'Working harder for less money' in Las Vegas, weary host of the Democratic debate

The vacant and abandoned Fontainebleau Las Vegas.

Oct. 13, 2015 3 AM PT

reporting from Las Vegas — When the economy crashed in 2008, Rocky Jones was doing electrical work at the Fontainebleau, a $3-billion casino resort under construction on the Strip.

Before long, banks pulled the project’s loans, builders abandoned the 63-story tower and Jones lost his job. He makes his living now as a handyman and bartends four nights a week.

“Working harder for less money — that’s for sure,” Jones, 34, said outside a Home Depot on the outskirts of town.

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By some measures, the Great Recession hurt Nevada more than any other state. Most of the 186,000 jobs the state lost have returned, but anxiety over economic troubles still runs deep.

Nevada’s incomplete recovery will serve as the backdrop for the first Democratic presidential debate Tuesday in Las Vegas. It’s likely to focus in part on those like Jones who are still scraping by.

“The economy is coming back, but it’s still got a lot of holes,” said Eric Herzik, a political science professor at the University of Nevada in Reno.

The Fontainebleau, one of the tallest buildings in Nevada, stands as a stark symbol of the enduring ravages of the recession. A skyscraper sheathed in blue glass, it was inspired by its crescent-shaped namesake, an oceanfront resort in Miami Beach.

The plan called for 3,800 hotel rooms, a 100,000-square-foot casino and 27 restaurants and nightclubs. The project broke ground in 2007 at the height of the Las Vegas construction boom, when Nevada’s unemployment rate was barely 4%.

Work was 70% done when construction stopped a few years later, putting more than 3,000 people out of work. Unused furniture, rugs and mattresses were auctioned off in bankruptcy.

At night, the tower is a dark blot on the Strip’s skyline. In the daytime, passersby look up at exposed steel beams rusting in the desert sun. A chain-link fence keeps intruders out.

Nevada’s unemployment rate has dropped from its peak of nearly 14% to just under 7%, but that’s still the nation’s second worst after West Virginia. As of August, Nevada was the No. 1 state for new foreclosures, according to RealtyTrac.

Nonetheless, signs of Nevada’s rebound aren’t hard to spot. Along the “Beltway,” a freeway that nearly loops the Las Vegas Valley, bulldozers are once again clearing land for new housing tracts. Some of the developments had been suspended after the crash.

“Things are humming along, and one hopes in a more sustainable way,” said John P. Tuman, a political science professor at the University of Nevada in Las Vegas.

Just down the road from the Home Depot where Jones was buying light switches and a faucet, real estate broker Kyle Wilcox is trying to fill a strip mall where KFC vacated a drive-through after the boom went bust.

Like developers of the Fontainebleau, investors in the mall foresaw growth that never happened. Tourists stopped traveling to Vegas. Casino construction stopped. The housing market collapsed. Jobs vanished, and many of the unemployed moved away.

In the end, no one built most of the houses where KFC’s customers were supposed to live. The strip mall fell into receivership. “For lease” signs are still taped to the windows of about half the storefronts.

“It was a build-and-they-will-come play,” Wilcox said. “That story is all over town. Anywhere on the outskirts is really hurt.”

Sean Pemberton, 35, is one of the lucky ones. He oversees building systems — plumbing, carpentry, electrical and air — at a casino on the Strip. He remembers when the casinos were raking in “money just hand over fist,” much of it spent by wealthy gamblers from China who no longer visit.

“The high roller and baccarat salons are empty,” and the suburbs’ comeback is far from complete, he said, leaning against his black BMW convertible in the Home Depot parking lot.

“This is the most dead Home Depot you’ll ever see on the planet,” he said.

For Pemberton, plummeting home values offered investment opportunities; he flips houses as a sideline. In 2009, he said, he paid $125,000 for the one he’s living in, which the previous owner had bought for $360,000 and lost in foreclosure. After his remodel, he hopes it will fetch $240,000.

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“I’m trying to sell before this big development near Aliante gets built,” he said, referring to a resurrected tract of houses going up near a casino one exit down the Beltway.

For a time, Pemberton said, most of the houses in his neighborhood were occupied by tenants, or were vacant in foreclosure. Now, his neighbors are homeowners. “You’re starting to see more pride-of-ownership people,” he said.

The slow recovery in Las Vegas defines the whole state’s economy. Nearly 2.1 million of Nevada’s 2.8 million residents live in Clark County, which covers the Las Vegas metro area.

With its party caucuses coming up in February — right after votes in Iowa and New Hampshire — Nevada plays an outsized role in presidential nominations. It is also a swing state, with six electoral votes that can be crucial in a close general election.

The economic anxiety evident here has influenced the campaigns of both parties. Republicans Donald Trump, Jeb Bush and Marco Rubio have all proposed tax cuts that they say would spur economic growth.

On visits to Nevada, Democrat Hillary Rodham Clinton and Bernie Sanders, a self-professed Democratic socialist, have pledged economic relief, as they doubtless will again in Tuesday’s debate.

Clinton, at a Las Vegas stop in August, bemoaned the state’s high unemployment. On Thursday, she released a plan to crack down on banking abuses, saying it would “prevent irresponsible behavior on Wall Street from ever again devastating Main Street.”

In August, Sanders, a senator from Vermont, reminded supporters at a Reno rally of his pledge to raise the federal minimum wage to $15 an hour. “We are going to create an economy that works for working families, not just billionaires,” he said.

William Johnson, 23, wants the minimum wage to rise even higher — to $20. He gave up his job repairing garage doors in Las Vegas because his commissions didn’t cover the $1,000 monthly mortgage payments on his house.

He and his wife, Carolyn, plan to move soon to Reno, where Johnson, now unemployed, hopes to find work at a new Tesla plant. They’re going to try to keep their Las Vegas house and rent it out.

“We’ve come so close to going broke, we’ve thought several times about letting the house go to foreclosure,” Johnson said outside a Filipino restaurant where they were eating lunch.

Jamie Shanklin, 49, is adjusting to a lower quality of life in the recession’s aftermath. She and her husband gave up their Las Vegas house in a 2008 foreclosure — four bedrooms, 1,702 square feet, she recalled during a run to buy bathing suits at a Sears a couple of miles east of the Fontainebleau.

At the time, Shanklin was a stay-at-home mom raising six children. Her husband, who worked as a Teamster setting up display floors at trade shows, broke his leg and could not go to work, and the couple fell behind on mortgage payments.

Shanklin’s husband is back to work, and she’s taken a job in home care. They made their way through bankruptcy and now manage the monthly rent of about $1,000. But that leaves them with no savings.

“Nobody,” she said, “can make it on what they’re being paid.”

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Twitter: @finneganLAT

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