Construction Sizzles in Desert Oasis

By Tony Illia

Mega-projects such as CityCenter, Echelon and Fontainebleau are kicking Vegas construction into high gear for the foreseeable future.

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Las Vegas’ population boom, robust economy and job growth have fueled a building bonanza with nearly $9 billion worth of construction projects in 2007-08, according to McGraw-Hill Construction, publisher of Southwest Contractor.

Construction is Nevada’s second-largest and fastest-growing employer, trailing only gaming and hospitality, reports the state Department of Employment, Training and Rehabilitation. The industry is now responsible for nearly 150,000 jobs statewide -- about 11% of the total workforce -- contributing $14.7 billion annually in economic activity.

“The industry is inextricably linked to the state’s economic and fiscal successes during the past decades,” says Jeremy Aguero, principal of Applied Analysis, a Las Vegas-based economic research firm. “There are numerous $1 billion-plus projects planned or under way and a backlog of public infrastructure improvements in the development pipeline.”

The Strip Keeps Growing

$35.46 billion worth of construction projects are planned through 2010, reports the Las Vegas Convention & Visitors Authority, with much of it occurring along the Las Vegas Strip.

Construction plans call for adding 42,092 more hotel rooms, 2,562 timeshare units and 3.49 million sq ft of convention space. Another $13 billion in tentative projects could also build 36,703 hotel rooms and 7,088 timeshare units.

Las Vegas-based Boyd Gaming’s $4.8 billion Echelon is one of the Strip’s biggest projects. The 87-acre mixed-use development calls for five hotel towers with a combined 5,000 rooms. Morgans Hotel Group, owner of the Hard Rock, is building the Delano and Mondrian hotels for over 1,400 rooms. Hong Kong-based Shangri-La Hotels and Resorts will construct a 353-room hotel, and Boyd will build two hotels itself - Hotel Echelon with 2,300 rooms and the 650-room Suites at Echelon.

The eight-building project, which has 22 acres reserved for future development, will have a 750,000-sq-ft convention center and a 140,000-sq-ft casino.

The site will also be home to a $500 million, 300,000-sq-ft shopping center jointly developed with Chicago-based General Growth Properties, the firm responsible for the Fashion Show Mall on the Strip.

Echelon will also have 4,000-seat and 1,500-seat theaters operated by AEG Live of Los Angeles, plus 9,000 parking spaces and 30 dining and entertainment venues.

Echelon will be constructed with a series of low-bid individual projects. New York-based Tishman Construction Corp. is the construction manager.

“Boyd has made the project attractive to contractors with strong financial backing and history of timely payments,” says Daniel Tishman, company chairman and CEO. “This is a design-buy-build project.”

Echelon will debut in the third quarter of 2010

Rival MGM MIRAGE, meanwhile, is building the $7.4 billion, 18.67 million-sq-ft Project CityCenter on the Strip between Bellagio and Monte Carlo resorts. The 76-acre, seven-building mixed-use complex consists of residences, hotels, casinos and entertainment space. Phoenix-based Perini Building Co. is the general contractor on the project, which will debut in November 2009.

The $2 billion Cosmopolitan Resort Casino is under construction next door to CityCenter at Harmon Avenue and the Strip. Perini, once again, is the project’s general contractor. Cosmopolitan consists of two, 53-story cast-in-place concrete-and-glass towers with a five-level retail, casino and entertainment podium.

Developed by Ian Bruce Eicher, the 3,000-room condo-hotel property is also scheduled to open in 2009.

The firm is additionally building the $600 million, 64-story Trump International Hotel & Tower on the Strip, across from Fashion Show Mall. The 1.5 million-sq-ft, 1,282-unit condo-hotel high-rise is scheduled to finish in February. Perini has already committed to building a second identical $700 million, 1,282-unit tower next year.  

“Our revenues are up significantly and we’re looking at a double-digit growth in the Las Vegas market for 2007-2008 based on our current backlog,” says Dick Rizzo, Perini vice chairman. “We’re just now starting to book work for early 2009.” 

Perini Corp., its parent company, had an $8.6 billion backlog of uncompleted work in the first quarter, with approximately $580 million in the Las Vegas hospitality and gaming market.

And Perini isn’t alone. There are many other Strip construction projects under way, including Steve Wynn’s $2.1 billion, 60-story Encore at Wynn Las Vegas. Tutor-Saliba Corp. of Sylmar, Calif., is the general contractor for the 20-acre, 2,032-room addition scheduled to finish in early 2009.

Las Vegas Sands Corp. is building the new $2.6 billion, 50-story Palazzo hotel-casino, just south of Wynn Las Vegas. Taylor International Corp. of Las Vegas is the contractor for the 3,025-room mega-resort which will open later this year.

In February, Southern Nevada Paving Co. of North Las Vegas began sitework on the $2.9 billion, 3,889-room Fontainebleau Las Vegas at the 25-acre former site of the El Rancho hotel-casino. The 63-story tower will have a 100,000-sq-ft casino, 60,000-sq-ft spa and 3,200-seat theater. Developed by Fontainebleau Resorts LLC, the new Strip mega-resort will finish in fall 2009.

In July, Caesars Palace announced a $1 billion upgrade consisting of a 23-story, 665-room hotel tower addition, a 263,000-sq-ft convention center and a new front entrance and main casino lobby. The general contractor is Marnell Keating, a joint venture of Marnell Corrao Association, Las Vegas, and Keating Building Corp., Philadelphia. The project is scheduled to finish in early 2009.

“The gaming hospitality market continues to be very strong,” says Kevin Burke, president of Burke & Associates, a Las Vegas-based general contractor that expects to record $110 million in revenue in 2007. “It’s another growth year for us, up 20% from the previous year.”

Burke recently finished a $35.6 million, 100,000-sq-ft addition to the AVI Resort & Casino at 10,000 Aha Macav Parkway in Laughlin, about 90 mi southeast of Las Vegas. The three-phase project expanded casino, conference and pool areas, while adding a new parking garage and 1,350-ton central plant.

“There seems to be as much opportunity as ever,” says Robert Potter, president of the Associated General Contractors, Las Vegas chapter. His company, Affordable Concepts, Las Vegas, will do about 30 public and private projects this year for about $54.5 million in revenue.

Going Downtown

Many firms are staying busy downtown, which, like the Strip, is a hotbed of construction activity. Projects include the $3 billion, 12 million-sq-ft World Market Center at Grand Central Parkway and Bonneville Avenue. Developed by World Market Center LLC and the Related Cos., New York, the 57-acre home furnishings design complex will have eight steel-framed buildings between 10 to 16 stories tall. PENTA Building Group of Las Vegas is now at work on the third and largest building - a 16-story, 2.1 million-sq-ft, steel-framed, glass and metal-paneled structure. The $550 million addition is scheduled to finish in June.

Other downtown projects include the $107 million, 852,000-sq-ft Molasky Corporate Center at Grand Central and City parkways, which debuts in September. Marnell Corrao is general contractor.

Developer Sam Cherry will finish the $93 million, 168-unit Newport Lofts at Casino Center Drive and Hoover Avenue in September. Breslin Builders of Las Vegas is the contractor.

Nearby, CityMark Development is building the $167 million, 330-unit Juhl at 255 E. Bonneville Ave. New York-based Turner Construction Co. is the general contractor for the six-building, 2.38-acre residential complex, which is anticipated to finish in April.

Luxury Condos Rise High

The luxury condo and condo-hotel high-rise market is helping keep local constructors busy with 69 projects, totaling 45,616 units, planned in the first quarter, reports Restrepo Consulting Group, a Las Vegas-based economic research firm. While there have been some well publicized cancellations, many other developments are still moving forward.

“There should be sufficient demand to absorb the 6,616 units in the 14 projects that have gone vertical and the 24,809 units that are proposed or haven’t broken ground,” says John Restrepo, company principal. “Many of the projects that have gone vertical are located along the resort and Harmon corridors.”

The South Strip, meanwhile, is a beehive of construction activity with the new $450 million, 756-unit Boca Raton at Serene Avenue and Las Vegas Boulevard. Martin-Harris is the general contractor for the 15-acre, seven-building mid-rise condo complex.

Martin-Harris is also building the $93 million second phase of Tahiti Village, a 27-acre timeshare development, across the street at 7200 S. Las Vegas Blvd. The project calls for a 10-story, 568-unit third tower and a seven-story parking garage with 1,016 spaces.

Farther south, Las Vegas-based AmLand Development/BSR Group’s $600 million, 960-unit One Las Vegas is taking shape at Shelborne Avenue and Las Vegas Boulevard South. Kansas City, Mo.-based J.E. Dunn Construction Co. is the contractor for the 19.5-acre, five-tower condo complex scheduled to open in early 2008.

Office and Industrial

Southern Nevada had 8.5 million sq ft of office development in the second quarter, a 51.7% improvement from a year ago, while retail had 14.1 million sq ft of projects under construction for a 51.2% gain over 2006, Applied Analysis and Urban Environmental Research jointly report.

The Beltway Business Park combines office, retail and industrial space into a 400-acre, master-planned complex along the Interstate-215 Beltway, between Decatur and Rainbow boulevards in southwest Las Vegas. Jointly developed by Majestic Realty Co. and Thomas & Mack Development Group, the development will eventually contain 55 buildings, totaling 5.86 million sq ft, when it reaches build-out in 2012.

“We’re developing different product types to meet a variety of business needs,” says Rick Myers, Thomas & Mack’s executive vice president. “We are continuing to see strong and diverse economic growth that is fueling demand for office, retail and industrial space in Southern Nevada.”

NDOT Goes Design-Build

The Nevada Department of Transportation awarded a $242 million design-build project to North Corridor Constructors LLC, a 50/50 joint-venture between Las Vegas-based Las Vegas Paving Corp. and CH2M HILL of Englewood, Colo., to widen a 5.5-mi section of Interstate 15 through the city.

The project marks the first design-build job in NDOT’s 90-year history. It is expected to save up to two years time over a traditional design-bid-build procurement method, according to Susan Martinovich, NDOT’s director.

The project will widen I-15 from six to 10 lanes from the Spaghetti Bowl interchange north to Lake Mead Boulevard, and it will expand I-15 from four and five lanes to eight lanes from Lake Mead Boulevard to Craig Road in North Las Vegas.

It will also reconfigure the Lake Mead Boulevard interchange and build auxiliary lanes between interchanges to facilitate merging. The project will add improvements such as dynamic message signs, ramp metering and closed-circuit television cameras.

Construction is expected to begin this spring, with anticipated completion by 2010. 

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