Feature Stories - June 2011

Industry Focus

Economic Development

 Economic Development agencies in Nevada are going through a period of upheaval.  With changes looming to the structure of economic development in our state and continual funding issues, these agencies are working hard just to keep up.  Recently, executives representing economic development in Nevada met at the law offices of Holland & Hart in Las Vegas to discuss the many changes they expect to see in the future.
 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 much collaboration is there between economic development agencies?

Michael Majewski: There have been referrals going back and forth. A good example is with North Las Vegas and Henderson. We would refer quite a few people back, but I really feel there needs to be more open communication between all sectors. Right now in development, Nevada has finally reached that stage of the hurdles and we have to overcome.
Chuck Alvey: We have a lot of cooperation. There is great work in progress with the airport, city, county, NAIOP, the University, Desert Research Institute and the Community College of Nevada.
Rob Hooper:  The development authorities in Nevada that report to the commission all work in the same program, which is the local development grant program that we put together. It’s an eight-point plan, the building blocks of economic development. That’s how we write an annual plan. It’s all coordinated back through the Nevada Commission on Economic Development (NCED). The development authorities have a conference call every Friday where we compare what we’re doing. We’ve reached out to a number of development authorities in the rurals and formed a cooperative marketing agreement where we pass leads back and forth and we work on projects together. 
Terri Sheridan: The City of North Las Vegas and the North Las Vegas Chamber have a good relationship and we’re looking to forge those relationships and do more with them.

How can the business community get involved in economic development?

Hooper:  We’ve organized ten action committees they can help in. They cover different segments of the business community. We have about 250 business volunteers that meet every month. They each have their own rules and projects all within a specific industrial target of development or an educational program. We have technology, healthcare, banking and finance, commercial real estate, residential real estate and workforce education committees amongst the ten. It’s amazing to watch what they can do.
Sheridan: The main goal is to keep the businesses that we have in North Las Vegas. We want to get out and talk to those businesses and find out how we can help them and also how we can help one another.
Majewski: We probably have in excess of 200 different business volunteers.  We have large dreams so we have to have volunteers. We have to have the private sector working; otherwise, the programs won’t exist.
Alvey: It’s really time and treasure.  We need financial support to have the teams do what we do, but likewise with the board and economic development council, major investors, partners’ coalitions and advisor groups. It’s also just keeping our eyes and ears open and letting us know the challenges and issues. They may know companies looking to expand in the area or a company that is having trouble. That’s as important a call as any. It gives us the chance to go in and give some help. It’s truly a matter of constant interaction at all levels. 
Michael Skaggs: If we have somebody that already lives in this state that has a relationship with a company out of state and they will make the introduction for us, it saves us time and money. It lets us use their credibility. It helps a lot because they can get in the door and if we don’t have a relationship we get stopped by the guardians. Also, we finally put Point of Nevada, which is a power point, on our website. Anybody can peel it off and send it to folks.

How much time do you spend in retention versus recruitment?

Cooper: We do 50/50.
Sheridan:  I was going to say the same.
Cooper: The statistics bear out that most of your job creations are always going to come from the local business community. It’s just inherent. You can’t ignore your current customers because as soon as you do, they won’t be current customers anymore. Some of them have been in this community 50 plus years. So their roots are here. They want to grow. A lot of them just don’t know the programs and incentives.
Somer Hollingsworth:  We don’t spend any time on retention because all our efforts are on the companies coming in. If a company is expanding and wants incentives, then we’ll get them state incentives, but we don’t have the personnel to focus on retention.

What are your hopes and fears for the legislative changes being made to economic development in Nevada?

Alvey: The greatest hope is having a cohesive plan; one that recognizes individual localities and ties everything together in cooperation and partnership.  Having that, a high-level state interest continues at the highly-elected areas. The greatest fear is not being able to understand the details of how it plays out. It could be great, but it depends on which left or right turn it takes. It could also get complicated.
Hollingsworth:  Right now the devil’s in the details. Everything has criteria and nobody knows what it is. I don’t think anybody at the state level knows what it is yet. It could be very interesting.
Majewski:  It’s trying to be all things to all people. It’s very broad.  It’s great if you can get your arms around it, but it includes everything from the catalyst fund to the education fund to reorganization at every level of state economic development. That’s a big task to put under one bill.  This is going to be so broad that you’re not going to have focus to get anything done.
Skaggs:  Well, the resources will lose focus. This particularly shows in the last couple of years. These were years of demand for service and you all went through the roof. Everybody had all these expectations and there was no money. So at least this one has $15 million worth of money per annum in it. That’s got to help.
Cooper: It’s interesting that there’s a lot of support, and there should be, for AB Bill 449. However, $15 million is not going to go very far. You’ve got another bill in the Senate, Bill 775, that has $50 million you can use to invest in companies and it’s gotten zero support. There should be more people lined up for that $50 million than for the $15 million.
Hollingsworth: It’s easier to get the $50. It’s a little bit cleaner as it sits right now.
Cooper: I hope those two bills get married because then you’ll have more activity and a bigger impact. Obviously what you’re doing is a creative risk.
Hooper: My biggest hope is for more resources for economic development. It’s bad when you have one small town in Texas with a budget bigger than the whole state of Nevada. My biggest fear is that due to a lack of understanding, this bill would hurt what’s already working. Maybe it’s our fault for not broadcasting how economic development works better, but we have a good system.

What is Nevada’s biggest asset?

Skaggs: It’s pretty easy to talk about opportunity here. Talk about the growth of the west, the potential of this state and a place to locate. However, we’re babies at this.
Cooper: Our largest asset is location. We’re attached to California, who has significant issues, so we’re going to get an automatic adjacent overflow of folks this way. Businesses can come here and still be able to feed and serve their existing client base. Secondly, the location is in the growth of the southwest. We are the place to be in the United States. You have baby boomers who love the climate and the entertainment. No offense to the northeast with the weather and decaying infrastructure, but we are a young, brand new state.
Hooper: I go with the realtors’ statement, “location, location, location.” We’re close to California and they want to expand from the East or Midwest.  Internet fulfillment companies are coming to town mainly for the location. We are $150,000 cheaper per year on their shipping costs from Salt Lake. Location is our strongest asset.
Majewski: It’s not just location, it is accessibility. We have a transportation system that is really good. At the same time, as a state, it may be one of our hindrances because our transportation system is all east and west oriented.

What role does education play in Economic Development?

Majewski: As a whole, the companies that come here aren’t looking for skilled labor.
Hooper: I would disagree. This may be a north, south difference because we’re more of a manufacturing cluster. We do have the great logistics up in Sparks and Reno, but we have an awful lot of manufacturing including the headquarters of GE Energy and Bentley Bioscience.
Hollingsworth: The higher quality jobs you bring in, the more the training and college degrees are necessary. It’s important throughout the system. The first thing every company that comes in is suspicious of is our workforce. Higher education becomes more and more important.
Hooper:  To get there you have to reach down into that K -12 arena and have a much higher focus on stimulating education. You’ve got to get kids transitioning into adults excited about a career in manufacturing. It’s not just the higher education. It’s also having the industry nationally recognized and having portable certification programs that the manufacturers need to have. We brought the “Dream It, Do It” initiative to combine both of those things. It promotes down into K-12, it sets up certifications and it ties those certification programs and educational attainment to targeted industry types. Now we have something to show new companies coming in.
Cooper:  We do value education. Not to be disrespectful to our public education systems who have a declining budget, but that’s why we tried to encourage private colleges and universities to come to our area. Those private institutions have a very good business model and understand what our needs are. They see the opportunity.
Hooper:  In defense of public education, we have about 40 people from the education community all working on this deal to improve K-12 all the way through community college and tied to workforce development.

Is the “Sin City” image a problem for businesses looking to move here?

Hollingsworth: We battle with it on an hourly basis. We have clients that have been coming to Vegas for 50 years and don’t know what the business climate is. There may be some people who disagree with this, but I think we have to market ourselves and get that image across. Then, when they come here they will become our salespeople.
Alvey: It is the opportunity that is being missed, by and large. I met with a dozen site consultants back east a weeks ago. A few of them got who we were and knew some of the industries we have here. Most of them don’t even think of Nevada as a place to do business. It wouldn’t cross their minds.  The process has to be done carefully and credibly.