Economic development has been scaling up in recent years, working to diversify into a more stable state economy.
“We work with all the regional development authorities,” said Bob Potts, deputy director, Governor’s Office of Economic Development (GOED). “They get state funding from us, and we contract with them for the scope of work.” GOED works the legislative and policy side, and the strategic planning for the economy as a whole. They partner with eight regional development authorities (RDAs), and municipal planning departments.
Every region offers different assets to companies and industries it hopes to recruit. Bringing RDAs together boosts marketing efforts and allows individual regions familiarity with others when suggesting the best landing site for potential businesses.
“While each municipality has its own identity and vision for the future, we all want to diversify our economies and encourage job growth and creation,” said Jared Smith, director of economic development and tourism, City of Henderson. Henderson markets its region using digital and traditional campaigns targeting specific industry sectors.
Economic Development Authority of Western Nevada (EDAWN) aggressively markets through relationships with regional and statewide partners to highlight growth in the Reno-Sparks area. EDAWN works closely with Las Vegas Global Economic Alliance (LVGEA). The regions are so different, there’s little competition.
“A company looking at the North is generally not looking at the South, and vice versa,” said Mike Kazmierski, president and CEO, EDAWN. “Oftentimes we’ll get a client prospect that is looking for certain things that we cannot provide, or that fit better with the South, and we refer them to LVGEA. Or it’s more a rural kind of prospect and we’ll refer it to our sister organization in Carson City, Northern Nevada Development Authority (NNDA). This is a team sport. We work well as a state on the economic development front.”
LVGEA works with brokers, city and county municipalities, GOED, developers, and existing businesses that can connect them with businesses looking at Nevada. “Once we establish a relationship with those companies, we talk about things like tax incentive programs, if that’s applicable. We talk about connecting them to workforce, to help their businesses. We talk about connecting them with the community and understanding the different regulatory processes we have, understanding each one of the jurisdictions or cities and their niche assets,” said Tina Quigley, CEO, LVGEA.
LVGEA takes potential recruits and site selectors on tours to local parks, schools, cultural centers, industrial centers, familiarizing them with the region. Lead generation trips, picking up again post-pandemic, allow team members to scope out industry clusters that could flourish in southern Nevada.
North Las Vegas looks for businesses with leases expiring where they are. “We like to have conversations with them, pique their curiosity about doing business in North Las Vegas and see what we can do to move them here,” said Terri Sheridan, manager, North Las Vegas Economic Development.
Obstacles
Every region faces unique obstacles, but as a whole, Nevada’s economic development is challenged by land availability, water limitations and the need for workforce training.
“Obstacles are very localized,” said Kazmierski. “For example, our housing prices have gotten very expensive. They’re not as expensive in the rurals or in Vegas. If that’s an important aspect of what a company’s looking for, it affects their decision.”
Nevada faces many of the same obstacles that occur nationwide: rising housing prices; tight labor pools. Most regions have similar challenges. But northern Nevada faces some unique challenges.
“We have limited land up here. We have plenty of water, so you should flip that around to what is limiting or potential obstacles. In Vegas, water may come up as one of the obstacles. For us it’s land. We have a lot of BLM land around us and that forces companies to look at opportunities a little further away from the metro area, which may then make it harder for them to attract the labor they may need,” said Kazmierski.
The dynamics of economic development has changed dramatically over the last couple years, according to Sheldon Mudd, executive director, Northeastern Nevada Rural Development Authority (NNRDA). While the entire state shares many of the same economic development problems, for rural Nevada, housing, workforce development and infrastructure are often challenging.
“But the biggest obstacles we have faced in the last couple years, more than others, are attitudes and policy at the state level regarding economic development,” said Mudd. There’s been a shift since Elon Musk called Nevada the get it done state. “I don’t think you can say that anymore. The attitudes and efforts that are being put forth in order to enhance the business environment in Nevada have fallen completely to the wayside from my perspective. It’s just harder to do business in Nevada now than it was in the past.”
The need for infrastructure, everything from water and sewer to broadband, makes recruiting to rurals challenging. Even getting housing built can be difficult if there are no local builders. In some rurals, getting supplies and construction to the area is too challenging.
Companies locating in Nevada need facilities for the business, housing for employees and a trained or trainable workforce.
“Creating quality, high-paying careers for our residents and for prospective companies is a key priority in Henderson,” said Smith. Which is why the city is partnering with College of Southern Nevada on a Center of Excellence, a facility designed to create a skilled workforce in advanced manufacturing, set to open in 2023. Assembly and advanced manufacturing is growing throughout Nevada, often due to companies leaving California.
Opportunities
Much like obstacles, opportunities vary by region. There’s an entirely different tact taken with metro versus rural, and even between northern and southern Nevada’s urban areas.
“Different flavor, different audience, different supply chain, they even have a different market,” said Potts. “You have to think about their unique characteristics. There are some amazing opportunities in both the urbans and the rurals, but in different lanes.”
Some rural counties—Eureka, Elko, Lander—are cutting edge in extractive mining. Lithium mining is poised to take off in counties that haven’t had mining and is an opportunity for Nevada once permitting is finished and technology in place, according to Potts. Nevada is home to the only operating lithium mine in the U.S., located in Clayton Valley. In June 2022, permits were approved for mining at Thatcher Pass, approximately 60 miles from Winnemucca on the Oregon border.
Other RDAs are creating opportunities. NNRDA covers four counties and roughly 40,000 square-miles of rural Nevada. It has a huge region, with a tiny population. NNRDA markets worldwide, and also close to home.
“We’ve taken on a more active role in small business space, a grow your own approach, trying to empower local residents to start businesses and engage in active commerce and providing services,” said Mudd.
NNRDA has two small business initiatives. READY AIM Small Business Primer is a program created because small business owners wanted a bare bones, speaking-our-language program to help startups. NNRDA went all in and developed an entire curriculum.
The second initiative, Launch Rural Nevada, is a pitch and networking event originated by GOED that provides small businesses mentorship, access to capital and connections to agencies that assist small business.
Growing entrepreneurial businesses is one area of the state has been slow to get traction. Organic growth means RDAs don’t have to work as hard to bring in new companies.
“In the North we put a lot of energy and support of and investment in our entrepreneurs,” said Kazmierski. Organic growth has less impact on regional resources, generally companies don’t require incentives, and if a one- or two-person company is successful, it can grow into a 50 or 100 person company. “Most entrepreneurial jobs are tech related and pay over $100,000 a year,” he added.
GOED is working to create programs to support small business and encourage entrepreneurial ventures, and to get programs state funding.
“What we really want to start focusing on are businesses that are going to be low water consumers, that have a natural alliance with who we are already, and are easily or organically attracted here,” said Quigley. Businesses that support those already present are a good bet.
With southern Nevada’s growing sports industry, LVGEA targets vendors already supplying southern Nevada sports companies to find overlaps, where the same company is working for several sports franchises. Because if they’ve already got that much activity in southern Nevada, why not relocate or establish a presence there?
Land Availability
One statewide obstacle to recruitment is land availability. In southern Nevada, federally managed BLM land creates barriers to growth. In northern Nevada, both BLM land and the mountains constrain growth. Some land issues are offset by Tahoe-Reno Industrial Center east of Sparks. In southern Nevada, much of the buildable land is in North Las Vegas.
“We have Apex, a 12,000-acre industrial park with about 7,000 developable acres that is going to keep us on the map as far as land that can be developed over the next several years,” said Sheridan. Development of Apex was first stalled by the Great Recession, then by lack of infrastructure. For some time there was only well water available and only to some sites. Now the city is making investments to water infrastructure, delivering city water to Apex. With infrastructure in place, businesses should follow. Kroger and Ball Corporation are two of the businesses already on site.
Bringing in infrastructure to kickoff development works. In 2006, North Las Vegas had 1,100 developable acres by the Speedway industrial area. There was some water, but more infrastructure was needed. Since investments were made in sewer and roadway infrastructure, close to 850 acres have been developed, increasing industrial product available and creating jobs.
Climate Change
“Water challenges can affect economic development,” said Smith. “While we, as economic development practitioners, know that we must be responsible stewards for our municipalities, we also recognize that Henderson is, and can grow to be, so much more economically diverse in our job creation. We have a real opportunity to merge economic diversification and environmental priorities by recruiting clean tech companies.”
“Water is top of mind for everyone,” said Quigley. “There’s a myth that all the communities along the Colorado River are going to run out of water. Las Vegas is the best positioned for a couple reasons.” For one, the city gets return flow credits in terms of its allotment from the Colorado River because it reclaims and processes water back into Lake Mead. “The other reason we’ll fare far better than other communities dependent on the Colorado is that we have what we call the third intake, at the bottom of Lake Mead. So even if the water isn’t able to continue to flow downstream, we will still be able to draw from the base of the lake and continue to return that water back in.”
“Water is a factor. We need to be asking the right questions and understanding the needs of companies coming in,” said Sheridan. “If they’re using water for cooling purposes, what other methods might they consider in lieu of water? We want businesses to be making smart decisions and we want to be talking to businesses that are making smart decisions.”
Wish List
Not every industry is a good fit for every location. But sometimes it’s the lack of existing industry making recruitment difficult. Sometimes it only takes one company to set the ball rolling.
Until recently, North Las Vegas hasn’t been able to attract medical and associated R&D.
“We had 640 acres conveyed to the city as part of a job creation zone,” said Sheridan. From that 640, the city separated out 135 so Pacific Group can develop it into Helios Medical Center. The campus will include hotels, a hospital, some retail commercial and medical office buildings. It’s also the city’s gateway into the medical and medical R&D industry.
Most states want to add tech companies to their economic development roster. Nevada is no exception, but until Nevada has a more robust technology-related workforce, recruitment will remain difficult. At the same time, it’s likely Nevada’s attraction to advanced manufacturing companies will slow until there’s more land and infrastructure investment to meet their needs.
NNRDA has been targeting warehousing and distribution, primarily because the region is centrally located in the Western U.S., and because the industry involves big capital but not necessarily big workforce demands. That’s good for a big region with a tiny workforce. But companies require big buildings and turnkey solutions.
“I don’t have a building over 15,000 square-feet available in my area, and most of these guys are looking for 100,000 [to] 200,000 square-feet, and they want it built and ready to go,” said Mudd. “We don’t have it, nor do we have the builders that have the capacity to put together something that size in this area. If we had the buildings I could almost guarantee we could get the company to fill it within six months. It’s one of the biggest challenges with one of our target industries.”
Open for Business
Sometimes economic development is the result of economic upheavals. Both the Great Recession and the pandemic caused leisure and hospitality jobs to decline. Simultaneously, logistics and operations jobs increased. Those transitioned into advanced and assembly manufacturing jobs, leading to more technology companies coming in, leading to more R&D companies coming in, each step leading to higher paying, higher skilled jobs.
Southern Nevada now has more jobs than it did pre-pandemic. Rural communities are expanding with the ripple effect of economic activity in urban centers creating commuters.
Eight years ago northern Nevada had zero data centers. Now the region is seeing success with data centers, which are stable, high wage businesses that contribute a lot of capital investment to the region.
Industries continue to shift. Smith expects long-term diversification to growth in clean technologies, healthcare services, and smaller, more advanced manufacturing. Quigley believes economic development in the next decade will need more than industrial, logistics, and warehousing. “It will mean growth that’s appropriate for re-development and infill. It will be shifting towards higher skill, higher wage jobs appropriate with the land and the resources we’ve got.”
Every rural community addresses economic development differently. When it comes to growing desert communities, how much growth is possible while keeping the flavor of the small town?
“Everyone out here for the most part are here for a reason and they like the small town feel, they like the kind of old west culture, certainly rugged individualists, very independent, self-sustained attitude and we like that. The fact of the matter is that it’s not realistic that we’re going to have so much development that it’s going to compromise any of those things,” said Mudd. When it comes to proposed growth, Mudd relies heavily on local population and community leaders to give feedback on what’s a good fit.
Economic development doesn’t happen in a vacuum. It affects communities, businesses, and people.
“We are a team of 12 people,” Quigley said. “Economic development is really, truly a team sport with your entire community. Twelve people do not move the needle in terms of creating economic prosperity in a community.”
