Cities say more firms looking at moving here

By Buck Wargo

Friday, April 23, 2010 | 3 a.m.

With the local economy in a deep recession, local governments are dusting off and developing strategies to lure new businesses to Southern Nevada and are calling on the state to do more to help their efforts.

Local government officials who work on economic development said interest in moving to Las Vegas to start a business is tepid by historical standards, but there are more leads in early 2010 than at the end of 2009.

Several officials spoke April 14 during a seminar hosted by the Society of Industrial and Office Realtors.

“It is encouraging,” said Bob Cooper, Henderson’s economic development manager. “August to December was dead, but in January to March, it increased significantly compared to where we were. It is a different flavor, but an uptick.”

Cities are anticipating opportunities will develop from small California manufacturers wanting to move to Southern Nevada to lower their taxes.

Cooper said much of the latest interest has been from smaller startup companies that are forming because of the economy and interest from businesses abroad because of the perceived bargains for housing and land, he said.

Mike Majewski, North Las Vegas’ development director, said some major regional companies are starting to look at Southern Nevada, which is facing the usual competition from Phoenix. This is the first sign of activity in 18 months, he said.

The key to increasing Southern Nevada’s economy is bringing money from the outside, Majewski said.

“That is what we have to focus on first before our economy starts to roll,” Majewski said. “Economic development is creating jobs and creating demand.”

Any development efforts will take time before they are felt in the office and retail sectors, Majewski said.

Not everyone, however, was optimistic about the new leads that some local governments are seeing.

Ron Lynn, Clark County’s development services director, said he would like to be optimistic about where the economy is heading, but said an uptick isn’t likely until 2012. Looking at three months of the year won’t tell you what’s happening, he said.

“I would like to be optimistic, but I don’t want to use that as a form of denial,” Lynn said.

During the recession, cities are trying to focus on their strengths in paving the way for economic development.

Majewski said North Las Vegas has appointed a blue-ribbon panel in the industrial development sector. By the end of summer, it will have recommendations on how the city can remain competitive, which could include changes in city codes.

“We do have a lot of industrial land, but unfortunately that’s all it is right now,” Majewski said. “We are looking to create industrial sites. The panel will suggest ways to make that work to attract industry.”

In Las Vegas, Business Development Director Bill Arent said the city doesn’t have a lot of industrial property and is instead focusing on other ways to increase the economy.

“We are aggressive as we can be to recruit new companies, but we don’t have a lot of industrial land,” Arent said. “We focus on what we have (such as office space). We have the brand of Las Vegas, and we do get a lot of inquiries.”

Arent said Las Vegas is working with the Cleveland Clinic on expanding its presence downtown and working with the Smith Center for the Performing Arts to try and attract companies.

The city wants to take the concept of the World Market Center that has a year-round presence in downtown Las Vegas and expand that to other industries, Arent said. Las Vegas has also approved plans for a jewelry center.

“Our gaming downtown has dropped off,” Arent said. “Where before it was 10 percent of the market, it is now 5 percent. We realize our hospitality industry downtown needs to remain healthy, but we can’t focus solely on gaming.”

The officials said they have limited budgets for economic development and attracting firms. They pointed out the state doesn’t spend a lot of money in that endeavor, which means it doesn’t generate a lot of leads.

The local governments said they generate leads for each other because out-of-state companies might make an inquiry — but the entity receiving the inquiry doesn’t have the required land.

Majewski said Southern Nevada is paying the price for futile efforts to diversify the economy when times were good. The region would be in a much better condition if that had been a goal statewide, he said.

“We pay economic development a lot of lip service,” Majewski said. “We are paying the price now in a lack of diversification.”

The officials said more state incentives are needed to lure companies to Nevada.

Arent warned that there isn’t a “silver-bullet solution to diversify the economy.”

He suggested economic development starts with keeping existing incentives and expanding others, especially when it comes to the energy sector, so Nevada can compete with neighboring states.

Arent said the state needs to consider lowering its wage threshold to lure businesses to Nevada. Lowering them by 10 percent to 15 percent could entice more companies to come here, he said.

Cooper said the state’s incentives are outdated and more oriented toward manufacturing rather than technology or service companies. He said incentives need to be more targeted to go after specific industries.

The directors also talked about the important of the state investing in higher education and improving infrastructure as a way to lure companies.

“On my wish list would be to fund higher education so we are comparable to other states,” Cooper said. “We are so far underfunded that we don’t have the ability to compete on a level playing field.”

Majewski said the state made a mistake when it had a budget surplus and used the money to give rebates to the public rather than spend it on higher education or infrastructure.