Feature Stories - November 2004

Economic Development

The Business of Growth

by Jessica Groach-Santina

After last year’s legislative session resulted in an $836 million tax increase, many worried that Nevada’s economic development would slow. But compared to many other states, Nevada still has fewer regulations, fewer taxes, a lower cost of living – and unstoppable growth. In 2003, new business filings in Nevada rose by 18,128 over the previous year, resulting in a grand total of 216,337 new business applications.

But aside from the obvious benefits Nevada offers, each city in the state has its own unique benefits and challenges. The Nevada Commission on Economic Development monitors the whole state’s growth, but local entities must be resourceful and creative. They must capitalize on their particular regions’ strengths and work to overcome challenges in order to draw in business. How are the different parts of the state faring in their efforts?

North Las Vegas

Southwest Ambulance is bursting at the seams. In the last five years, the Las Vegas-based ambulance transport provider has grown so much that the company’s 200 employees can’t squeeze into their 6,000-square-foot office.

"Land here is being scooped up quickly," said John Wilson, principal and executive partner of Southwest Ambulance. "We looked for areas that made sense, and found five acres in the Cheyenne Technology Center in North Las Vegas." The company will soon move into a building three times larger than its present location.

Many businesses are relocating to North Las Vegas because of its proximity to major highways, availability of land and its telecommunications infrastructure. The Cheyenne Technology Center was developed in response to city officials’ desire to create good-paying jobs.

"The Cheyenne Technology Center is part of the city’s fiber-optics backbone," said Mike Majewski, the city’s economic development manager. "It will attract companies that need strong telecommunications." It already has, including companies involved in manufacturing, automotive technology and medical technology. To accompany this effort, the Community College of Southern Nevada (CCSN) opened a $20 million state-of-the-art telecommunications building this fall. UNLV is also considering a satellite campus in North Las Vegas.

Majewski is also president of the new Nevada Economic Development Association. This volunteer organization, once off the ground, will act as an information clearinghouse to promote idea-sharing and coordination among the various economic development organizations in the state.

Henderson

"In general, we go after private education," said Bob Cooper, Henderson’s economic development manager. In the past five years, eight higher education institutions have opened campuses in Henderson, bringing the total to 13. "We think we’re filling a void. We’re still a young population, meaning that about 50 percent of people have lived here less than 10 years. But we were lacking colleges, as compared to some older cities."

With the area’s growth, and high demand for nurses and teachers, this approach makes sense. Furthermore, a readily available educated workforce is a big draw for businesses. New schools in Henderson include Nevada State College, the Nevada College of Pharmacy, the International Academy of Design and Technology and Touro University College of Osteopathic Medicine.

Cooper says 1,500 to 2,000 new jobs will be created this year, Henderson’s best-ever for economic growth. "We offer a great quality of life, the best schools, tons of parks; it’s a family-friendly, small-town atmosphere near a big city. There’s excellent housing and a variety of lifestyles," said Cooper. "Henderson is appealing for businesses. People just like living here, and that’s the best environment for businesses and employees."

Southern Nevada both profits and suffers from its tourist economy. It’s a draw for retailers, but a drawback for families. "People think we all live next to the Strip out here," said Cooper. "We’ve got sophistication and size, but we’re only associated with the Strip. They don’t know how much beauty there is – they just see Vegas as tourist-y."

Las Vegas

What about Las Vegas? Is it suffering from the "what happens here stays here" image? Not really. From 1990 to 2000, Las Vegas’ population grew by 80 percent, according to Scott Adams, director for the Office of Business Development in Las Vegas. While gaming may be a deterrent to some families, such tremendous growth in one city is very attractive to new business. Plus, gaming has helped other industries to thrive.

"I think there are a couple ways to see it," said Adams. "Gaming is an 800-pound gorilla. But if you take a cluster-based approach to building an economic base, the gaming industry has a whole other side. That would be hospitals, information technology, administration, finance and accounting, and lots of other new industry opportunities that tiein to gaming, and that can branch into non-gaming growth."

High-tech businesses are actively developing in Las Vegas. Officials are hoping the city-owned 61-acre downtown parcel will eventually house life sciences, biotech and biomedical facilities. "We’re terribly underserved in the healthcare industry. There’s a huge opportunity to attract a lot of aspects of the industry, like clinics, research facilities, pharmaceuticals or biomedical devices," said Adams.

The low unemployment rate presents a big challenge to economic development in Las Vegas. As Adams explained, "The unemployed have fewer needed skills. There’s a need for more real workforce training. But with 6,000 to 7,000 new people moving here each month, there’s a steady stream of new labor arriving in the area, ready to work."

Another challenge is land. "We’re victims of our own success," noted Adams. "There’s not that much room." Residential land brings a higher price, so not much commercial land is available. "At some point there’s got to be a balance, or we can’t provide jobs for all those new residents."

One possible solution is downtown redevelopment. "Las Vegas is shaped like a doughnut," said Adams. "The middle is this hole downtown where not much is going on. We need to channel new development into downtown."

It’s happening already. The World Market Center, which will be one of the West’s largest home furnishings complexes, is being built north of the Las Vegas Premium Outlet mall. Also planned for downtown are 8,000 units of high-rise housing, and potentially more in the future. Adams estimates that 60 percent to 70 percent of his time is spent on redevelopment efforts. "There’s going to be a different character downtown," he promised.

Reno

Judy Gardner is senior manager of worldwide operations at Cisco Systems. She and her family lived in the Bay Area until 1999, when Judy was asked to open a Reno office. "That first year, my husband, Ernest, and I wanted to go out like we did in the Bay Area, and listen to live jazz," said Gardner. Disappointed by what they found, they decided to open their own jazz club, EJ’s Jazz Café, in January 2004, along the river corridor in downtown Reno. Their success has far exceeded expectations. EJ’s is already marketing its own line of spices, and franchising isn’t too far off.

"Reno is going through a growth surge that reminds me of what happened in the Bay Area," said Gardner. "But the city needs to look five to 10 years down the road and make sure infrastructure is in place."

It’s a good point, considering that Reno is currently experiencing the quickest residential growth in the city’s history. According to John Hester, community development director for the city of Reno, "This year we’re seeing a population increase of about 10,000 people, because it’s a great place to be." With Lake Tahoe and Pyramid Lake close by, a river running through town, a pleasant climate and a rise in the "creative class" population, Reno is not only a tempting alternative for Bay Area transplants, but also a big opportunity for new businesses, especially downtown.

"The biggest challenge for downtown Reno has been declining gaming revenue over the past 20 years. In that time we’ve had 20 casinos go out of business," said Peter Gillon, redevelopment administrator for the Reno Redevelopment Agency. "The overall strategy, though, has been to diversify the economy of our downtown, much as the economy of this entire region is doing."

Reno’s technology industries are growing as these efforts continue. Cisco Systems, Intuit, Microsoft and IGT all choose to work in Reno. Saint Mary’s Hospital and Washoe Medical Center are undergoing huge expansions. The city’s biggest mall, Meadowood, is looking to double its size. And new office parks and lifestyle centers are cropping up in all the surrounding areas, which were formerly empty space.

The city’s biggest emphasis now is on redeveloping the downtown core. Land assembly is the biggest obstacle. "We have obsolescent land-use patterns, functionally obsolescent structures, economically non-viable properties and fragmented ownership within the downtown area. That all increases the cost of land assembly," said Gillon.

Sparks

Sparks faces the same issues. Bordering Reno, this bedroom community contains mostly residential developments, with few options for shopping or working. The city of Sparks is trying to change that, primarily downtown in the Victorian Square area.

"Victorian Square is in a growth mode," says Tom Burrous, redevelopment/economic development analyst for the city of Sparks. "But it’s a problem here. If you go up to the north valley, there’s a lot of pastureland. You just scrape it off and start building. Downtown, you have a number of people who own properties, and it makes it harder to assemble. That’s where we’re trying to help."

But business is going very well. "We expect by the year 2020 to double the population of the year 2000, and the north valley is building new, exciting developments," said Burrous. Sparks expects over 11,560 acres of development in the north valley. And although lack of shopping and commercial business have been obstacles for growth, that’s changing. Kohl’s department store just opened, and a new Sparks Galleria in the north valley will be a general/commercial mix. Copper Canyon, a new live/work space covering over 1,200 acres in Sparks, and 130 acres at Kiley Ranch, will begin development soon with retail, residential and commercial spaces.

Carson City

In Carson City, growth has been sustained but modest, according to Joe McCarthy, economic development and redevelopment manager. "We’re fortunate in Carson City to have the most diversified economy of any other county in Nevada." He estimated that 15 percent of jobs are in goods-producing industries, mainly manufacturing and construction, but also machine tools, military aviation industries and some new technologies like renewable energy and telecommunications. Combined with a large base of white-collar professional jobs, including: those at the Carson-Tahoe Regional Medical Center; local, state and federal government; banking; legal services; accounting; real estate; and insurance, the "stable workforce" totals between 8,000 and 10,000 out of the city’s 50,000 population. "Stable" in this case means jobs that are not related to gaming or tourism. The wireless communications industry also makes use of Carson’s bowl-like geography to do testing on various reception issues, which could become a big industry for Carson City.

Carson City is certainly not experiencing the rapid growth of Las Vegas or Reno, especially in housing, due to the unavailability of vacant land. Consequently, developers are expanding into the surrounding counties. And Carson City is about to kick off a Land Use Master Plan Update, an 18-month process that examines zoning, housing, mixed-use development, transportation and the balance of commercial and residential land uses.

A new freeway will bisect the community by early 2006. "For Carson City folks, that’s huge," said McCarthy. Currently one of the city’s biggest obstacles to growth is Highway 395, the main road through town, which has several stoplights and a 35 mile-per-hour speed limit. "With the freeway, people can get to the airport or rail station in 20 minutes. That will have a tremendous impact on attracting new businesses to Carson City."

Elko County

When WDC Exploration & Wells was looking at how to best cover the western United States, it did market surveys of various regions, including Reno. But as a drilling contractor, Elko offered WDC something the others didn’t – a large mining presence. Additionally, its location was ideal for reaching Washington, Idaho, Montana, Utah, Wyoming and Nevada.

The company just had its open house this past June, but company officials are already thrilled with what they’ve seen of Elko. "Most of our 25-person staff is from Elko, so there was a good available pool of workers. And the three who are from other areas are really happy with the town and the housing costs."

Many people may be surprised to know what Elko offers. While Elko County (which includes Elko, Wells, Carlin, Wendover, Spring Creek and Jackpot) hasn’t benefited from proximity to California, it does benefit from mining and agriculture. Elko is a "micropolis," meaning that while it is a small town of just 37,000 people, it is an economic hub for twice that number in eastern Nevada and western Utah. It has its own regional hospital, an airport, a regional college and a great deal of retail. Plus, as the largest gold-producing area in the nation, Elko County has a very strong economy with an average income of approximately $43,000 per year.

Elko County prides itself on its forward approach to infrastructure. Development has begun on a geothermal business park, which would contain retail and commercial space, and would be entirely powered by geothermal energy. As Elaine Barkdull, executive director of the Elko County Economic Diversification Authority (ECEDA) says, "We have lots of water out here, and very low power rates. Land is still inexpensive. Geothermal activity here is huge. Frontier Communications has invested a lot of money in broadband and fiber optics in Elko County. So, we’re ready for growth."

Barkdull concedes that location is still an obstacle. The rail service in Elko County is old and inconveniently located. There aren’t many existing buildings, which means businesses must build to suit. But with Scenic Airlines now planning flights directly from Elko to Las Vegas, and ECEDA working with the Union Pacific and Burlington Northern railways to make rail more accessible, location won’t be the obstacle it has been.

White Pine County

White Pine County grapples with location issues, too. As Karen Rajala, coordinator for the White Pine County Economic Diversification Council, explains, her region’s growth is subject to mining fluctuations. Since 1978, three waves of mine closures each sent the county into severe economic depressions.

But with the county’s proximity to Great Basin National Park and the surrounding area, Rajala says many people from Clark County have bought second homes there. New businesses have opened, such as a retail medical supplier, an irrigation supplier, an aluminum fabricator and a small downtown Ely mail service business. "They have all relocated from urban areas to take advantage of the small-town life and the recreational opportunities here," said Rajala.

Ely is also experiencing an arts boom. The Ely Renaissance Society, a group that creates public art and murals locally, has brought in many out-of -own visitors, and a store called Desperation Arts in downtown Ely offers local and regional art. Another small business, Elyon Water, bottles its water in Ely and markets to regions outside the area. White Pine’s biggest problem? Accessibility. There is currently no interstate highway access, a requirement of most big companies. And like Elko County, rail service still needs help. But Rajala pointed out that its location in the intermountain west, with abundant recreational activities and affordable housing, makes White Pine an attractive option.

So How’s Business?

Quality of life, infrastructure, location, accessibility and the cost of land – these are issues all of Nevada deals with, as do other states. But what is unique is Nevada’s tremendous growth, and we need to make way for it. It means our economy will continue to thrive, and that’s good news for all of us.