sort on the New Frontier site; having paid $1.24 billion for the site in 2007, the Israeli-based Elad IDB Las Vegas LLC saw their property devalued to $652 million by fall 2008. In 2009 the downward drift continues on. The $2.9-billion Fountainbleu, 70 percent complete, is mired in litigation. More striking was the near failure in the spring of the Strip’s flagship CityCenter project; although failure was ultimately averted, one of its towers, designed by Norman Foster, was capped at half its original height.
Residential properties, whether in the high-rise towers along the Strip or in the vast low-rise subdivisions surrounding it, have been pummeled. Hit by waves of foreclosures, the median price of existing homes has fallen from a high of $289,500 in June 2006 to $122,000 in May 2009 — a 58% decline. New home sales declined even more dramatically: 38,755 were sold in 2005 but it is doubtful that more than 5,000 will be sold in 2009. 39 It is no surprise that many developments are on hold or have been foreclosed on. These include the 14,000-home, 1,700-acre Kyle Canyon development; sited near the Mount Charleston recreation area, this greenfield community was touted as exemplary in the city’s “Sustainable Las Vegas” campaign of 2006. Similarly, a 2000-acre “new urbanist” community at the opposite end of Mount Charleston is facing litigation as its builders default.
Lake Las Vegas, once the flagship of the southern valley’s move toward upscale resort living, has become its poster child for failure, as the master developer and several sub-entities seek bankruptcy protection. Two of its three completed golf courses have closed; land was graded for a fourth course that remains unfinished; and the lake itself narrowly escaped draining into Lake Mead due to structural damage. Beyond the valley, Coyote Springs has postponed its grand opening. Casinos have closed in towns like Jean and Mesquite, and smaller boomtowns like St. George are sponsoring foreclosure tours. Ironically, lands that had been in private hands since settlement in the 19th century are now under federal control as the FDIC takes over banks whose assets include failing developments.
So Las Vegas finds itself at a remarkable historical juncture. Long touted as recession-proof, the city is struggling not only with plunging real estate values but also with double-digit unemployment, record deficits and loss of self-confidence. In 2007 tourism, a mainstay of the economy, boasted a record 39.2 million visitors. 40 Since then McCarran International Airport has seen 19 consecutive months of passenger decline. 41 Michelin will not be producing a 2010 guide for Las Vegas. Even more striking is that after ten consecutive years of annual population gains, averaging more than 60,000, Clark County declined last year by 10,000. 42 Since 2008, more than 4,000 adults leave the Las Vegas Valley every month. 43
And all the while the water level of Lake Mead continues to drop. Currently it is at its lowest level since 1965, when water from the Colorado was held upstream to fill the new reservoir of Lake Powell. In the 19th century the great explorer John Wesley Powell judged the “arid region” of the American West as incapable of supporting large populations. History might finally be catching up with this city always focused on the new. The urbanization of the Mojave Desert seems to be leading inexorably to the desertification of Las Vegas.