Nevada’s Business Leaders Bring New Tools to the Table
04 Jan, 2013
By David Hodes
Nevada is a state that has been beset by economic turmoil in recent years while slowly building a focused and active economic development effort to help uncover more opportunities.
Some of the state’s legacy economic engines are in the form of natural offerings of the land: mining, wind and solar power. And those helped buoy the state while it floundered from the recession. “The downturn that we saw in the Las Vegas and Reno area we were really seeing a kind of opposite in the more rural areas because of the mining industries,” says Steve Hill, director of Gov. Brian Sandoval’s office of economic development.
Before the recession, Nevada didn’t really have to do a lot of economic development for quite a while, Hill says, because the economy was terrific. “But there is a new focus on that now.”
Hill says the office of economic development has brought some new resources to the table recently, including a deal closing fund. The fund, created by Assembly Bill 449 signed in June, 2011, is a comprehensive bill designed to organize and reform Nevada’s economic development programs and initiatives.
The deal closing fund will be used to close attractive projects that satisfy both the state and regional criteria by enhancing the package assembled and creating high quality jobs by primary industries. “And as we go into this legislative session that starts in February,” Hill says, “we are going to be taking a look at our incentive package and see if we can get it more targeted so that it is responsive and meets the needs of companies in some of the areas that deserve real attention.”
Economic developers see those incentive opportunities as the path for Nevada’s renaissance while the state continues its recovery from an economic downturn that hit the housing and tourism industries hard, contributing to an unemployment rate had been one of the worst in the country. “We are certainly well up off the bottom and I think our trajectory is good,” Hill says. “The governor likes to say that we have turned a corner, but we have not turned the corner.”
Tom Skancke, CEO of the Nevada Development Authority for Las Vegas and the surrounding counties, says that the future of southern Nevada lies in a couple of industries near term. “One of them is medical tourism,” he says — a growing industry where people come to the state for specific medical procedures. That also plays in to the tourism part of the economic picture, Skancke says, because when people come to the area for medical procedures, they stay in the community and generate room tax, sales tax and rental car tax.
Industries and Innovations
Data centers are a hot business for the state. Hill says that the governor’s office announced Apple is in the process of building a $1 billion data storage center outside Reno in northern Nevada. Another company called SwitchNAP Communications is becoming more known and prominent, with a 2-million-square-foot data center in Las Vegas. “They really have the largest and most energy efficient data center probably on the planet,” Hill says. “Their site selector reported back to us that it is such a unique facility that we are actually growing a cluster around that.”
There were three additional data and high-tech related announcements following the Apple announcement in July, including Take Two Interactive Software Inc.
Zappos.com, a shoe and apparel company that grew in Las Vegas, was sold to Amazon.com a couple of years ago. The company recently purchased the old city hall downtown and are moving their company there, where the CEO spent $350 million of his own money to revitalize the area. “Tony Hsieh, the CEO of Zappos, brought new life to an arts district downtown and startup companies downtown, and a culture and vibe to the area that is attractive to other companies,” Hill says. “So we think that that has some great potential to grow a wide variety of technology businesses down there.”
Mining is king in the city of West Wendover. The Bureau of Land Management is preparing an environmental impact statement for Newmont Mining Corp.’s proposed Long Canyon open-pit gold mine to be located in Elko County.
The proposed operations would affect 1,631 acres of public land, including 480 acres of split-estate lands. It’s expected to create approximately 300 to 500 jobs during the life of the mine. “They are hopefully going to become operational in mid-2017, with construction to begin in 2015,” says Chris Melville, city manager and director of community development, West Wendover. “So that will add significant diversification efforts in addition to adding more potential clients to our industrial park with the service companies that work with the mine.”
Talent and Education
There are eight public colleges and universities (including the University of Nevada-Las Vegas with the only dental school in the state); four private colleges and universities (including Roseman University of Health Sciences in Henderson with a second campus located in South Jordan, Utah); and 12 for-profit colleges and universities in the state (including the Le Cordon Bleu College of Culinary Arts Las Vegas).
One workforce program unique to the state is Nevadaworks, a regional agency focused on preparing northern Nevada’s workforce to meet the needs of current and potential northern Nevada employers. It was awarded over $10 million in funding in 2012 to the workforce providers such as the National Careers Skills Institute, Great Basin College, the Builders Association of Northern Nevada and others, and will assist several thousand northern Nevadans gain job skills necessary to compete in today’s marketplace.
Skancke says that an area of global economic development in and around Las Vegas that they want to focus on is logistics and distribution, based on the infrastructure setup. “Because of where Las Vegas sits on the infrastructure grid as it relates to air and rail, and I-15 and the future implementation of I-11 as that freeway is studied and then built, that will change the logistical vision of where our community sits on a global grid,” he says.
Interstate 11, estimated to begin construction in 2017, would connect Phoenix to Las Vegas and potentially expand access north to Canada and south to Mexico. It would create more efficient trade connections between five of the fastest growing metro areas in the United States: Seattle, Portland, San Francisco, Las Vegas and Phoenix. It would connect major trade hubs, existing and future domestic and international deepwater ports, and intersecting transcontinental roadways and railroad corridors.
Skancke says what that development is really about — the improvement of transportation infrastructure with more to come on the Nevada telecommunications infrastructure — is bringing resources together and creating a strategic plan of putting Las Vegas on the global grid of global trade in a global economy. “Our competition is not regional with Salt Lake City and Denver and southern California,” Skancke says. “Our competition is the world.”
Nevada is a mostly rural state, a desert and semi-arid landscape with small towns and basically three large cities — Henderson, Reno and Las Vegas. More than two-thirds of the population of the state lives in Clark County, where Las Vegas is located.
Skancke says he likes to remind people that the community is bigger than Las Vegas. “I like to remind people that we have homes here, we have churches and schools and universities and libraries and parks like every other city,” he says.
West Wendover is an example of a small community in the state with just 7,000 people. But even in this small town, there are five casino/hotel facilities, most of which are under expansion now. Nearby Salt Lake City provides many of the shopping necessities for the citizens of the city, while West Wendover is a gambling destination for Salt Lake City residents.
Hill says though the state has made strides in recent years, there is still much work to be done. “We certainly feel a sense of urgency because of the number of people who are unemployed in the state,” he says. “So we are looking at near term opportunities to help resolve that. And obviously the gaming and mining industries are helping on their own and we are helping them as well.”
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Down to Business
Nevada’s tax structure is one of the most attractive in the nation. There are no personal and corporate income taxes, no unitary taxes, inventory taxes, franchise taxes, estate or inheritance taxes. The state also provides abatements, deferrals and incentives for capital equipment purchases and grants for job training.
Nevada is first among the 50 states for economic development programs in terms of job creation, retention and training.
Nevada is also first among the 50 states for production of non-fuel mineral commodities in 2010, according to the U.S. Geological Survey; and for geothermal developments, according to the Geothermal Energy Association.
Outdoors and Recreation
Although the Sierras feature the state’s highest point, 13,143-foot Boundary Peak, Nevada has other significant mountain chains with great trails. The Toiyabe Range, Toquima Range, and Monitor Range in the 6.3 million-acre Humboldt-Toiyabe National Forest in western Nevada (and a small part of eastern California) each have wilderness areas to explore. The Ruby Mountains near Elko are home to the trails of the Ruby Crest National Recreation Area, which are great for long distance hikers and backpackers looking for a multi-day hike in remote alpine territory.
Illustration by David Castillo Dominici at Free Digital Photos.net