A phrase that’s been bounced around everywhere this year, economic development, has become a hot topic in boardrooms across the state. With Governor Sandoval’s guarantee to make economic development a priority for his administration, a fire has been lit throughout Nevada. Executives representing various economic development agencies throughout the state recently met at the Las Vegas office of Holland & Hart to discuss new approaches to economic development and tried and true methods to boost Nevada’s economy.
Connie Brennan, publisher of Nevada Business Magazine, served as moderator for the event. These monthly meetings are designed to bring leaders together to discuss issues pertinent to their industries. Following is a condensed version of the roundtable discussion.
How has Governor Sandoval’s New State Plan affected Economic Development?
Terri Janison: When the governor and my boss, Director Steve Hill, laid that plan out, [they] put a challenge out: 50,000 jobs by the end of 2014. It’s not that our office is going to be the one to create that. We’re hoping to work with people across the state. We’re able to complement the work that is already going on to get 50,000 jobs.
Somer Hollingsworth: In essence, it brings all of us together. Everybody has always done their thing throughout the state and you have to remember that, for awhile, there was no relationship with the state. They were kind of doing their own thing. We’ve got a fabulous governor. He’s on fire. He’ll visit companies all over the place. We haven’t had that in years and years. He gets economic development; he really understands it. It’s an opportunity to be transparent. We know what they are doing. They know what we’re doing. We know what the state is doing. If we need the state, we bring them in and get them involved. Steve Hill will tell you, it’s bottoms up, but we still need them; we need their ability. The devil is always in the details. We’ve never had anything like this. If you look at the response of the companies, they are calling just because the buzz is out there. We think it’s a great move for everybody. It’s a lot stronger when you’re unified than when you are a little individual. We’re giving it all the support we possibly can.
Janison: We’re seeing that literally statewide. We found that the statewide part of the plan is to ensure there is a more regional effort. We’ve never had to do it before. As a new person to this arena, it’s been fabulous to watch and see all those conversations and people working together and move that forward. I think that is part of the whole goal to build unity in the state.
John Ramous: It’s something that should have been done a long time ago. The need is here and the opportunity is here. Everybody is on board, for the most part, of seeing progress moving forward to really get the engine going again and to make it a permanent solution for the state. I think the collaborative efforts from the private and public side are finally coming together, being engaged and finally a plan that everybody can believe in.
Janison: I think you hit it on the head. One thing the governor said is that this isn’t going to happen overnight. But, we can build that foundation you just referred to, so, as time moves on and we grow and things are going positive, that we never find ourselves in this situation. We need to build that foundation in his administration and hopefully bring Nevada to where it needs to be and sustain it. That is probably the biggest goal aside from the 50,000 jobs.
Does Nevada properly fund economic development compared to other states?
Arnold Lopez: No.
Bob Anderson: No, I think they haven’t. When we see start-up companies that are coming to town looking for money, they will tell you, “The State of Maryland had a $500 million fund and they would do X and Y.” I don’t think we’re doing enough, but we have a great start here. We have a governor who is enthused about this. He understands the need. We have to get capital here starting the process and you have to walk before you run. I’m hoping that, in the next legislative session, we can increase some of these dollar amounts.
Bill Arent: It’s not the amount of funding. It’s how are we funding businesses and strategically, what are we doing? It’s a different business climate today than it was 10, 15, 20 years ago. One of the things I was delighted to see in the governor’s plan is language like “return on investment”. That is how the state should look at its investment. We start to get the investments we’re making directly and we demonstrate that case for success; then, over time, we can scale it up. Putting the investments in the right places is critically important. UNLV has set up a technology office and has an office of economic development. I don’t think they ever have had one. So, sending the message down that we’re going to invest in the right places is incredibly important. That is where we’re moving in the right direction.
Lopez: When you think of 50,000 jobs and job quality, we’re looking at wages and benefits, probably an investment of over two and a half billion dollars, just in wages and benefits. When you talk about all of the things that go into making 50,000 jobs happen, you’re looking at a hefty sum well beyond the two and a half billion dollars that are required to invest to make that happen. It’s not just simply waving a magic wand and saying 50,000 jobs are going to come here. It’s complicated and expensive, but then, there is a simple way. There are 50,000 businesses in the State of Nevada, at least. I think there are 160,000 to be honest with you. So, if a third of the businesses added one person, there are the 50,000 jobs and we’re done. How simple is that?
Janison: You hit it on the head. Does the state fund it well enough? Well, the answer as you said is no. But, is it really the state’s responsibility to do it all? I think that is where public and private partnerships are going to be successful. You can’t just count on the state to fix it. It’s got to be a combination.
Ramous: It’s probably even more expensive to bring those businesses from out of state. It’s not insignificant. Certainly we want to attract those, but don’t overlook promoting existing business. What easier way to create new business than by expanding as opposed to putting those dollars into new infrastructure. We’ve got a lot of vacancy here in town, let’s address that issue first. Certain parts of Southern Nevada have a huge amount of inventory, office, retail. To a certain extent, you’re seeing different use of the business building being critical as opposed to an investment. That is an opportunity. You will get more value return investment
on those existing infrastructure than bringing in new ones. You have to work smart and make sure there’s accountability with each dollar.
Janison: I was surprised by how much existing businesses are not aware of those incentives that are available. They think it’s for new companies coming in. I said, “Listen, you guys are going to expand, you can apply for the same rebates and training dollars for your employees.” That is going to be our responsibility for our office. We hope that others will communicate that, but it’s important for us to communicate well so people know what is available from our state.
Terri Sheridan: That is part of business retention, being able to get out in your community and finding out how they’ve expanded and do they have plans for expansion. It’s a way to get to those 50,000 jobs. Then, when you’re out there, you can educate people on other plans, whether it be the incentives or other ways that the municipalities and government can help them out. That has always been a big piece of the puzzle, expanding the existing companies. You know, 50,000 jobs in three years is a lofty goal. It could take two years to bring in a company that is going to create 500 jobs. Three years for 50,000, we have to deal from within first.
Lopez: My concern is that, when we get focused on the number, 50,000 jobs created, we’re going to wake up and say, “We have 50,000 jobs, let’s stop.” To me, that is the base, the floor. We lost over 15,000 jobs in the last couple of years, 50,000 jobs is not enough. [We need] to retrain people who are unemployed and get back to where we have the economic sustainability in our cities and local governments, in the state coffers and all the requirements we have in the state. Just to provide a quality of life here is going to take a lot more than 50,000 jobs. That’s the minimum, what beyond the 50,000 can we do? It doesn’t seem impossible.
What is Nevada’s primary selling point?
Hollingsworth: Prior to the recession, the southwestern United States was the future. That is going to happen again as this recession begins to fade. Southern Nevada can be the center, the capital of the new West. Logistically, we’re perfectly located. We have infrastructure that is second to none. Our connectivity is amazing. Everything is new here. We have the opportunity to blow the doors off. I think we need to take advantage of that. The next one and a half, two years, the growth is going to start to roll. We have a huge opportunity right now. We’ll be one great big fat happy family together talking to these companies and bringing everybody to the table.
Ramous: That is the key. Whether a business goes to North Las Vegas or Henderson or the City, we all win. That’s the thing that I’m hearing, it’s more and more of “Southern Nevada” as opposed to one municipality or another. You’re starting to see everybody champion behind everyone to support them.
Janison: We have the same thing in the North from a state perspective, EDAWN and NNDA are doing the same thing and the rurals are coming together as opposed to working individually. They have different needs and different strengths and weaknesses, they are trying to figure out what is best for them to work together and make their area successful.
Ramous: [You also have the] cost of living. You’re seeing a change of mind-set. Five years ago, the companies are coming in saying, “My employees can’t buy a house.” You have to promote what is out there right now. There is an opportunity. Where can you find $75 a square foot homes? It’s pretty rare in a growing economy.
Sheridan: Cost of living and quality of life, whether looking to the arts and parks or the trail system for outdoor enthusiasts. I don’t think a lot of people are aware of our recreational opportunities. We always used to say it was Mt. Charleston and Lake Mead and everything in between, it captures everyone.
Hollingsworth: Thirty-nine million a year come here and raise hell and they never see the other side of this town. They don’t know we have a ski resort 45 minutes from here. They don’t know there are pine trees out your back door and snow on the mountain caps and more churches per capita than any community in the United States.
Anderson: I tell people it’s a business friendly environment and they like to hear that. Often times, they are coming from California or back East where it’s not business friendly. We may over promote that it’s no tax. People come here, they might be interested in Nevada because of low tax, but that is really where the discussion stops. They start asking about schools and business environment; we need to work on that.
Janison: That is what we talked about and the conversation is continuing. It’s gaining momentum, which is great. We’ve been our own worst enemy. We don’t tell our good stories about the positives. We do have great things going on, we have to do a better job about telling the positives because there are amazing things going on out here.
What does the future look like?
Hollingsworth: We have to stay focused on economic diversification. We have a long road in front of us, we can’t walk away from this. We have everything together for the first time ever. We’ve got to bring other companies in to take the pressure off the strip.
Janison: Let me go back to the state again, we need to go on all the strengths. That is what is happening in the North as well. We’ve not looked at that over the years. We really need to make sure that the state grows. We have to focus on state efforts.