Editor's note: This article is part of Construction Dive's 50 States of Construction series, in which we talk with industry leaders across the U.S. about the business conditions in their market.
There's no denying the draw of Sin City. Casinos, resorts and entertainment options have made the Las Vegas Strip the most-visited tourist attraction in the world.
However, the Great Recession sent construction activity in the booming Las Vegas market to a crashing halt. Developers stopped work on large-scale hospitality and gaming projects as they saw funds dry up and demand dwindle. Building activity has failed to fully recover in the city, as owners and construction teams wait for a new, massive project to serve as a catalyst for the market.
Today, local contractors aren't optimistic about just one potential project — they have their eyes on three. The planned Raiders stadium, convention center expansion and Wynn Paradise Park projects are all currently in the works. Progress on any of those three undertakings could have huge implications for the local construction market — not just as a boost in activity, but also as a potential source of strain on the labor market.
Tutor Perini Building, a division of Tutor Perini, has an extensive history on the Las Vegas Strip, including serving as the general contractor for the Cosmopolitan and the Wynn Encore. The company is paying close attention to those three planned projects as it awaits its own chance to potentially tackle the next big addition to the Strip. While Tutor Perini has also worked in northern Nevada cities like Reno, Las Vegas accounts for the vast majority of its work in the state.
Construction Dive spoke with Travis Burton, regional vice president at Tutor Perini Building, about the current environment of anticipation among members of the Las Vegas construction community, as well as the unique aspects of building on the Strip and the potential ramifications of a sudden jump in construction activity.
Editor's note: This interview has been edited and condensed.
How would you describe the current market in Nevada?
BURTON: The market in Nevada has been pretty up and down since the 2008–2010 time period, or what we refer to as the crash. There’s been some work going on — room remodels, smaller projects — but nothing of any substance in the building side of things relative to new hotels, casinos or the kind of work that we do here.
Do you expect that to change soon?
BURTON: We expect it to change, and we’re very hopeful that it is on the cusp of changing. The Nevada Legislature passed Senate Bill 1 [in October 2016], which was an effort to provide some portion of the funding through hotel tax revenues to build the Raiders stadium and to have the Raiders relocate to Las Vegas. That bill also established a tax district for the [expansion] of the new convention center that is going to sit down on the Las Vegas Strip. That bill was a key component in order to continue the momentum for the stadium, and it established the means to pay for the convention center.
With those large projects, we believe that there are some other large hotel/casino projects that are going to move forward. There’s been a few of them that have been hanging around for several years that have been stagnant since that time period. The Wynn just announced that they are intending to move forward with Paradise Park, which is a $1.5 billion development behind the Encore [Resort]. With those three large-ticket opportunities here in Nevada, we’re very optimistic in terms of work.
How did the recession and subsequent halt in projects impact Tutor Perini?
BURTON: Between 2005 and 2010, Tutor Perini Building saw our largest volume of work ever. During that time, we were constructing the CityCenter project, the Cosmopolitan project, and a sister company of ours also constructed the Encore. Since that point in time, there have been several large properties that were started but were suspended and largely mothballed as the market stagnated. Most of those projects, as we sit here today, have really struggled to restart and gain a foothold to actually move forward with construction.
What has Tutor Perini worked on in Nevada since then?
BURTON: Late last year, we were working heavily on a proposal to build the Élan [Resort & Casino], which was one of the large hotel/casino projects slated for the Strip. We remain hopeful that it will someday move forward, but right now, ownership has not announced anything further than when their partner announced that they didn’t want to continue with the project in December of last year. Since then, that project has been questionable. Although we remain hopeful they’ll eventually get their financing together and the project will move forward, we have not been given any other reason to believe that it will go forward soon.
How does construction in Las Vegas and Nevada differ from other parts of the country?
BURTON: In terms of the market niche we’re in — the hotel/hospitality/gaming facilities sector — the construction tends to be fast-tracked. The climate in Nevada allows for that. The building department and local agencies are accustomed to it. A lot of these projects move through a fast-track basis, where they’ll start construction before the design is complete, and they’ll break the permits for construction into different packages so you can begin building sooner. Other locations [likely have that fast-track trend] too, but it’s pretty much a staple here in Nevada. It’s the way it’s done.
How would you describe the labor situation in the state?
BURTON: There will definitely be a labor issue associated with the market here if, in fact, one or two of these large projects we’re speaking of occurs simultaneously, which is likely. With the downturn in 2008–2010, a lot of the construction jobs from the trade craft perspective were focused in other areas, and some of the members of the unions migrated to where the work was.
The same thing applies to management, supervision and project engineering. The market in California has been very busy, San Francisco and Los Angeles particularly, [as well as] New York and Florida. A lot of those types of salaried construction management positions are very hard to come by right now, market-wide. It will be really pronounced in Nevada if these projects coincide at all.
How are you attempting to combat that labor shortage?
BURTON: We can all see [the shortage] coming, we’re all talking about it, and we’re doing the best we can to identify and recruit people now. These projects in Las Vegas are widely known; people are keeping their eye on them. When the momentum starts and one of those projects is a go, you’ll find some of the other [projects] fall in and go, and that will attract some of these people back to Las Vegas. [The return of workers] will lag behind the actual start of that construction, so we’ll be working hard to recruit and locate those people and get them back here.
What are your predictions for the future of the Nevada market?
BURTON: We’re optimistic with the progress that’s been made with the Raiders relocating to Las Vegas [and] the NFL approval vote. We remain optimistic that with the stadium, convention center and the recent announcement from Wynn, those three projects will move forward — it’s just a matter of how quickly. We’ve had, over the last few years, a couple of other periods of time when it looked like the market was going to trip and a project would start, and everybody was holding their breath that it would kick-start new construction. But then it softened out and didn’t happen. This one has the best momentum and the best positive energy.