Strip casinos closed but coronavirus has not stopped more than $7 billion in tourism projects

Strip casinos closed but coronavirus has not stopped more than $7 billion in tourism projects

  • Howard Stutz, CDC Gaming Reports
March 20, 2020 10:38 AM
  • Howard Stutz, CDC Gaming Reports
  • Other

Coronavirus closed the Strip, but the pandemic hasn’t shut down the Las Vegas tourism industry’s largest construction projects.

Development is continuing on the $2 billion Allegiant Stadium, a $980 million expansion of the Las Vegas Convention Center, the $4.3 billion Resorts World Las Vegas resort, and the privately funded Circa Casino-Resort in Downtown.

Governor Steve Sisolak ordered a 30-day shutdown of Nevada’s casino industry on Tuesday evening, along with numerous “non-essential businesses,” in an effort to slow the spread of COVID-19 coronavirus, which is nearing 100 cases in the state. Gaming was halted on the Strip at midnight Tuesday and some 157,000 hotel rooms were cleared of guests by Thursday morning.

But construction is continuing on the projects, with workers practicing social distancing.

Laborers Local 872 Secretary-Treasurer Tommy White told KSNV-TV precautions were being taken on the Allegiant Stadium construction site.

“We are very proactive about what’s going on with the virus. We supply hand sanitizer,” White said. “We’re also allowing our sites to split the shifts to where one whole shift comes off the job site before the other shift comes on.”

The stadium, which will be home to the relocated Las Vegas Raiders and UNLV’s football team, is expected to be completed by the end of July. The first scheduled event at Allegiant Stadium is a concert by country music superstar Garth Brooks on August 22. The football season begins later in August, with UNLV playing its non-conference schedule and the start of the National Football League’s preseason.

Financing is not an issue, said Jeremy Aguero, a principal in Las Vegas advisory firm Applied Analysis, which is assisting the Las Vegas Stadium Authority.

Allegiant Stadium is being partially financed with $750 million generated by hotel room taxes from Strip resorts. Even with the casino industry closed for a minimum of 30 days and an anticipated slow ramp-up when the green light to reopen is given, Aguero said there is still plenty of money in reserves to finish the 65,000-seat glass-domed stadium.

“The Stadium Authority is currently sitting on an 18-month room tax reserve,” Aguero said in an email Thursday. He said the revenues available through the fiscal year should be sufficient to cover all bond costs, even with additional funds allocated to the debt service.

“The reserve would be available to cover any shortfall in fiscal year 2021 or future years,” Aguero said.

Construction is also moving forward on the 1.4 million-square-foot convention center expansion on a site along the northern end of the Strip. Las Vegas Convention and Visitors Authority spokeswoman Lori Nelson-Kraft said funding for construction had previously been generated and deposited in the project fund.

“The LVCVA raised $900 million through the bond markets and has also made transfers from our general fund amounting to more than the remaining $80 million necessary to complete the project,” Nelson-Kraft said.

Aguero, who also advises the LVCVA, said the bonds for the expansion are secured by the tourism agency’s revenues.

“As a result, they have a very high coverage ratio, something like 3x,” Aguero said. “This effectively works as a reserve, but those funds were not set aside when the bonds were issued. That said, those bonds are also not at any near-term risk.”

The convention center expansion is expected to be completed by the end of the year, in time for the January 2021 Consumer Electronics Show, one of the city’s largest conventions.

Nelson-Kraft said the LVCVA is working with the contractor to ensure proper social distancing and other health and safety measures are in effect at the construction site.

Circa, which is expected to open in December, still has construction workers on-site, said a spokeswoman for developer Derek Stevens, who has not divulged a budget for the first ground-up resort development in downtown since 1980.

The two-level, 7,000-square foot casino will have 1,350 slot machines and 48 table games, and 700 hotel rooms.

The 3,500-room Resorts World Las Vegas, being built by Malaysia-based Genting Berhad, is expected to open next July on the Strip.

In a statement, property president Scott Sibella said he is working with the development’s construction contractor, W.A. Richardson Builders, “to ensure appropriate measures, including social distancing and good hygiene practices, are being taken to protect the health and safety of our workers while they remain on site.”

Sibella said employees who work in closer quarters, such as the administrative offices, and who can perform their jobs remotely, are required to work from home.

“This is a constantly evolving situation and we will continue to evaluate and take direction from local, state and federal health authorities to determine appropriate next steps,” Sibella said.

It was unclear if construction on one other project, the $1.66 billion MSG Sphere, was still in process. The 17,500-seat entertainment center is being built behind the Venetian by Madison Square Garden Co. on a site owned by Las Vegas Sands Corp. The development is expected to open in 2021.

A spokesperson for Madison Square Garden did not respond to a request for comment Thursday.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.