Las Vegas is still a good investment

This first published March 3 2009 in the Henderson Home News website, a Community Newspapers of Nevada publication.

For many of us calling Las Vegas home, it is no surprise that Forbes magazine named it America's "emptiest" city. A part of Las Vegas' unprecedented growth was built on speculation — that is speculation the building boom would last many more years.

Many people speculated by buying multiple homes in hopes of flipping them for a nice profit. How could they resist, drunk on the Kool-Aid whipped up in the sink of the media-spun hyperbole? The house- and land-flipping overinflated the values of real estate, whether commercial, residential or otherwise.

The economic train was certainly chugging away with a full head of steam generated by coal that was no more real than the houses built of cards by overzealous and profit-drunk builders. It wasn't just the builders that were driving the economy under the influence of false prosperity, either. Local governments were also fairly tanked up, too, creating huge parks and infrastructure with future dollars in the form of development fees, while older parks and infrastructure lost priority.

Yes, the Las Vegas Valley has the best of the best anywhere, but it's now waking up from its unbelievable binge at the bowl of tainted punch. The skeletons are visible in the forms of empty building pads, lifeless steel structures and the barren wood frames of unfinished homes.

What about all those empty houses in Las Vegas pointed out by Forbes?

I say, so what? No big deal, unless you own one or two of them. I still believe Las Vegas is a great buy, especially now that some sense of truth in home values is returning to the market.

Some say Las Vegas will never be the same again. To that, I wonder, compared to when? Three years ago? Perhaps not, but it's feeling a lot like 1989 again, and to a native Nevadan, that's not all bad. Life seemed a little simpler then, didn't it?

The construction boom has ended, forcing the skilled and unskilled labor forces to leave to seek greener pastures in other job-barren states. This is not urban flight, either, because Las Vegas is more suburbia than metropolis.

Las Vegas will recover at some point. Folks tired of bitter winters will continue to look at Las Vegas for retirement, because there will be great deals on homes to be found and the weather is marvelous.

If you look close enough, you will find many positive aspects to this mess we're in. We will have more time to address the issue of water and where to get it. It will give us more time to come up with better energy solutions, too. These are important issues in light of the effects of the drought plaguing the West.

It is disturbing enough to think about Lake Mead drying up, but before that happens, Hoover Dam would lose is capacity to produce energy. That is an entirely different crisis brewing.

Still, unlike the naysayers, I know the Las Vegas economy has not totally derailed in a smoking heap. Sure, we are going to suffer for awhile, and many Nevadans will be out of work. But there will be many more who will rise in the new economy.

Now is the time not only for Las Vegas but all of Nevada to start sketching and molding what it wants to be after this economic meltdown.

Las Vegas doesn't have to be the emptiest place in America. What started out as a dusty watering hole on the Union Pacific Railroad was actually a desert paradise with flowing artesian wells that sustained many settlers passing through by the wagon full. Just as it sustained ancient native Americans with the gift of life in a hostile environment, Las Vegas will continue to provide for those who are willing to brush the dust from themselves and pick up a shovel, hammer, trowel or perhaps dig into the ol' cookie jar, if it isn't already empty, to help in this remodeling of our economy.

Perhaps once we get our train moving again, we should slow down enough to pull up a neighbor. Then, in time, we may be the fullest city in America again.

What's that saying? The community that rebuilds together, prospers together, or something like that.

Tim O’Callaghan, co-publisher of the Home News, can be reached at 990-2656 or tim.oc@vegas.com. He writes a regular column for the Home News.

Economic scars will be ever present

This first published February 12, 2009 in the Henderson Home News, a Community Newspapers of Nevada publication.

A few Sundays ago, my bride asked if there was anything I wanted to do that day for my birthday. I told her a bicycle ride on the River Mountain Loop trail at Lake Mead might be fun.

We packed up the bikes and lunch to eat on the way to the trailhead. As we drove past Lake Las Vegas, she noticed the grass was turning brown on the golf course and asked if the course was closing.

I told her I didn’t think the judge had ruled on it yet.

However, according to a story by reporter Jeremy Twitchell, federal Bankruptcy Judge Linda B. Riegle ruled Jan. 15 that Lake Las Vegas can close The Falls golf course at the main entrance of the project.

It sounds as though Lake Las Vegas will let the course dry up and brown out, which would match the rest of the landscape along Lake Mead Parkway. For the record, I don’t think Lake Las Vegas will allow the entrance to lose its luster entirely. I would expect the front of the course, closest to the road, to be kept green.

To my disbelief, however, I noticed how development has encroached upon the desert area heading to the lake, and now that building has stopped, it’s left an unsightly mark.

Developers have scarred the desert mountain landscape east of the entrance toward Lake Mead to an irreparable state.

During the boom of speculation and colossal financial leveraging, developers hacked out giant steps in the hillsides leading down to the entrance of the Lake Mead National Recreation Area, before the economic collapse of 2008.

Now the land stands scarred and undeveloped, ruining the view of the hillsides. The result of unbridled growth and speculation will be around for a while, I’m afraid.

If my memory serves me correctly, our real estate crisis started back in 2002, when the nation was recovering from the terrorist attacks on Sept. 11, 2001.

The spawning of economic recovery through high-leverage financing and interest-only sub-prime loans turned what was just a crisis into economic disaster. Those balloon payments came home to roost, starting the unstoppable domino effect, in 2007.

The housing boom across America created a Pandora’s box for Las Vegas, either unbeknownst or perhaps flatly ignored by most. People were flocking to Vegas either to be entertained or buy real estate.

But how were they able to afford the weekends in Sin City or the purchase of a second or third home in the city where the streets are mythically paved with gold? My guess is they took advantage of those hot mortgage deals and raided the equity in their homes.

The Ponzi schemes people played on themselves in hopes of making a comfortable future for themselves have quickly collapsed — leaving families and businesses financially scarred much like those hills gutted until the next cycle of prosperity hits America.

The real question is, when will that occur? By my account, if we only look at the mortgage crisis, it could be another three to four years if homeowners and leveraged business can’t get refinancing. Sub-prime loans and other risky leveraging were still being transacted in the fourth quarter of 2007. My guess is that we have seen the height of the tsunami but have yet to imagine the carnage when it completely recedes.

Tim O’Callaghan, co-publisher of the Home News, can be reached at 990-2656 or tim.oc@vegas.com. He writes a regular column for the Home News

Some reflection on Inauguration Day

Now that Nevadans are returning from four days of Inauguration festivities in Washington, D.C., I have put together some Inauguration thoughts...

First let's correct the record all over the blogosphere. President Obama didn't mess up the oath. It was Chief Justice Roberts' mistake by first pausing then misquoting the oath, causing Obama confusion. Just in case, they did a do-over in the Oval Office. I'm sure folks will spin and debate this faux pas for years to come, depending on their particular polarization.

There also seems to be a great deal of spin on the cost of Obama's inaugural festivities by comparing the expense to President George W. Bush's second inaugural. Yes, my friends his second, not his first.

Keep in mind this is a very extraordinary inauguration and, more importantly, a historic event with the election of the first African American president. Therefore, I think the pundits should compare apples to apples, not otherwise.

I recall as a young boy in 1974, my dad had been re-elected to his second term as Nevada's 23rd Governor, and he decided, in light of the economic crisis at that time, that it wouldn't be prudent to have another Inaugural Ball. His comment at the time was a breezy, "We already had one." This inauguration, on the other hand, was Obama's first, and he deserved a ball.

The most captivating moment for me was the invocation by Pastor Rick Warren, of Saddleback Church in Lake Forest, Calif., and the author of one of my favorites books "The Purpose Driven Life."

One of the most striking lines in his prayer was, "We celebrate a hingepoint of history with the inauguration of our first African American president of the United States. We are so grateful to live in this land, a land of unequaled possibility, where the son of an African immigrant can rise to the highest level of our leadership."

Warren followed those lines with this reference to the Bible that still echoes in my head: "And we know today that Dr. King and a great cloud of witnesses are shouting in heaven," to which in my mind the voice of Dr. King answered, "Free at last! Free at last! Thank God Almighty, we are free at last!"

At that point, I was at the proverbial mountaintop. But I did not stay there long. Soon I began asking myself, are we really free? Sure we're free in this country to move about as we please, yet I can't help think about how so many people and families are chained to this economic crisis in one form or another.

Are we really free when religious zealots want to impose their beliefs on us, against our will in some cases and with the threat of harm or death? These zealots come from every imaginable faith, not just one or two. There are extremes in every faith.

A disappointment came in the benediction by the Rev. Joseph Lowery, a personal hero of mine from the civil rights movement. Although, he may have intended to poke fun at racial stereotypes, he offended many with this line from his closing prayer: "And in the joy of a new beginning, we ask you to help us work for that day when black will not be asked to get back, when brown can stick around, when yellow will be mellow, when the red man can get ahead man, and when white will embrace what is right."

This was really an unfortunate statement implying that whites haven't embraced other races and cultures. His statement reminded me of the old saying, "the pot calling the kettle black." As offensive as that might sound, Lowery clearly displayed the chip on his shoulder by implying things haven't changed or perhaps not enough. I would disagree with that line of thinking, because things have changed a lot — not perfectly, but you must admit things are getting better in this not-so-perfect multicultural country.

Rev. Lowery may have slightly bruised this historic day, which is the fruit from trees grown from the seeds planted not only by Dr. King and Rosa Parks, but also the very seeds Lowery planted himself in Mobile, Montgomery and Atlanta.

Now let's give our new president a chance to work on this country's difficult challenges.

Tim O’Callaghan, co-publisher of the News, can be reached at 990-2656 or tim.oc@vegas.com. He writes a regular for the Henderson Home News.

Reality checks for a new year

This first published January 15, 2009 in the Henderson Home News, a Community Newspapers of Nevada publication.

Most things in life tend to be cyclical. A good example is the price of a gallon of gas. I’ve always had my own theory about the price of gas and why it goes up and down at certain times of the year.

One theory is that gas gets cheaper in the fall, around the end of October, because this is when the holiday season begins. If gas prices are high, shoppers tend to be tighter, and if this remains true on Black Friday, then gas prices begin to fall even more.

Then miraculously, the prices begin to rise the first week of January, continuing through March. Then in June, the summer march to the top of the price tolerance begins. This past year was a perfect example of that theory, but remember it’s only a theory with no scientific basis to stand on.

The increase in news reports about the rise in gas prices prompted me to reflect on the past year, so I scoured through all my columns and blog entries for a reality check. These columns are available at tocomv.blogspot.com.

Here is what I pulled from the recent past.

April 3, 2008

I wrote:

“For the past six months, I’ve been driving a hybrid that averages 46 miles per gallon and costs about $26 to $30 to fill up. Occasionally, I drive the Big Red Truck for short trips to the hardware and lumber store or to run a quick errand.”

Reality check

I filled it up this past Monday for just over $16 and was happy as can be about it.

I wrote:

“I pulled into the gas station, stuck the nozzle in the receptacle and walked away to give a little TLC to my abused truck by cleaning the windows and wiping down the interior from an accumulation of dust and yellow pollen. After a few moments, I heard the ka-chunk of the nozzle shutting off, giving me the cue to finish up. A quick glance at the pump stopped me in my tracks. I blurted out an, ‘Oh my gosh,’ or something like that, staring at the $93.81 displayed on the pump. I was caught in a sort of ‘Pump Paralysis’ — downright denial or disbelief.”

Reality check

For the most part I have continued to drive the Prius. However, I have driven the Big Red Truck a bit more with the drop in gas prices, but I’m reminded by my bride that it is more cost effective to take the Prius.

I wrote:

“I have to wonder how long will it take before the rising cost of everyday products due to fuel costs overtakes the value of the dividend check and will finally sink in? Profiting from stock investments is not a crime — it is capitalism at its best.”

Reality check

Respectively, it didn’t take long for more folks to complain about the price of groceries. However, did you notice the price of groceries going down with the price of fuel? Uh! I didn’t either.

May 29, 2008

I wrote:

“For years, we have enjoyed less expensive gasoline in our northwest Arizona getaway, primarily because there are fewer local taxes added on than in Clark County, which has plenty.

This was true until this past Memorial Day weekend, when the gouging began. The week before, I had checked our only local gasoline retailer in Arizona, and the price was $3.67 per gallon. Imagine my shock over the weekend when I went to fill two 5-gallon gas containers and the price had jumped to $4.19 per gallon. Heck, that’s 10 cents more than the notoriously high-priced Chevron station across from the Hacienda Hotel between Boulder City and the Hoover Dam.”

Reality check

I still avoid purchasing gas at my local Arizona station, even though I think someone came to their senses and lowered the price. However, I still purchase a few staples there.

Also, the price of gas at the Chevron across from the Hacienda actually fell into line for a while, when prices bottomed out but is now moving up above pace.

Nov. 6, 2008

I wrote:

“Now that the election is over, we can turn our attention back to daily life and economics. One of the most interesting items to speak of is the price of gas. This fall marks the sharpest decrease in prices at the pump in four years.

“According to GasBuddy.com, in December 2004 the average price of regular grade gas in the Las Vegas area was $1.81 per gallon. During the next 3 1/2 years, until June of this year, prices bounced up and down to an all-time high average $4.26 per gallon.

“Since then, the price has dropped an amazing $1.71 to its lowest average since March 2007 at $2.55 and is still dropping.

“I’m no expert, but I would bet the price of gas will start an upward trend sooner rather than later, even if we continue to reduce our consumption in the U.S.”

“Personally, I will continue to reduce consumption whenever possible by planning local errands, fewer trips out of town, carpooling and driving the hybrid whenever possible.”

Reality check

The price of gas has started its trend upward, how high no one knows. Consumption increased with lower prices, but I think the overall economy is keeping us from over indulging.

On the home front, as I mentioned before, we are still keeping our household consumption down and using the savings to offset rising costs of everyday life.

Prescient posting

Coincidentally, while going through last year’s columns, I rediscovered a posting from my blog that may very well explain how Barack Obama was elected. Not exactly, of course, but it could have been a symbolic tossing of the tea leaves when it was sent me by a reader named Pete.

TIM:

I read your article in today’s paper. I suffer from the same problem you have, filling up my Lincoln Navigator and my Sea Ray boat. We differ in the reason for why we are so “dumbfounded.”

I believe it is large part due to oil speculators and greed for profits. I watched yesterday’s hearings on oil and why the oil company’s profits are so high. Naturally, they insisted that they needed the huge profits and basically offered no solution for lowering gas prices. I watched, hoping a senator would ask questions about the price of gas and relate it to prices in the ’70s, ’80s, ’90s and three years ago. No one did, and no one asked why gas outstripped the rate of inflation.

The price of oil is high not because I drive my Lincoln Navigator 100 miles in a month or use my boat two to three times a year. It’s due to lousy speculators that the government doesn’t want to control. You can suggest that I change my habits, but the result will be immeasurable as far as lowering the cost of oil.

Find the right person or business to point the finger at, but blaming the individual misses the mark.

I joke with friends that the presidential candidate who promises $1.99-a-gallon gas will get my vote. As a staunch Republican, voting for a Democrat would be very difficult, but give me gas back at $1.99, and they have my vote.

Thanks for listening,

PETE FERRELL

I don’t think we can credit lower gas prices for getting Obama elected, but doesn’t it raise an eyebrow when you consider the timing?

Conspiracy theories aside, perhaps, in reality, it’s just another cycle in the economy.

Tim O’Callaghan, co-publisher of the Home News, can be reached at 990-2656 or tim.oc@vegas.com. He writes a regular column for the Home News.

Clark County District Attorney commissions centennial seal

The Clark County District Attorney’s office will marks it 100th anniversary on July 3.

According to Assistant District Attorney Christopher J. Lalli, the District Attorney’s office commissioned a special centennial seal to commemorate the founding of the office in 1909.

The silver and blue seal with a banner that reads “A Century of Service” features the Roman Goddess of Justice, symbolizing the office’s primary function as a prosecution office. The will seal will begin to appear on memorandums, letterhead and used in place of the district attorney’s badge where appropriate for the year.

According to Lalli, David Roger is the 22nd district attorney to serve Clark County. In 1909, W.R. Thomas was the first appointed district attorney. O.J. Van Pell became the first elected district attorney on Jan. 1, 1910.

The longest-serving district attorney was Harley Harmon, elected to four terms in the 1920s and ’30s. It was during Harmon’s terms that the elected term of the district attorney changed from two years to four years.

Another interesting Clark County district attorney was George Holt, who after one term in the office decided to run for Clark County sheriff and lost in the primary in 1978. Holt felt the newly consolidated Las Vegas Metropolitan Police Department needed change. Holt was succeeded by Bob Miller, who went on to be elected lieutenant governor in 1986 and to succeed Gov. Richard H. Bryan in 1989 when Bryan resigned to become a U.S. Senator.

The Foleys, a prominent law family of Las Vegas, produced the greatest number of district attorneys in Clark County, starting with Roger T. Foley and followed by sons Roger D. Foley and George Foley.

Yucca Mountain shouldn't be partisan

This first published January 1, 2009 in the Henderson Home News, a Community Newspapers of Nevada publication.

This is the start of a brand new year, and things are looking tough for the rest of it. The economy is taking its toll on America’s families, including those here in Nevada.

The Nevada Legislature is gearing up for the 2009 session, which is expected to be the hardest, if not cruelest, in decades, especially on those without a voice.

One thing that isn’t brand new is the idea of storing the nuclear industry’s waste in Nevada at Yucca Mountain. This plan is getting some attention from the Republican Party of Nevada. Because the economic chips are down, some are willing to sell their souls, or at least the health of their children and grandchildren, for some short-term economic gain.

Last month, the Nevada Republican Central Committee took a field trip to Yucca Mountain to see just how safe it would be to store the deadliest garbage known to man.

For years, the Department of Energy has been waving the money bait in the faces of Nevadans, hoping greed will overcome their good senses.

With the economic collapse of 2008, a no-new-tax governor, a weary gaming industry, broken retirement funds — just to name a few of our aches and pains — a cash infusion might be inviting to some.

The lifeless body of the Yucca Mountain Project, Nevada’s greatest demon, could start to quiver with life at the smell of fear. The fear of economic destitution is a powerful one, so beware.

Former Republican Nevada Gov. Robert List, who has become a nuke lobbyist, led the tour of fellow Republicans. List is the only former Nevada governor to turn against Nevada on this issue.

List’s actions remind me of something my father, Mike O’Callaghan, also a former Nevada governor, wrote in this space in 2002.

“So who are the people supporting this dumping on Nevada?” he wrote. “Generally speaking, they are people who have made a living from some part of the nuclear business, plan to make money from it or are presently making big bucks from it. A large majority of Nevadans who love living in this area and are raising families don’t want any part of having the waste, and all of its obvious problems, on their highways or deposited in a place that science hasn’t been able to support.”

Seven years later, his words still ring true, and Robert List is the poster boy.

The conservative talk radio hosts are claiming that Nevada is snubbing its nose at billions of dollars in economic benefits that could fix the billion-dollar state budget deficit.

I would call that blood money.

More than 70 percent of Nevadans oppose Yucca Mountain, but could the thought of economic prosperity change their minds? The way I see it, that’s what the nuke pushers are hoping for.

For decades, we have recognized Yucca Mountain as being pure politics at the national level, but the sides were split more regionally. States that had nuclear power supported Yucca Mountain. Those that didn’t, opposed it, fearing the trucks hauling waste through their states.

However, this year it has turned partisan in the state of Nevada. Bob List, pushing his influence on his fellow Republicans to attempt CPR on a “dead on arrival” Yucca Mountain Project is deplorable.

Who can forget how President George W. Bush promised the people of Nevada just eight years ago that the project would be based on sound science? Everyone knew the science was flawed, so with that promise, Nevada gave President Bush the votes he needed to win. In turn, he shoved it up our collective promised repository. Today, the science remains flawed.

President-elect Barack Obama has also said Yucca Mountain is dead and, with Nevada being one of the most influential states in the country because of Senate Majority Leader Harry Reid’s clout, we have a sense of security.

That doesn’t mean we can let our guard down for a second, no matter how tough the economy gets. Once you sell your soul, you can’t get it back for 10,000 years, and that’s a long time, even on God’s clock.

My only hope is that the Nevada Republican Party chooses a better path and decides not to risk the health and futures of generations in Nevada to come.

Tim O’Callaghan, co-publisher of the Home News, can be reached at 990-2656 or tim.oc@vegas.com. He writes a regular column for the Home News.

Solutions for a broken economy

This first published December 18, 2008 in the Henderson Home News, a Community Newspapers of Nevada publication.

How many B-2 bombers would it take to bail out the state of Nevada? That’s easy. One and a half would suffice.

I turned on Discovery Channel the other night hoping to catch “How It’s Made.” Instead, I caught the program “Destroyed in Seconds.” I really enjoy “How It’s Made” so much that I can blow a whole evening watching how things are manufactured.

Being of the male gender, I was also a bit fascinated seeing things get blown up while everyone survived. I’m not sure which was more amazing: how quickly something got trashed or the fact that everyone survived.

In the episode I watched, there was a segment showing the crash of a B-2 Stealth bomber. Miraculously, the pilots ejected and only received minor injuries. However, the bomber blew up in flames.

Do you have any idea how much a B-2 bomber cost?

Don’t be concerned, because I asked several of my friends on different occasions if they could tell me how much a B-2 bomber cost. One said, $100 million and another said $200 million. Neither is even close. The closest answer I received was a half a billion dollars, and that isn’t even close.

For fun I asked how many B-2 bombers would it take to bail out the state of Nevada. No one had a clue. It would take nearly two Stealth bombers to dig Nevada out of its budget shortfall at $1.5 billion a piece.

This exercise put a few things in perspective for me, such as the size of the state’s budget shortfall and just how easily the federal government could bail out Nevada.

When you think about the size of a B-2 and the size of our state, the $1.5 billion price tag doesn’t seem that great.

I’m also reminded by the program just how quickly a Stealth bomber can be destroyed and just how quickly budgets can go up in flames. Even more importantly, it reflects how fragile our economic base is in Nevada.

We should be doing everything possible to diversify our economy here in Nevada. There are several ideas being tossed around, such as renewable energy, but will that help in the immediate future to solve our economic woes?

Not a chance, but it’s definitely an option for our long-term future.

Nevada could expand mining opportunities — except we are one of the largest producers of gold in the country as it is. However, we are being pillaged by the mining industry. Unlike casinos, which pay a gross revenue tax on gaming winnings, the mining industry pays taxes on net profits after exemptions.

Since 2000, Nevada miners have extracted more than $25 billion in gold from this state and have put a tiny fraction of that into state revenues.

During 2007, mining operations extracted more than 6 million ounces of gold from Nevada. Next to water, gold is Nevada’s most precious natural resource, and it is being sucked out faster than the waters of Lake Mead. By the end of this year, 8 million ounces of gold are projected to be produced in Nevada, with very little money going into state coffers.

Can you imagine how many B-2 bombers could have been built with the gold extracted from Nevada soil since 2000? The answer is 16. The only thing stealthier than the B-2 Bomber are the mining profits leaving Nevada.

Here in Nevada, where the state budget was “destroyed in seconds” and gaming and mining are “how it’s made,” we need to work together to develop solutions to fix our broken economy.

Smelly tourists

At the risk of my critics calling me a Harry Reid apologist, I should clear the air regarding his recent remarks about being able to smell the tourist coming to Washington, D.C., in the summer.

Well folks, having been to the capital in the sweltering heat and humidity of summer, I can testify to the fact you can, indeed, smell the visitors as they shuffle by the thousands through the halls and galleries. I should know since I’ve been one! So your sweat don’t stink?

What stinks worse than the capital in the heat of summer is the goofy commentators, editors and other media types who took the opportunity to water the already rabid far right. This proves one thing: Sen. Reid has a target on his political back and Republicans such as presidential candidate-turned-talking head Mitt Romney will do anything to keep the heat on.

Fortunately the capital now has air conditioning to keep visitors cool, and most Nevadans will keep cooler heads to keep Nevada the most powerful state in the union by not only returning Reid to the Senate in 2010 but also Sen. John Ensign in 2012.

Gee, all this flap over new air conditioning in the capital and a straight-talking senator from Searchlight, Nev.

Nuff said!

Tim O’Callaghan, co-publisher of the Home News, can be reached at 990-2656 or tim.oc@vegas.com. He writes a regular column at the Home News.