“If anywhere is emblematic of the debt-fuelled extravagance of the past decade, it is surely [X], which strove to have the tallest, the biggest and the best of everything.”
They’ve just got to be talking about Las Vegas, right?
No, it’s Dubai. This is its very own version of CityCenter — Burj Dubai — one final reach for the sky before the emirate’s deranged construction boom goes into hibernation, the proverbial house built on sand. (Heck, Vegas almost got its own version in the form of the Burj Dubai-inspired Crown Las Vegas, one of many James Packer-backed ventures that came to naught.)
The resemblances don’t end there. The companies of which Dubai World might have to divest to stay upright including some awfully familiar Strip names — like MGM Mirage, Barneys, Cirque du Soleil and Deutsche Bank. In fact, if you look at this photo timeline (“The City on Crack“), what does the accelerated evolution of the Dubai shoreline look like? The Las Vegas Strip, that’s what.
Going further, Dubai’s post-1998 growth model sounds suspiciously like a coked-up version of what was to happen on the Strip just a few years later. Hmmmm …
Whatever gave Boyd Gaming, Cosmopolitan, Harrah’s Entertainment, Fontainebleau, El Ad Properties, Triple Five, Morgans Hotel Group, MGM Mirage, Crown Ltd., Sol Kerzner, Colony Capital, Columbia Sussex and Station Casinos the cockamamie notion they could all build multi-billion-dollar resorts simultaneously (to say nothing of the 70-100 projected condo towers they and other developers were projecting) and it would be nothing but an economic boon? Could the execs in question have been taking their cues from … Dubai?
After all, both destinations were metamorphosing into getaways for the filthy rich, growing on borrowed money and a vast supply of emigré labor. Vegas offered low taxes, Dubai proffered no taxes. Plus valet parking. Dubai was even viewed as an islet of comparative libertarianism — provided you didn’t have sex in public, in which case you could forget about due process. Sort of like being an advantage player back here.
So Dubai is literally crumbling back into the ocean from which much of its acreage was stolen. Its unsustainable growth, preposterous architecture and general aura of fantasy run amok stand as an expensive cautionary tale. Its debt-repayment schedules make those of Harrah’s and MGM seem a walk in the park. The current state of affairs in Dubai, though, looks uncomfortably like present-day Vegas writ large. So the next time we feel the urge to follow a bunch of decadent petrocrats off the deep end — in the immortal words of Nancy Reagan — just say, “No.”
The dark side of Let’s Make Deal. Hey, there’s a dark side to everything, man. Getting on the Tropicana-hosted show is easy. Getting paid … not so much.
With all due respect to casino mogul and creative mastermind Steve Wynn (left), on the subject of high taxes, he needs to STFU stat. A new study by the Institute on Taxation & Economic Policy shows that Wynn’s comfortable Nevada lifestyle is bankrolled by — not to put too fine a point on it — his employees and those of his casino confreres. Your minimum-wage workers, those bringing in $21K/year or less, see 9% of their income sucked up by taxes. Those of us in the $34K-$53K bracket (i.e., still making less than a Wynn Resorts pit boss) are forking over 6%-plus. But somebody like Sheldon Adelson‘s Two Million Dollar Man, Las Vegas Sands President Michael Leven, pays but 1.6%.
This, of course, is the legacy of a revenue system one of whose two primary pillars (the other being gaming revenue) is sales taxes. And when the preponderance of your tax burden falls on those with the least discretionary income and Nevada retail sales are on a two-year-plus slide, is it any wonder that the Silver State scarcely has a pair of wooden nickels to rub together?
Ah, but Dubai’s construction workers are treated much worse than ours are. Well, ours that didn’t die in gruesome CityCenter accidents.
http://news.bbc.co.uk/2/hi/uk_news/magazine/7985361.stm
That page full of projects is largely full of concept art, and some, probably a lot, of the things there didn’t entirely get off the ground. Burj Dubai exists, and they got one of those palm tree islands launched (with Kerzner’s Atlantis recreated at the heart of it), but the two others will probably not be finished, and according to a recent report The World is sinking into the ocean:
http://www.guardian.co.uk/world/2009/nov/29/dubai-world-desert-gulf-investors
Hurm. I guess I missed that second link showing up in your article.
Taxes: I wonder how much sales taxes Wynn paid for his $multi-million art collection. Seems to me that he swung some kind of deal with taxing authorities when he opened the “public museum” in one of his resorts wherein he basically “sold the collection to himself” and got a bunch of tax benefits for himself.
I wonder if he paid any sales taxes to any entity when he bought the paintings the 1st time.
It’s been more than a decade, so I don’t remember the details but Wynn jawboned the Lege into crafting a loophole that exempted his art collection from taxes, provided that he occasionally let schoolkids see it for free or something like that. This sparked a brief fear that Caesars Palace would try to get its statuary reclassified as “fine art” and claim a tax exemption, too.
Here was the problem with all these companies announcing their multi-billion dollar projects: the only person in Las Vegas who has built more than one multi-billion project and been successful is Steve Wynn. That is why his name is on his $2.7 billion dollar casino. MGM Mirage has the $8.5 billion dollar City Center which will be completely open in the next couple of weeks, except for The Harmon.
Onto the condominium fiasco, aka The Manhattanization of Las Vegas. Of all the articles I read about this mirage in the desert my favorite is \Onward and Upward\ from the Las Vegas Sun from August 28, 2004. The article states, \There’s plenty to buzz about with 50 high-rise projects, totaling 82 towers, announced or on the drawing boards.\ My favorite quote in this article is this: Developer Lorenzo Doumani said many of the projects announced won’t ever break ground. \A lot of them are b.s., with no real plans or anything,\ he said. \It’s amazing all that’s been announced, but nothing has happened.\ Mr. Doumani had his own condominium project next to the Riviera called Majestic Las Vegas—> which of course was not built.
Once the above mentioned $8.5 billion dollar City Center was announced in November of 2004 (I think it has over 2000 condominiums) the condominium market and the Manhattanization of Las Vegas went into the gutter as fast as Tonya Harding’s ice skating career did after \The Gillooly Gang\ kneecapped competitor Nancy Kerrigan at a practice session during the 1994 U.S. Figure Skating Championships.
In my opinion one of the smartest casino owners in Las Vegas is Phil Ruffin. He bought The Frontier in 1998 for $167 million dollars and in May of 2007 sold it for $1.2 billion dollars to El Ad Properties for a profit of over $1 billion dollars. Then he bought Treasure Island for $750 million dollars from MGM Mirage in December of 2008. This deal also helped MGM Mirage finance the $8.5 billion dollar City Center. Remember, patience is a virtue.
Obviously the \ above meant to be quotation marks. I thought I did it correctly but who knows. Considering I had two English classes in college in which I received a C in English 101 and a D in English 145 it might have been me. What do you expect from a Geography major. I do know what the capital of Djibouti is though. It is Djibouti.