Nevada is a hub state, with easy access and distribution from both ends of the state to the Western states. Northern Nevada offers access by roadways, railways and an international airport as well as additional airports in surrounding areas. Southern Nevada offers ground access to Los Angeles, Phoenix, Salt Lake City and points south. The state’s business friendly tax climate makes it a popular choice for warehousing and distribution and increasingly for internet fulfillment centers, starting with Amazon in Fernley in the north.
As Nevada continues to recover from the economic downturn, keeping product moving in and out of the state and continuing improvements on channels of distribution and modes of transportation is essential to the state’s economy.
Economic Impact
Transportation is big business. There are five commercial airports in Nevada, which translates into 313,640 jobs statewide, or nearly $11.8 billion in payroll, according to a report by Airports Council International – North America. Those five commercial airports are also responsible for over $40.5 billion in economic impact. The Reno-Tahoe International Airport creates a $2 billion annual impact according to a study done by the University of Nevada College of Business.
The Reno airport is also the leader in the U.S. for landing 737s because Southwest Airlines makes up 54 percent of the flights at Reno-Tahoe. Each time a 737 lands at the airport, it is a $100,000 economic impact for the region when all factors are considered. “All told, in a year’s time that’s more than $1 billion in economic impact from 737s alone,” said Brian Kulpin, vice president of marketing and public affairs, Reno-Tahoe International Airport.
The Reno-Tahoe Airport’s $27 million Gateway Project, which created new security checkpoints and then located the shops and restaurants past security, put 275 local construction workers to work through the contract with Q&D Construction.
In Northern Nevada, the Regional Transportation Commission (RTC) is commissioning a study to look at short-term and long-term job creation and judge the economic impact of road projects. If each construction job is assumed to pay approximately $80,000 annually, then preserving around 3,500 construction jobs is a significant impact on the local economy. “The real hard thing to grasp is the jobs we’re creating on a more permanent basis like an Amazon, where a warehouse takes advantage of the transportation investments. We’re trying to get a better analytical grip on those kinds of job creation opportunities,” said Lee Gibson, director, Washoe RTC.
When the American Recovery and Reinvestment Act (ARRA) money came into Nevada in 2009, some of the funds were used for the Meadowood Mall interchange in Reno, which opened up additional access into an area with large commercial businesses, retail stores and office buildings. Because ARRA funds had to be used for shovel-ready projects, agencies had to own rights of way and have environmental clearances in place, so much of the funding went to local county level projects. In the case of the Meadowood Mall interchange, the project was already planned and funded. The ARRA money meant another $25 million could be added to the economy and used to expedite other projects.
The stimulus money was meant to create jobs and one economic analysis showed every dollar spent on transportation yielded $1.52 direct benefits to the local economy, said Nevada Department of Transportation Director, Rudy Malfabon. Direct benefits went to the contractor of the project and indirect to the contractor’s employees who spent money in the local economy. Another indirect benefit is opening up access to businesses so people can go to businesses they haven’t gone to before and new businesses may choose to locate in areas with improved transportation access.
In Southern Nevada, RTC used ARRA money to fund projects such as the Bonneville Transit Center, one of the Valley’s primary transportation hubs, and Boulder Highway Express transit.
“We believe [investments in transportation] help businesses work more efficiently and give our region relative location advantages vis a vis other medium-sized cities in the west,” said Gibson. Expanding and improving highways makes logistics more efficient in a state already considered a transportation/distribution hub. “Businesses get the goods and services they need faster, cheaper and more timely, and I think that’s one of the contributions our transportation investments make to those marketing opportunities.”
Some of the improvements RTC Washoe made in 2012 included widening US 395 (now designated as I-580 because of the spur connecting Reno with Washoe Valley) from Moana Lane to the Spaghetti Bowl and in cooperation with NDOT, widening Moana Lane itself, a business arterial for Reno. The new Meadowood Mall interchange also opens up access to one of Reno’s business corridors.
Other less obvious projects that provide an economic benefit to the state include projects that move the workforce to and from, Project Neon and neighborhood street rehabilitation projects.
Project Neon is a billion-and-a-half dollar NDOT project the agency is trying to split up into phases it can deliver reasonably. The transportation board, headed by the Governor, has approved going forward and developing a request for proposals for the first phases of the project in Southern Nevada. One of the major components of the project will be to connect the US 95 car pool lane with the I-15 express lanes so car pool and Express transit vehicles don’t have to move from the far left lane to the far right to access the off ramp but can have a direct connection between the two freeways, a boon for employees traveling to the resort corridor.
RTC of Southern Nevada is looking into bike programs in Las Vegas, North Las Vegas and Henderson, putting in bike lanes and installing kiosks where visitors can rent bikes and ride through downtown.
In Northern Nevada street rehabilitation projects mean streets are built for pedestrians, bicyclers and cars, not just cars.
On the Ground
The interstate systems – I-80 in Northern Nevada and I-15 in Southern Nevada – carry the bulk of traffic and the freight that moves through Nevada, said Malfabon. “Nevada is a bridge state, which means the freight moves across our state from point A to point B. Some of it comes from Long Beach, Los Angeles, Port of Oakland, and goes through our state.”
Nevada Department of Transportation (NDOT) is responsible for some of the major arterial roadways in the Reno-Sparks area and Las Vegas, Henderson and North Las Vegas. A recipient of federal monies, NDOT partners with both private parties and other transportation agencies such as the Regional Transportation Commissions (RTC).
This year much of the agency’s focus will address pavement conditions on roadways across the state. Overlay projects will smooth out rough roads in Mesquite and the I-80 corridor. Other projects will include giving Clark County $35 million of federal funds for a $60 million project with the airport connector and a flyover bridge.
Another NDOT project in partnership with RTC is the Boulder City bypass, the first stage of which includes fencing off the project so desert tortoises are not wandering into the roadways. A nursery will house plants temporarily disturbed during the ground work.
RTC of Southern Nevada is responsible for phase two, the part of the project that goes around Boulder City and up the road to cross the Colorado River, Malfabon said. And RTC is looking into the possibility of making the bypass Nevada’s first toll road.
The advent of a toll road in Nevada would seem at odds with the business friendly approach that should reach out and include independent truck drivers and trucking companies that move through the state. However, when the law that permits a toll road was approved in the 2011 Legislative session, the Governor stipulated a free alternative or existing road had to be provided or left open. If the toll road plan goes through, truckers will still have the choice of continuing through the currently available U.S. 93 through town and no restrictions can be placed on that road, such as “no trucks allowed.”
At the local level, the Regional Transportation Commissions North and South are responsible for operating transit systems and doing metro planning. Coordinated planning of roadways and anything NDOT isn’t funding falls to RTC with regard to major highways and arterial roads. The RTCs also work with the ITS – Intelligent Transportation Systems, anything to do with technology and traffic management, as well as FAST, the Freeway and Arterial System of Transportation which deals with traffic signals, dynamic message signs and cameras.
RTC of Southern Nevada becomes part of the movement of product through the state in part by moving workforce. “We continue to grow our workforce mobility project, encouraging employees in the dense resort corridor to be aware of the system we’ve got,” said Tina Quigley, director, Southern Nevada RTC.
RTC is examining the potential for a bus rapid transit system to move workers along Maryland Parkway. They’re also the agency studying the possibility of making the Boulder City bypass a toll road.
“This is a pilot program authorized by the last Legislative session,” said Quigley. “It’s the only corridor or project currently by statute allowed to be considered for tolling and as a result of the effort, the Legislature may look at other corridors. The revenues would actually be used to fund construction of the project – they’d go right back into paying off [the bypass].”
One of the concerns with the proposed toll is that the route is used for moving freight. The I-11 project, which the Boulder City Bypass is part of, will connect Las Vegas and Phoenix and will eventually be a corridor from Mexico to Canada, linking trade between Mexico and the Intermountain West. The portion under consideration connects Phoenix with Las Vegas. Studies take into account the feasibility of funding the project and what percentage of the $350 million project could be funded by tolls.
In the Air
Southern Nevada is home to fewer warehousing and logistics businesses than Northern Nevada, yet McCarran International Airport, which had seen 38,489,433 arriving and departing passengers as of December 28, 2012, handled 188,509,705 pounds of cargo for the calendar year 2011, and 182,148,776 pounds through November 2012.
McCarran, one of the top 10 busiest airports in the country, features a 200,928-square-foot air cargo center through its partnership with Marnell Properties. The center is located near Terminal 3. Completed in 2012, the 1.9 million-square-foot Terminal 3 is the largest capital improvement project in the history of the airport and cost $2.4 billion.
In Reno, 114 million pounds of cargo move through the Reno-Tahoe International Airport every year, a vitally important component in moving product through the region, according to Kulpin. A good deal of that product is outbound, the result of fulfillment centers coming to Northern Nevada.
“For years we’ve had Amazon here,” said Kulpin. The combination of ground transportation that can reach most western states in a matter of days, railroads and an airport that regularly lands cargo 747s is attracting fulfillment centers to the area. “Now we have Urban Outfitters and Toys R Us taking advantage of the fact that we have a nexus of transportation here – railroads, I-80 and an airport that can land literally any aircraft that flies.”
The airport is served by FedEx, UPS and DHL, and officials are working hard to bring nonstop cargo flights from China.
Benefits for Chinese cargo carriers include the Reno-Tahoe Airport being located north of San Francisco and further west than LA, so flying Chinese cargo into the Northern Nevada airport could save carriers time and money and send the message that the region is a player in international cargo.
Another benefit for cargo carriers flying into Northern Nevada are the un-congested roadways. Cargo can wait days to get through customs in Los Angeles, and longer to get out on the road. “Fly into Reno and it’s on the road that day. The only reason to fly cargo is that it’s time sensitive, so we save time and we save money and we are also closer to Asia than San Francisco and Los Angeles, so we save them fuel cost and time for carriers coming in and out of China,” said Kulpin.
Adding Chinese cargo carriers at the Reno-Tahoe Airport could help balance cargo flights, which currently are more outbound than inbound due to the number of fulfillment centers in Northern Nevada shipping product out.
As a state that relies heavily on tourism and a growing central hub for moving product throughout the West Coast, transportation is vital to Nevada’s economy. Whether moving people or products, in the air or on land, the industry has the ability to make substantial contributions to the state’s recovery.
Joe Doucette says
What about rail?