Vegas Growth and Redevelopment Areas
July 2, 2020
By April Huynh
Las Vegas is an exciting city to live or own real estate in. Due to the nature of the famous Las Vegas Strip, which requires constant innovation to remain in the forefront of the entertainment world, city officials are ultra-forward in their thinking with regards to accommodating the city’s ever-changing landscape.
A (Very) Little Vegas History Lesson
Originally under Mexican rule, the area that is now Las Vegas was occupied by native Americans and only the hardiest of plants and wildlife. In 1848, the war with Mexico ended and Las Vegas came under American control.
The city itself had its beginning in the form of a Mormon settlement and then the rush to mine silver. (Till this day there is still a large part of the population that are members of the Latter Day Saints, also known as Mormons.) Due to the prevalence of silver found in the region, mining operations were established during the mid 1800’s. Mining is still important to Nevada’s economy till today. No wonder the state is known as the Silver State.
“At that time silver was literally shoveled off the ground in Nevada; heavy gray crusts of silver had formed on the surface of the desert over millions of years and were polished by dust and wind to the dull luster of a cow horn (called ‘horn silver’). A big silver bed could be tens of meters wide and more than a kilometer long…The Nevada Mining Association credits silver deposits as the key to statehood and a driving force in the state’s economy in the mid-nineteenth century,” states the website, thermofisher.com.
In time, on May 15, 1905, Las Vegas officially was founded as a city. This occurred “when 110 acres (45 ha), in what would later become downtown, were auctioned to ready buyers. Las Vegas was the driving force in the creation of Clark County, Nevada in 1909 and the city was incorporated in 1911 as a part of the county,” states Wikipedia. This development was aided by the opening of a railroad that linked Los Angeles and Salt Lake City.
With the establishment of additional rail lines, Las Vegas began to grow quickly. Ironically, on October 1, 1910, “shortly after the city's incorporation, the State of Nevada reluctantly became the last western state to outlaw gaming. This occurred at midnight, when a strict anti-gambling law became effective in Nevada. It even forbade the western custom of flipping a coin for the price of a drink, “ added Wikipedia.
It wasn’t until 1931 that Las Vegas really began to take the shape that it is now. This was due to the construction of the Hoover Dam, which drew thousands of men who came looking for construction work, raising the city of 5000 inhabitants five-fold, to 25000. This singular fact resulted in the creation of big-time entertainment to meet the needs of the male workers -- and today’s version of Las Vegas was born. Local businessmen and mob crime families quickly delivered showgirls theaters and casinos for the entertainment of the men who were there for work and, as they say, “the rest is history.”
The Next 60 Years
Las Vegas, probably like most cities, grew from old Downtown outward in every direction. Incidentally, if you look at a map of Las Vegas and put a pin in the center of the downtown area, you would come pretty close to where the Stratosphere (which indeed looks like a gigantic pin) is located. As the industries that caused the rise in Las Vegas began to grow in the next few decades, the city’s population grew accordingly, pushing the city’s boundaries from the inside out. Therefore, the closer you get to the center of the cities, the older the homes are.
Like all cities, there are pockets and areas of town now that have suffered over time due to demographic changes of the neighborhoods, leaving homes in these areas needing revitalization. As out-of-town folks moved in, they were attracted to the brand new or newer subdivisions all over the city, opting to live in nice outer neighborhoods rather than the older downtown smaller homes or multi-unit developments nearer to the Strip. Additionally, the market crash of 2008 made Las Vegas ground zero as the poster child for all things gone wrong in a massive real estate bubble burst, resulting in thousands of foreclosed homes in all areas.
Due to these factors, city officials and business owners have launched a couple of major projects to revitalize the downtown and other areas. One such project was DTP, a passionate and personal project spearheaded by Zappos.com CEO Tony Hsieh started in 2012 with a 5-year plan to completely renovate downtown. For the most part, the project looks to be a success, despite some rocky times through the years. Injecting hundreds of investment dollars into this area has transformed old downtown Las Vegas into a hip and modern hot spot for many.
“DTP allocated $350 million toward revitalization, with $200 million in real estate and development, $50 million in small businesses, $50 million in tech startups through VegasTechFund, and $50 million in arts and culture, education, and healthcare. The $200 million to real estate and development includes approximately 45 acres of land in and around the Fremont East and East Village Districts, and approximately 11 businesses that we wholly own and operate,” states the dtplv.com website. DTP has since “invested in more than 100 tech businesses, with about half of those businesses located in downtown... Additionally, about 40 percent of the investments were made in businesses helmed by women.”
Another project initiated by The Redevelopment Agency (RDA) since 1986 is "to revitalize downtown Las Vegas and the surrounding aging commercial districts. The RDA works with developers, property owners and the community to recruit businesses, create new jobs, eliminate blight and diversify our economy,” as found on the LasVegasNevada.gov website.
At this time, there are two development areas. Both are completely funded from new property tax revenue called a tax increment that is generated exclusively through higher property values, as well as new construction within the city's two Redevelopment Areas.
According to the website, these two Redevelopment Areas are:
Redevelopment Area 1 encompasses 3,948 acres. The area generally includes the greater downtown Las Vegas area east of Interstate 15, south of Washington Avenue, north of Sahara Avenue and west of Maryland Parkway. It also includes the corridors along Charleston Boulevard, Martin L. King Boulevard and Eastern Avenue.
Redevelopment Area 2 spans almost 1,050 acres covering Sahara from Interstate 15 to Decatur Boulevard, Charleston from Rancho Drive to Rainbow Boulevard and Decatur from Sahara to U.S. 95.
In conclusion, Las Vegas offers investors with many opportunities. Within the Redevelopment Areas or Downtown Project an investor can find hidden gems or diamonds in the rough in multi family units or older homes that need rehabbing, provided they are willing to wait for strong gains down the road. However, if investing in aging areas is not something you can stomach, perhaps solid and steady growth in newer and attractive massive communities such as Southern Highland, Summerlin, Rhodes Ranch, and Green Valley (in Henderson) might be for you. My experience in these areas is that they draw higher income earners who compete for these homes, resulting in quick rent, often accompanied by multiple applications.
If I can be of assistance to you to find the right properties for you, please contact me.