Fallout: The Financial Crisis

Struggling Nevada town takes a gamble

Bob Moon Apr 23, 2009
HTML EMBED:
COPY
Fallout: The Financial Crisis

Struggling Nevada town takes a gamble

Bob Moon Apr 23, 2009
HTML EMBED:
COPY

TEXT OF STORY

Bob Moon: Life on the edge of a cliff is nothing new for Mesquite, Nev. It’s a town set among some spectacular red-rock bluffs right along the Arizona border. Through the years, it’s been a rendezvous point for my family, on the highway out of Las Vegas to points north and east.

The laid-back lifestyle is an attraction for gamblers, golfers and retirees. But lately, it’s way too quiet. Tourism’s down a third from last year. The owner of three casinos in town is struggling. And one resort’s already gone dark. The other day I pulled off the road, to check out some familiar surroundings.


BOB MOON: I’ve watched this place go from a tiny little town, to a boom town — and now, a town on the edge. It was right here on this spot, in fact, that I played my very first slot machine, at the age of five.

I can still remember giggling, as my grandfather lifted me within reach of a one-arm bandit. I also vividly recall the crabby waitress who rushed over to enforce the rules and spoil the fun, as the slot machine poured out what to my wide eyes was a river of shimmering silver.

Funny how childhood memories end up being bigger than life. Actually, way back then Mesquite was hardly more than a tiny blink-and-you’ll-miss-it refueling outpost in the desert. Its early Mormon settlers turned the bright red soil here green with alfalfa to supply their horse ranches.

Later, slot machines were treated almost as an afterthought. At least that’s how Alan Green remembers it. His father-in-law, Si Redd, took over a sleepy truck stop back in the early 1980s, and discovered to his amazement that the previous owners didn’t seem to think of gambling as part of their business plan.

ALAN GREEN: Si always thought it was kind of funny that when he bought it, it had 23 slot machines and only half of them worked. And he realized that they were such good Mormons, they didn’t want to see people gamble.

The modest property became a full-service resort called “The Oasis.” A rival developer, named Merv Griffin, built another resort across the street. And, a third casino operator eventually bought control of all three properties.

Then came a fourth resort.

Alan Green, who ran the Oasis for several years, concedes the casino rush was dizzying.

GREEN: Maybe too many too fast. Oversaturation.

Suddenly, tiny Mesquite became Nevada’s fastest-growing city — and for a time, the fastest-growing small town in America. In barely a decade, the population soared from a few hundred to nearly 20,000.

And then, quicker than it came, the boom suddenly went bust, capping a ruinous year for the whole state’s gaming and tourism business.

Breathless Las Vegas newscasters reacted to the surprise mothballing of the Oasis casino as if the whole community had just rolled snake eyes.

NEWSCAST: Five hundred jobs at the Oasis will be cut.

NEWSCAST: The city is worried that the layoffs will be disastrous.

NEWSCAST: In a small community like Mesquite that relies heavily on the casino industry, it creates fear citywide.

MAYOR SUSAN HOLECHECK: First your stomach lurches.

That’s Mesquite Mayor Susan Holecheck.

HOLECHECK: You have this almost crushing sense: How are you going to be able to get these people into jobs, and how quickly can you do it?

The added worry in a small town like this is that the sudden loss of 500 jobs can fast lead to more layoffs. A Denny’s restaurant worker named Laura, for example. Only a week after the nearby casino shut down, she lost the job she had just found.

She spoke to me through a case worker at the local family services center.

CASE WORKER: She only worked the first week of December.

MOON: She was laid off just that quickly?

CASE WORKER: After the second week, she no longer was back to work, she was let go. Laid off.

The deeply-in-debt casino operator, Black Gaming, is still struggling to hold off creditors and keep its two remaining resorts in town going, and the company still hopes the Oasis can be saved. But when attorney Chris Kaempfer went before a city council meeting representing the town’s biggest single employer, he could offer no promises at all about the future.

CHRIS KAEMPFER: Anybody who stands up here and gives you any kind of guarantees is doing themselves a disservice and you a disservice. And we will not and cannot do that, because of the uncertainty and changing nature of this economy.

By now, you might imagine a city reeling in fear that it could end up becoming a modern-day Nevada ghost town. But the mayor insists you’d be as wrong as those naysayers who counted out the first settlers when flash floods washed them away.

HOLECHECK: The people who kept coming to Mesquite were the people who said, “Gosh doggit, we’re going to keep trying!”

And with that, the city’s economic development director Bryan Dangerfield takes me out to see Mesquite’s own stimulus plan — heading over one of the city’s three highway crossings.

BRYAN DANGERFIELD: This is kind of the middle connector, so you don’t have to go from one end of town to the next just to get over the freeway.

MOON: I remember when Mesquite used to have one connector.

DANGERFIELD: Yeah, you’re showing your age.

Dangerfield shows off the city’s popular golf resorts and a sprawling Sun City retirement development that’s forging ahead with strong sales.

DANGERFIELD: Do you want to get out real quick?

MOON: Sure.

But it’s this newly-planned attraction the town’s just landed that my tour guide hopes will bring even more visitors.

DANGERFIELD: This Desert Falls project is every sports person’s dream.

In the days after the big casino layoff, Mesquite saw the chance to catch a lucky break. The city just committed to selling a big block of land, for a $500 million international sports training and tournament complex. Dangerfield envisions pro and amateur teams and athletes flocking to games, camps and clinics. And he sees some even more immediate benefits in the construction jobs that’ll be created.

No matter that it’s such a huge commitment at such an uncertain time.

DANGERFIELD: You know, sure we’re concerned, but now is the time to do. Now is the time to take the chance and to be ready when the economy comes back.

Dangerfield says history shows those who stay in the game, even through tough times, come out ahead. So city leaders consider it a safe bet on their economic future.

In Mesquite, Nev., I’m Bob Moon for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.