The national credit crisis has hit all sectors of the development community from housing to office to retail.

The postponement in August of Boyd Gaming's Echelon, which was under construction when it was halted, reflects the tough conditions in securing financing.

The current environment is going to create challenges for all sectors of the economy, especially the development community that needs capital, said Brian Gordon, a principal with Applied Analysis. Not only have there been delays in projects on the Strip, but projects valleywide could be pushed back because of limited access to capital, he said.

"There are a number of planned office, retail and industrial projects throughout the valley that are not only competing with existing product on the market today, but also with financial markets for limited capital," Gordon said. "That will likely cause a shift of timing or cancel plans altogether."

Even with a bailout, it will take time before financial institutions would be able to lend again, Gordon said. And it is yet to be determined what the full effect of a bailout package would be, Gordon said.

"With above-average vacancy and soft demand, there is a multitude of factors against many of these projects moving forward already," Gordon said.

Keith Schwer, director of UNLV's Center for Business and Economic Research, said history has shown a lack of available credit in the system will cause a large economic contraction, which includes job loss.

Las Vegas has been at a greater risk than the rest of the country because its housing meltdown was greater than the rest of the country's with homeowners losing more value. The city is also at risk because it relies on tourism and any economic slowdown cuts into travel.

"I think it will definitely help us by providing a significant amount of liquidity," Schwer said. "The downside of the argument is who is going to pay for this? But the answer is that if we wait too long, we are going to find ourselves in a serious economic downturn."

John Restrepo, an economist and principal of Restrepo Consulting Group, said the effect has been deep already since banks haven't renewed lines of credit, and there is growing difficulty getting loans for new projects.

Restrepo also said even with a bailout it will take time for money to flow through the system, and no one knows how many hundreds of billions of dollars it will take. In the meantime, he said he thinks the existing economic slowdown will be protracted.

"It all depends on whether there is enough infusion to make lenders comfortable lending again," Restrepo said. "Even with the infusion of capital, it will depend on the type of project. It may be more difficult to get office financing because of a higher vacancy rate, but easier for retail and industrial. It will be determined on a project-by-project basis."

Restrepo said he's concerned commercial real estate will face the same problems as the housing market and there will be a large number of foreclosures. That would put a recovery even further off.

Tim Sullivan, president of Sullivan Group Real Estate Advisors, said the housing market stands to benefit from a bailout. Without any government intervention, credit would tighten even more out of fear. Liquidity is the grease to keep the economy moving and without the flow of funds, there can't be any buying or selling of assets, he said.

"I don't think anyone knows what is the right solution, but my point is that the one positive element is that it at least offers some stability or perception of stability," Sullivan said. "That instills some blanket of confidence in the marketplace."

Many homebuilders have had their lines of credit called back from the banks even when they are in full compliance with their loans, Sullivan said. Without that access to capital, they have to cut back their operations and halt projects. It has been a challenge for six months and gotten progressively worse, he said.

Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association, said in addition to all the challenges homebuilders face when it comes to lenders, the current crisis makes it tough to sell a home when someone with a credit score exceeding 700 can't get a mortgage.

The financial crisis has had an effect when it comes to sales of new homes, which have been down sharply the last half of September, said Tom McCormick, president of Las Vegas-based Astoria Homes.

"I think all of this is scaring people from purchasing a home, and when we don't sell homes that constricts our cash flow," McCormick said.

The failure of Silver State Bank prevented Astoria from getting a loan to proceed with a 500-home development in Henderson, McCormick said.

Alex Edelstein, chief executive of Gemstone Development, the developer of Manhattan West condominium mixed-use project, said he's also worried about the lingering credit crunch and ability of buyers to get the mortgage they were expecting.

As for his project, Edelstein said he obtained the capital last year for the $189 million first phase that includes 236 units, 150,000 square feet of office space and 50,000 square feet of retail, but lending has since dried up to go forward with any new projects.

"Lending has pretty much dried up the last 90 days, and so developers have to bring more equity to the table to try and get a building built," Edelstein said. That includes projects where there would be demand such as apartments and assisted living centers, he said.

If the bailout is successful in taking huge amounts off banks' balance sheets, lenders will be in position to raise money from investors, Edelstein said. They won't be afraid the banks will be wiped out, he said.

"I am a hard-core free-market guy," Edelstein said. "I don't like government intervention, but it is the right thing if it is executed well. If they do nothing, we will go into a prolonged depression that essentially will be caused by cascading economic contraction as companies that can't borrow money are forced to lay off and shrink."

Edelstein said he's an example of the benefits of a bailout because if he is able to secure financing for his second phase, that would result in the hiring of 500 people to work 14 months and pump $20 million into the local economy. That will increase the property tax based by $1 million, he said.

Associated General Contractors of America, the nation's largest commercial construction association, backed a bailout to help restore liquidity, stability and confidence in the financial markets and restore credit to finance construction projects.

Steve Holloway, executive vice president of the group's Las Vegas chapter, said he's seen a large number of projects that have permits, but are not moving forward because of the lack of financing, especially smaller projects off the Strip.

Even though he thinks a bailout will make construction loans more readily available, Holloway said that's not the only problem to overcome with any rebound.

"Housing usually leads us in a recession and something needs to be done with housing to take us out of this recession," Holloway said.

Kirk Boylston, regional director of EJM Development that is developing the Arroyo mixed-used project in the southwest valley, said his company has not had difficulty in getting its financing, but said it is difficult for many others to obtain construction loans now.

"Lenders don't have money to lend, and they are not inclined to lend for speculative developments," Boylston said.

The lack of capital not only affects developers directly but if prospective tenants lose their line of credit, they don't have to money to expand or move into a new building, he said. That is especially true for companies that did business with Silver State Bank, Boylston said.

"It is one big clog in the pipeline right now," Boylston said. "It is hurting everybody, and it is going to have be worked through, and it is going to be painful. There is no quick fix. There are already a lot of issues to work through. There is plenty of office sitting out there (vacant)."

Kyle Nagy, director of CommCap Advisors, a Las Vegas mortgage-banking firm, said it continues to become tougher and tougher for developers. Two years ago lenders required developers to put up 15 percent of the project, but today that is up to 25 percent to 30 percent, and developers don't have enough equity to contribute.

Many regional and local lenders are not considering loans for clients unless they have a deposit relationship of 10 percent to 15 percent of the project, Nagy said.

It is not just the cost of the loan, but lenders now want developers to have 50 percent to 60 percent of a project to be preleased compared with as little zero percent to 20 percent in the past, Nagy said.

"This is a credit crunch and not a fundamental real estate problem," Nagy said. "Real estate is still doing well. Vacancies may be up and rents are soft, but it is not like we have a lot of vacancies up and down the street."

Brian Wargo covers real estate and development for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4011 or at wargo@lasvegassun.com.