Report says LV growing too fast

Las Vegas has earned countless plaudits from national magazines for its warp-speed economic growth.

But one publication says Southern Nevada is expanding too quickly for its own good.

The July/August issue of Fast Company, a magazine that covers emerging trends in business, gives Las Vegas low marks for its rapid growth, asserting that an economic emphasis on low-skill labor will combine with ecological disaster to rein in the city’s future success.

Fast Company’s editors call Las Vegas "an environmental pileup in the making," and they ask whether local casinos can "find enough water to fill all those pools."

For businesses considering investing in Las Vegas, the magazine concludes, the risks outweigh the potential benefits.

"We worry about the environmental train wreck that could be approaching, with the sheer toll of population growth and building," said Keith Hammonds, executive editor of Fast Company. "But the more important question for us is about talent. If you have rapid population growth and business growth without a corresponding expansion of talent and the capacity to attract more talent, you’re headed for a future with low income and low quality of life."

Fast Company’s analysis hinges on three factors: technology, measured partly by the number of patents issued and the number of high-tech employers in a market; talent, or the share of a city’s population employed in high-skill, "creative-class" sectors such as engineering, science, publishing and academia; and tolerance, a diversity measure that considers indicators such as an area’s racial integration, percentage of gays, share of foreign-born residents and proportion of artists, musicians and entertainers.

Las Vegas fared well on two fronts, ranking No. 46 out of 330 cities in technology and No. 69 in tolerance.

Talent, however, is another story.

For the number of residents employed in knowledge-based jobs that require a university education, Las Vegas ranked No. 325.

What’s more, Las Vegas ranked No. 50 out of 50 cities on Fast Company’s City Vitals index, which looks at the percentage of people ages 25 to 34 who have four-year degrees. The portion of college-degreed young people in Las Vegas is 2.5 percent, compared with 7.9 percent in No. 1 Raleigh-Durham, N.C., and 7.1 percent in No. 2 Austin, Texas.

"The talent base in Las Vegas is not college-educated, it’s not young and it’s stuck in low-income jobs," Hammonds said. "That is not a recipe for economic sustainability. At the same time, you’re getting remarkable population growth and a building boom. We worry about the quality of that growth if it’s not supported by expansion of the talent base."

Local gaming executives and business leaders say Fast Company’s forecast of Las Vegas’ prospects doesn’t hold water.

"Twenty years ago we were answering the same question (about whether the city would run dry)," said Pat Mulroy, general manager of the Southern Nevada Water Authority. "This is cyclical. Every two or three years, somebody says Las Vegas is going to run out of water."

The water authority is working to procure water supplies beyond Southern Nevada’s Colorado River allotment. The authority plans to build 285 miles of pipeline across east Nevada to carry water to Las Vegas; its officials have requested a January hearing seeking access to more than 11.3 billion gallons of groundwater a year from Lincoln County to serve nearly 120,000 homes, and the state engineer in April granted the authority the right to tap almost 20 billion gallons of groundwater annually in White Pine County, 250 miles north of Las Vegas.

Besides, Mulroy said, Las Vegas gets it water from the same basic sources as Phoenix, Salt Lake City, Los Angeles and other Southwestern cities, and any water issues that hit Southern Nevada will affect all the region’s markets.

Gaming executives also note that the resort sector isn’t a major local water user — it consumes 6.7 percent of Southern Nevada’s water, while residents use 59 percent of the area’s water, according to numbers from the Colorado River Water Users Association.

"The companies that operate here, and their shareholders, still see Las Vegas as a great investment opportunity," said Bill Bible, president of the Nevada Resort Association. "They see a bright future, and the believe the growth and the positive regulatory and tax climate will continue."

They’re also keenly sensitive to environmental issues in general, said Gordon Absher, a spokesman for MGM Mirage.

MGM Mirage’s 18 million-square-foot CityCenter, under construction on the Strip, will be the largest project in the nation built to the standards of the U.S. Green Building Council’s Leadership in Energy and Environmental Design program. Also deploying green-construction methods on the Strip are Boyd Gaming Corp., which is building Echelon on the former Stardust site, and Wynn Resorts Ltd., which is building Encore at Wynn Las Vegas.

"Some of the most aggressive environmental steps in areas such as green building are being taken right here in Las Vegas," Absher said.

As for the creative class in Las Vegas, it’s thriving, say local professionals.

Cara Roberts, a spokeswoman for the Las Vegas Chamber of Commerce, said Las Vegas is drawing the world’s top chefs and restaurateurs, as well as legions of entrepreneurs launching small businesses and tech companies. It also has a nascent alternative-energy sector, as investors flock to Nevada for its solar and geothermal potential.

"We’re a city founded by problem-solvers who have, in a very creative, enterprising and innovative way, built an international city in very short amount of time," Roberts said. "Las Vegas attracts people whose hard work and ingenuity will continue to drive our economy."

Fast Company doesn’t completely snub the Southwest United States. The magazine lauds Tucson, Ariz., as a "startup hub," and calls Salt Lake City an "urban innovator" where officials are cultivating "a more open, human feel that attracts newcomers — among them traffic-weary Californians — to the city center."

But some of the magazine’s criteria, including obscure indicators such as the number of ethnic restaurants or the ratio of live-music fans to cable-television subscribers, raised eyebrows.

A more useful measure of a city’s economic vitality would be its job market, Bible said.

"Instead of worrying about cable-TV subscribers, they should be more concerned about the ratio of employed to unemployed, and the opportunities to find work," Bible said. "A lot of people see Las Vegas as a place of great opportunity, and a place with meaningful, well-paying jobs that have good benefits."