power from renewable sources by 2015 and its intention is to have wind play an important role in meeting that goal. At this juncture Nevada doesn't have one single wind turbine in operation, so it has to get with the program. Or else. Industry projections hold that Nevada has the capacity to generate from 1,000 to 1,500 megawatts of wind power, which would supply around 1 million homes.

It was surprising to discover that the Defense Department over the years has been the major barrier to wind power development in the state. Supposedly the tall towers would interfere with Air Force's radar operations and complicate their training maneuvers. Somehow these claims appear thin. It's a large state where there should be enough room for the planes and the turbines.