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Giant
Sucking Sound…
MGM Mirage Development Will Absorb All
the Skilled Construction Labor in the Valley – And Beyond!
By Ned Barnett
The
mega-casino corporation MGM Mirage plans to develop a multibillion-dollar
"urban metropolis" on the Strip, located between Bellagio and the
Monte Carlo
. The 66-acre development, Project CityCenter, is intended to jump-start
Las Vegas
as a sophisticated, multidimensional city, according to Jim Murren, MGM
Mirage’s President and CFO.
This has
local construction companies either salivating or cringing – with insiders
talking about a “giant sucking sound” that will absorb all the available
skilled construction labor in
Nevada
and surrounding states. One
trade association exec noted that the CityCenter’s life-safety sprinkler
system along will require a huge number of qualified installers.
“If every licensed life-safety installer now living in
California
,
Nevada
and
Utah
were recruited to this one project, the MGM Mirage would still be short of
what they need by 40 percent.”
The news
of this extraordinary labor-pool demand has gone international.
For instance, a Deutsche Bank study earlier this year noted that a
“material lack of qualified labor in
Las Vegas
over the next several years” could threaten construction plans for new
casinos and high-rise condominiums being developed here.
"Despite
the phenomenal growth of
Las Vegas
, the construction talent pool is not deep enough to provide the needed
labor to build all currently announced projects," Deutsche Bank analyst
Marc Falcone told the Gaming Wire.
"We believe if all of the announced and anticipated projects were to
proceed before the end of the decade, a significant portion would not get
off the ground given the limited depth of the construction talent pool, most
importantly subcontractors."
Remarkably,
the CityCenter project is one of 14 billion-dollar-plus projects now in
active development in
Las Vegas
and
Clark
County
– together, these 14 projects reflect a construction budget in the $21
billion dollar range.
This
huge demand for construction workers on big-budget projects – ones where a
dollar or two per hour seems insignificant – has significant implications
for the industry. This demand
will impact both other metro communities – who stand to lose hoards of
skilled construction workers to the voracious
Las Vegas
appetite for mega-growth – and local residential and light-commercial
construction firms, who fear they will have to match – or perhaps even
exceed – big-budget major corporation union wages and benefit packages.
Reports
circulating in the construction industry say that the local plumbers union
is offering qualified workers from $2.00 to $4.00 above scale – plus
benefits – for work that could extend out to four or five years.
Reportedly, MGM Mirage told the union that they’d “pay what it
takes” to make sure CityCenter is completed on schedule.
According
to reports published in the Las Vegas Review-Journal and other sources, the
18 million-square-foot first phase of Project CityCenter calls for the
active construction of a 4,000-room hotel and casino, as well as the
construction of three 400-room boutique hotels to be operated by
internationally recognized companies not currently in Las Vegas.
Other Phase-One projects include 1,650 luxury condominium-hotel
units, along with more than 550,000 square feet of retail, dining and
entertainment space.
Project CityCenter will, when completed,
be the most significant privately funded project in the
United States
, according to Murren. The first
phase, budgeted to cost between $3 billion and $4 billion dollars, is
expected to create more than 7,000 construction jobs, many of them running
for four or five years during Phase One – with the potential of continuing
high-paid work in subsequent development phases.
Once design is completed late in 2007, construction of the first
phase is expected to take about 42 months.
Project CityCenter is scheduled to open in 2010, and word on the
street has MGM Mirage ready to pay “what it takes” to make sure the
project does open on time.
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