Feature Stories - November 2005

Planning Nevada’s Future

Economic Development Agencies Devise Strategies

by Jessica Groach-Santina

According to the Nevada Commission on Economic Development (NCED), 143 new companies moved to Nevada in 2003-2004, bringing 6,752 new jobs and a whopping $3.2 billion in economic impact.

When Governor Guinn was working on the state’s 2005 budget, he made an unprecedented decision to provide $10 million to economic development for fiscal year 2005-2007. Of that, the Nevada Development Authority (NDA) receives $5.5 million, the Economic Development Authority of Western Nevada (EDAWN) receives $3.5 million, and rural agencies divide the remaining $1 million.

Although Nevada’s tremendous growth is undeniable, it is also the least diversified state in the nation, according to Somer Hollingsworth, president and CEO of NDA. With so much of the economy in Nevada being dependent on gaming, tourism, mining and manufacturing, these agencies are charged with distributing Nevada’s eggs into many baskets.

While the NCED provides some financial support to these agencies, they have traditionally funded most of their own budgets. "The governor saw what we had accomplished, raising 75 percent of our funds only through membership and making do with about $1.6 million a year, while other big cities like Phoenix get $4 million to $5 million. He realized that with more money, we could do even better," said Hollingsworth.

"We’ve done a lot with a little for a very long time," said Chuck Alvey, president and CEO of EDAWN. "This is really a modest amount of money, but it means a lot for us."

Southern Nevada

State income taxes, higher workers’ compensation costs, higher utility bills and difficult legislation have many California business owners running for the border. And while Nevada has happily soaked up that excess, development agencies know you can’t sit and wait for just anyone to show up. You need the right kind of businesses. That’s where this state funding comes in.

"We know other states around the country must be experiencing problems similar to California," said Hollingsworth. The NDA’s new funding will pay for a research firm to determine the top 10 states in the country facing those same difficult issues. "Once we get that information, we’ll know which states to go into with a marketing program," said Hollingsworth, and the agency will then use the remaining state money to fund its marketing efforts.

The NDA’s successful guerrilla marketing campaign will remain in place. Efforts even include flying business owners to Las Vegas, inviting them to a cocktail party and showing them what Nevada is willing to offer. "That way, they get time to ask us questions, we can take them on tours and give them the broad scope. A lot of people visit Las Vegas and never leave the Strip, so this changes things for them," said Hollingsworth.

NDA will continue targeting specific industries as well. At the top of that list are the technology and telecommunications industries. The Cheyenne Technology Corridor in North Las Vegas has been very successful, and has recently added Qualcomm, a wireless communications provider, to its list of residents. CDW, a large computer retailer, is also building its West Coast distribution center in North Las Vegas.

"The focal point for us is San Diego," said Hollingsworth. "They’re having huge financial problems now, and they’re a center for technology and the biotech industry."

Medicine and biotechnology are also targets. The Nevada Cancer Institute, which opened in August of this year, makes attracting those companies easier. The alternative fuels business has also become a focus. Biodiesel of Las Vegas began production near Nellis Air Force Base a few years ago, and the city of Las Vegas is leasing two of Honda’s new hydrogen fuel cell-powered cars in a test program. Solargenics LLC, the Raleigh, N.C.-based maker of solar energy technology, has chosen Las Vegas for its 64-megawatt power plant. And finally, several producers of lithium batteries are located in the Las Vegas area.

"We’re pretty focused, and we’re concentrating on quality jobs with good pay and benefits," said Hollingsworth. "Each area in Southern Nevada offers something special, we all want quality, and we go as a team to recruit these businesses."

Because of this, individual cities don’t suffer when money goes to the private sector. "I think the kind of partnership we have with NDA is the best way to promote economic development," said Mike Majewski, director of economic development for the city of North Las Vegas. "Not that we wouldn’t be willing to accept funding directly from the state…but at the same time, we have a close relationship with NDA, so if one entity benefits, we all do, because we work so closely together."

"We’re excited that this money adds more prospects to the pipeline," said Bob Cooper, economic development manager for the city of Henderson. "We’re confident we’ll benefit from it, and from the possibility of an even greater working relationship with NDA."

Northern Nevada

This past May, Inc. Magazine placed Reno at No. 1 on its 2005 list of the Best Places for Doing Business in America. With the Silicon Valley just a stone’s throw away, the Truckee Meadows has taken in its fair share of California’s refugees. But EDAWN wants strategic growth, which is where the state’s money comes in.

"We have to make sure growth is from a high proportion of good quality companies that pay good wages, offer good benefits, will draw on our educational system and give back to the community," said Alvey.

This is why a portion of EDAWN’s $3.5 million grant is funding a Target Industry and Skill Set Study. The idea is to better shape regional economic growth by determining the area’s workforce skill sets and finding out which quality target industries the region is best suited – or potentially best suited – to serve. EDAWN will commission a firm to conduct a competitive analysis of the region, its assets and opportunities, market conditions and workforce.

"We want to know what we have to offer. Rather than just picking buzzwords, we look at our assets, what we need to tweak, where to adjust the workforce, and then we can be successful in a particular industry. We all think we know what we have, but it really takes someone from the outside to come in and take a hard, objective look," said Alvey.

By next spring, EDAWN expects to have enough information to target those industries with customized efforts, which may include, but won’t be limited to, public relations, trade shows, or even legislative lobbying for resources.

Rural Nevada

While the state’s urban areas have seen record growth, rural areas continue to struggle with diversifying away from mining and agriculture. The money from the state’s budget aims to help this effort. Not only did Nevada’s rural areas directly receive $1 million, but because NDA and EDAWN were given direct, pass-through funding, the $516,000 that the two large agencies would normally receive from the NCED will be divided among the rural regions.

"Rural Nevada has a lot going on right now; the area is very active, which hasn’t historically been true," said Tim Rubald, interim executive director of the NCED. Rural areas will submit applications to the NCED to receive a portion of the state money for specific projects. "The biggest project right now is the large transloading facility being planned east of Elko, which I imagine will probably get most of that funding," said Rubald,

This transloading facility is the Northeast Nevada Railport and Industrial Park. "Rail service is the desired form of transport because of gas prices, the lack of truck drivers, and the overall cost of transporting by truck," said Elaine Barkdull, executive director of the Elko County Economic Diversification Authority. She said that with Reno and Las Vegas booming, Elko is the new "hot-spot" for growth. "What we lacked was developed industrial property and affordable transportation. Since rail is more affordable for companies, we’ve killed two birds with one stone by developing this facility," she said.

Aside from affordable land and rail service, Elko offers something else that Nevada’s urban areas can’t – water. Existing infrastructure on the property, a frontage road and access to I-80 should also make the area appealing.

In Mineral County, the U.S. Department of Defense Base Realignment and Closure Commission (BRAC) was set to close the Hawthorne Army Depot earlier this year. Due to efforts by state delegates and community members, Hawthorne was eventually removed from the BRAC list. The experience made it clear that economic growth and diversification are sorely needed in Mineral County. Rubald expects the county to apply for NCED funds as well.

Although the study commissioned by EDAWN is expected to benefit the entire northwestern region of the state, including the area served by the Northern Nevada Development Authority (NNDA), Ron Weisinger of NNDA said he has applied for a separate grant from the state funds set aside to help rural areas.

"We are the only truly regional economic development agency in Nevada," he pointed out. "The others serve only one county, while our service area includes Carson City, Douglas, Lyon and Storey counties. We also provide technical assistance to Churchill, Pershing and Mineral counties." He hopes to get funding for a project called REDSI – Regional Economic Development Strategy Initiative – which will enable the communities in his service area to hire a consultant to: determine each area’s strengths and weaknesses (in workforce, skill sets, resources and infrastructure); to define a set of goals that include input from each community; and to develop marketing plans that will help achieve the goals. "The days are gone when one county can go it alone, with the exception of Clark County," said Weisinger. "We need to devise ways to work together for common goals for the entire region."

The Seeds are Planted

Now that NDA, EDAWN and rural authorities have received extra finding this fiscal year, can they expect it from now on? Alvey isn’t getting too excited about the prospect. "Right now our goal is to use this money wisely, to show results to the governor, the Legislature, the community and the state. It’s only guaranteed once, so we won’t take it for granted. Hopefully, we show that it’s a good use of money, and make it a no-brainer next time."

Somer Hollingsworth also wants to ensure NDA deserves this windfall. "It’s almost like winning the lottery," he said. "We’ve never received this before, and we don’t want to screw it up. We know what we can accomplish with very little state funding, so we’re going to play our cards right. It’s pretty exciting."