The absence of venture capital in Nevada is not a new topic among the state’s businesspeople, having emerged with some regularity in previous election years throughout this decade. The November 2000 election will see a reintroduction of the topic. Members of the business community increasingly understand how critical venture capital is in attracting sought-after high-tech companies, so the November ballot may represent the best opportunity yet for establishing a state-sanctioned venture capital policy.
Larry Struve, former head of the state’s Commerce Department, is spearheading a November ballot initiative that would eliminate portions of a Nevada Constitution clause prohibiting the state from giving money to private companies in any way. Though voters defeated similar initiatives in 1992 and 1996, Struve thinks the initiative “is an idea whose time has come.”
Investment professionals in the private sector are increasingly unwilling to wait for a Constitution-altering initiative. Already, one venture capital company exists in Incline Village; for awhile, the firm, Sierra Angels represented the only venture capital game in the state. However, another group of investors has established the Reno-based Millennium Three Venture Group (M3VG). Established by Robb S. Smith and Christopher Howard, M3VG’s investors include Silicon Valley expatriate Stuart Feigin, who says he’s interested in seeing Nevada companies benefit from the growth opportunities their California counterparts enjoy.
M3VG seeks to invest in companies with greater than $5 million in annual revenue, strong management teams and the desire to pursue large markets. The firm recently announced the completion of a $1.8 million investment in Reno-based Alliance Retail Services. The National Venture Capital Association recently awarded its first Nevada membership to M3VG. Perhaps the higher profile of private sector venture capital firms such as M3VG will combine with passage of the November ballot initiative to make 2000 the year in which venture capital becomes a key aspect of Nevada’s commercial and economic future.
Electric Utility Deregulation
Come March 1, the electric utility industry in Nevada will change irrevocably. That’s the date the state Public Utilities Commission (PUC) pinpointed for the opening of Nevada’s electric utility markets to competition. The pending deregulation already fomented a merger between the state’s two incumbent power providers, Nevada Power Co. and Sierra Pacific Power Co., who joined to become Sierra Pacific Resources. Deregulation, as can be expected, has been far from easy: at times, debates regarding rate freezes and incumbent provider names have taken over the process, and the effective date was already delayed once (from January 1) to accommodate potential Y2K-related problems.
According to the PUC, nine out-of-state companies have applied to provide electric service to Nevadans; thus far, Enron and Utility.com have received licenses to service Nevadans. Deregulation in Nevada isn’t just attracting traditional electric utilities: the PUC notes it’s received licensing requests from a metering services company, which subcontracts with utilities for meter-reading, and from Northwind Aladdin, which will provide electricity exclusively to the new Aladdin on the Las Vegas Strip.
Most likely to benefit initially are large businesses, industrial or resort customers requiring enormous amounts of electricity. For any electric company, such customers represent the most sought-after clients. The least desirable? Homeowners and small businesses, who may not enjoy the best electric rates unless they aggregate for the purpose of greater buying clout. All electric users should take heart, however: deregulation of other industries, including telecommunications and natural gas utilities, has proven that the opening of utilities markets ultimately helps consumers of all walks.
High-Rise Luxury Condos
Las Vegas’ housing community has long been making national news, more for its rate of growth than for its architectural excellence. 2000 will offer a departure from that. Two luxury,high-rise condominium communities in the Paradise Road area are slated to welcome residents in the next 12 months. The first homeowners at Tumberry Place will arrive in December; Park Towers at Hughes Center will be ready for occupancy by the end of September. Park Towers spokespeople say the first four floors of both towers are completed, and builders are now adding floors at the rate of one a week, with completion of the entire community anticipated by early November. Two other luxury high-rise communities — Versailles at Queensridge in Peccole Ranch and The Masters near Paradise Road — are in the financing and planning stages.
Long renowned for its affordability, Southern Nevada’s housing market will embark on a completely new tangent, courtesy of the of the luxury high-rise condominium trend. Turnberry Place, which is being developed by Florida-based Turnberry Associates, will offer condominium homes starting from 1,550 square feet and $400,000. Turnberry Place will also feature homes priced at more than $5 million. The Molasky Companies’ Park Towers at Hughes Center offers homes ranging in size from 2,100 to 5,400 square feet, and prices from $720,000 to $2.7 million. Turnberry Place and Park Towers feature such amenities as full-service concierges, executive board and meeting rooms, community libraries, wine storage areas, health clubs and spas, beauty salons, pools and tennis courts, gourmet dining and business and meeting centers.
The communities’ developers seem bullish about their properties’ prospects. “Tumberry Place is satisfying an unfulfilled demand in the real estate market for luxury living, which coincides with the overall upscaling of the Las Vegas Valley,” said Turnberry’s vice president of sales, John Riordan. “As a new concept to Las Vegas, sophisticated and exclusive high-rise, resort-style living is proving to be a greater success than we had anticipated.”
Steve Bottfeld, executive vice president and senior analyst with Las Vegas-based homebuilders’ research firm Marketing Solutions, shares Riordan’s optimism. “Turnberry Place and Park Towers are doing far better than anyone had any right to expect, and I see nothing in the future that will slow them down,” Bottfeld observed. “Even more importantly, I think the success both have had will probably lead to the development of at least one more luxury high-rise.”
Bottfeld notes both communities are proving successful due to a combination of location and a maturing Las Vegas housing market. “Turnberry Place and Park Towers have been successful because they’re located strategically for markets to which they appeal,” he explained. “They appeal to ‘muppies’ — mature urban pioneers. They’re people who travel a lot, who want a second home, who used to live in the suburbs, who have finished raising their children and have bucks. They want to be someplace exciting, and in a secure environment.”
“What you really need to look at is how Las Vegas is maturing as a market,” Bottfeld added. “In small markets such as Las Vegas, when high-rise product first arrives, it’s luxury product. Las Vegas is maturing very rapidly.”
The coalescence of such factors and talented developers has been critical to yielding success in the luxury high-rise market, and will remain so, according to Bottfeld. “Turnberry has outstanding experience in other markets, and they were smart enough to do their homework before they came here,” Bottfeld noted. “In the nexus of [Park Towers developers] Steve Wynn, Irwin Molasky and Mark Fine, there’s more experience than you can shake a stick at. It takes that kind of talent to make these kinds of urban experiments work.”