By Thomas Schulz in Las Vegas
The bar on the 64th floor of the Mandalay Bay Hotel offers what could arguably be the best view of Las Vegas at night. A mile-long strip of brightly colored neon lights and gigantic, floodlit casinos glitters through the bar's floor-to-ceiling windows. Still, as you survey the otherwise dazzling city of nocturnal light, you can see conspicuous patches of darkness dotting the landscape.
One of these black craters is the construction site for the Fontainebleau Hotel casino and the 4,000 rooms it is supposed to offer. When the investors ran out of money, 70 percent of the project had already been completed. If you look diagonally across the street, you can see the site of what is supposed to be the Echelon complex. Only eight of its planned 57 stories were completed before the construction cranes pulled out.
There is even a dark, gaping hole next to the Trump Tower. A twin had been planned for the site, but it will most likely never be built. Las Vegas, the global symbol of gambling and glitz, is hurting.
Super-Sizing Paradise
Over the last two decades, no other American city grew as quickly as Las Vegas. In 1980, it had 460,000 inhabitants; now it has 2 million.
Nowhere else was the boom wilder, consumption more excessive and the delusions of grandeur more extreme. New houses and apartment complexes shot up by the tens of thousands. Dozens of new casino hotels were built, many of which boasted 2,000, 3,000 or even 4,000 rooms. Celebrity chefs came to the city to open satellites of their famous restaurants, while junk shops gave way to stores offering exclusive fashion labels.
During that era, the strip was crowded until even 4 a.m., mainly with drunk, carefree Americans who could hardly believe they could walk around outside with a beer in their hand, that they could still smoke in public establishments and that there were swimming pools where women could go topless.
In a country notorious for its puritanical bent, Las Vegas is an anything-and-everything-goes kind of place. But now, the recession has blasted open one of its deepest craters here in this city surrounded by the Mojave Desert. Las Vegas now has the country's highest rate of home foreclosures, and more than 70 percent of homeowners here owe more on their mortgages than their houses or condos are worth. Since 2006, the average home price has dropped by a half.
Unemployment, on the other hand, has risen -- from about only 3 percent to over 13 percent. The city's luxury hotels have seen tens of thousands of reservations cancelled. Major casino operators are deeply in debt. In the spring, one of them, the MGM, barely escaped from having to declare bankruptcy.
In the meantime, economists are already warning that the collapse of the US residential real estate market could be followed by a similar disaster in commercial real estate. And if that bubble bursts, it will hit Las Vegas first.
1 | 2 | 3 | 4 Next Part 1: Hard Times in the City of Sin Part 2: Migrating Money Part 3: Deutsche Bank to the Rescue? Part 4: Mafia Vegas vs. Vegas Inc. Social Networks
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DER SPIEGELThe Recession's Impact on Las Vegas in Figures
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NEWSLETTER Sign up for Spiegel Online's daily newsletter and get the best of Der Spiegel's and Spiegel Online's international coverage in your In- Box everyday. FB.init("8e0192d8770be48129dc946121d0092e"); MORE FROM SPIEGEL INTERNATIONAL 2009 Election Germany Goes to the Polls: Picking the Next Chancellor World War II Truth and Reconciliation: Why the War Still Haunts Europe Global Economy Green Shoots: Europe Climbs Out of Crisis Climate Change Global Warming: Curbing Carbon before It's Too Late Fall of the Wall 20 Years Later: Legacy of the Iron Curtain Overview International Home Politik Wirtschaft Panorama Sport Kultur Netzwelt Wissenschaft UniSPIEGEL SchulSPIEGEL Reise Auto Wetter DIENSTE Schlagzeilen RSS Newsletter Mobil VIDEO Nachrichten Videos SPIEGEL TV Magazin SPIEGEL TV Reporter MEDIA MediaSPIEGEL Mediadaten Quality Channel buchreport weitere Zeitschriften MAGAZINE DER SPIEGEL KulturSPIEGEL SPIEGEL special Harvard Business Man. einestages SPIEGEL GRUPPE Abo Shop SPIEGEL TV manager magazin SPIEGEL-Gruppe WEITERE Alle Artikel Hilfe Kontakt Nachdrucke ImpressumOne of these black craters is the construction site for the Fontainebleau Hotel casino and the 4,000 rooms it is supposed to offer. When the investors ran out of money, 70 percent of the project had already been completed. If you look diagonally across the street, you can see the site of what is supposed to be the Echelon complex. Only eight of its planned 57 stories were completed before the construction cranes pulled out.
There is even a dark, gaping hole next to the Trump Tower. A twin had been planned for the site, but it will most likely never be built. Las Vegas, the global symbol of gambling and glitz, is hurting.
Super-Sizing Paradise
Over the last two decades, no other American city grew as quickly as Las Vegas. In 1980, it had 460,000 inhabitants; now it has 2 million.
Nowhere else was the boom wilder, consumption more excessive and the delusions of grandeur more extreme. New houses and apartment complexes shot up by the tens of thousands. Dozens of new casino hotels were built, many of which boasted 2,000, 3,000 or even 4,000 rooms. Celebrity chefs came to the city to open satellites of their famous restaurants, while junk shops gave way to stores offering exclusive fashion labels.
During that era, the strip was crowded until even 4 a.m., mainly with drunk, carefree Americans who could hardly believe they could walk around outside with a beer in their hand, that they could still smoke in public establishments and that there were swimming pools where women could go topless.
In a country notorious for its puritanical bent, Las Vegas is an anything-and-everything-goes kind of place. But now, the recession has blasted open one of its deepest craters here in this city surrounded by the Mojave Desert. Las Vegas now has the country's highest rate of home foreclosures, and more than 70 percent of homeowners here owe more on their mortgages than their houses or condos are worth. Since 2006, the average home price has dropped by a half.
Unemployment, on the other hand, has risen -- from about only 3 percent to over 13 percent. The city's luxury hotels have seen tens of thousands of reservations cancelled. Major casino operators are deeply in debt. In the spring, one of them, the MGM, barely escaped from having to declare bankruptcy.
In the meantime, economists are already warning that the collapse of the US residential real estate market could be followed by a similar disaster in commercial real estate. And if that bubble bursts, it will hit Las Vegas first.
© SPIEGEL ONLINE 2009 All Rights Reserved Reproduction only allowed with the permission of SPIEGELnet GmbH
The Recession's Impact on Las Vegas in Figures
Find out how you can reprint this DER SPIEGEL article in your publication.
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