Q&A: Matt Crosson

By Richard N. Velotta

Friday, Aug. 20, 2010 | 3 a.m.

When Las Vegas Chamber of Commerce President and CEO Kara Kelley announced her plans to leave the organization in September 2009, chamber officials looked for a replacement who was strong in all the areas important to members.

They sought somebody comfortable with economic development and diversification, somebody who valued a strong education system but wasn’t willing to concede that throwing tax money at schools would solve every problem, somebody who had worked with a large business organization and was versed in workers’ compensation and health care plans for small businesses. And it wouldn’t hurt if the person was optimistic and had a personality that could bring disparate viewpoints to the table.

They found Matt Crosson.

Crosson succeeded Kelley in April after spending 16 years as CEO of the Long Island Association Inc., New York’s largest business organization. He helped guide Long Island through a diversification program when the bottom fell out of the region’s aerospace industry in the mid-1990s.

He headed the LIA Health Alliance Inc., a regional health insurance purchasing plan for small businesses similar to what the Las Vegas chamber offers. He also served on the New York State Board of Regents Learning Standards Review Initiative Steering Committee, charged with restructuring the state’s K-12 educational standards and on the Governor’s Task Force on Workers’ Compensation.

Crosson spoke with In Business Las Vegas about issues facing the Las Vegas business community:

IBLV: You’ve been on the job for about three months now. What are the biggest differences in the business climate here and the one you left in New York?

Crosson: The recession has hit Las Vegas harder than it hit Long Island on a relative scale, although Long Island has lost more than 100,000 jobs and Long Island also has a very severe foreclosure problem. In relative terms, this community has been hit harder.Beyond that, Long Island’s economy is much more diversified than Las Vegas’ economy. That’s a result of deliberate efforts in the 1990s after the aerospace industry declined so rapidly in Long Island. Even though Long Island’s economy was diversified, it was still hit hard by the recession and largely for much the same reason this area was hit, and that relates to housing and foreclosures.

How does your philosophy and leadership style differ from your predecessor, Kara Kelley?

I’m not sure. Kara and I spent a lot of time talking before I came here and I found that I agreed with pretty much everything Kara told me about the decisions that she made and why she made them and how the organization was run. This is the third-largest chamber of commerce in the country and this is not the third-largest city in the country, so clearly Kara did a spectacular job as president. My leadership philosophy and her leadership philosophy probably are not very different. But mine in this situation is still evolving so I guess time will tell.

What has surprised you about the business environment of Southern Nevada? Was there any preconceived notion about Las Vegas that you’ve had to rethink?

I think so. I had not been to Las Vegas before I came here for my first interview for this position. Like many people in the East, I thought of Las Vegas as the Strip and only in terms of the Strip. I didn’t know much about life in this community. What I learned was the breadth of the community and how normal life is here. People said to me as I was moving out here, “Well, what hotel are you going to live in?” They think of Las Vegas as only the hotels on the Strip and a lot of people think of this place that way. The livability of the place and the openness of the society here were things that I learned about. Probably the most surprising thing was the openness and the accepting nature of the community, largely because so many people here have come from someplace else. You don’t find that in most places.

Give me an example.

I’m the new guy on the block and I’ve been here a little over three months. I have found that people readily accept me as president of the chamber of commerce. They’ll readily listen to my thoughts and the experience I’ve had before and what benefits it might bring to this community. In most places, that wouldn’t happen very quickly. In most places, there would be more of a breaking-in period. But Las Vegas is quite unique in that respect. There are not many places in the country that are as accepting of newcomers as this place is. I think in the end, this is going to be a huge economic advantage to Las Vegas.

More than ever it seems the business community is dependent on Washington for stimulus money, incentives and tax breaks. What’s the chamber doing to ensure Las Vegas businesses get their share?

The Chamber of Commerce is an extremely influential organization politically, both at the federal level and at the state and local levels. We are the voice of the business community. We are constantly in touch with elected officials and constantly making the case for the needs of business in this community, and that extends to stimulus and it extends to bills like the small-business bill that is pending in Congress right now, which we’re in favor of. I think if it had been up to me, the small-business bill would have been done 18 months ago. It would have been the first stimulus bill that would have been done because small business is where job creation takes place. But they’re doing it now and we’re in favor of that. There is some philosophy out there that stimulus money is bad under any circumstances. Personally, I don’t agree with that. I think there are circumstances under which some government stimulus is necessary. You can never forget history and the history of this country includes what the (President Franklin D.) Roosevelt administration did at the beginning of the Depression in the 1930s and that helped. It helped economically and it helped give people hope and there are several occasions when that sort of thing makes sense.

Unemployment and the economy are obviously the biggest challenges facing Southern Nevada today. What can the chamber and its membership do to help fix these problems?

I think it’s going to be some time before cash begins to flow back into Las Vegas from visitors at the same level that this place is used to. In the meanwhile, I think there are things that Las Vegans can do to help each other, if everybody in Las Vegas remembers one simple thing: If you spend your money here, rather than going online or going to a catalog or leaving this place, that money circulates here. People should also consider that there are Las Vegas companies that have an online presence. If you buy that way, the money flows to small businesses here. It allows those small businesses to survive and possibly to hire some people. That will have some effect on the unemployment rate in the short term. That may sound like a soft thing to do, to buy Las Vegas, and it isn’t going to make the unemployment rate disappear and it isn’t going to change the housing situation overnight, but it can help. That is one thing that we can do. Las Vegans need to keep in mind that we’re all in this together now. We have to help each other get through this. That’s one thing the Chamber of Commerce can do and in the near future, we’re going to launch a variety of programs that are based on that principle. We’re all in this together and we should all help each other. Everybody’s future is, to some extent, dependent on everybody else’s future. If we can keep that in mind, we can at least moderate the pain over the next year or so.

Diversifying the economy is viewed as a necessity in solving many of our problems. What ideas are you proposing to diversify the economy?

The diversification of an economy is complicated. It is a process and it is a product. The process involves bringing the entire community together, and that means business, labor, education, the not-for-profit community and government, literally hundreds of people participating in a process in which everybody’s ideas are taken into account about how to diversify this economy. As part of that process, you need the most knowledgeable people in the community and their resources to be sure that you produce a plan — the product — that makes sense. In that final written plan, all segments of the community have a stake — education has its part, labor has its part, business has its part, government has its part, all working together to make the plan work.

The purpose is to focus on industrial clusters that can have a competitive advantage because they are in Las Vegas. What I mean by industrial clusters are main companies that attract other companies that altogether attract talented younger people to the community. That’s what your objective is. You have to figure out what those industrial clusters are. It’s not just a question of what do we think intuitively makes sense here. You have to analyze Las Vegas’ competitive position with respect to the rest of this country and even around the world, relating to industries that we think might work here.

We may think that an industry might work here for whatever reason. We have a lot of sun here. We may think that gives us an advantage when it comes to solar energy. In the production of solar energy, it probably would. But would it give us an advantage in the manufacturing of solar-energy equipment? Are there other places in this country that are way ahead of us when it comes to those kinds of industries? We need to know that. We need to understand that. That’s all part of this process, but it starts with the entire community coming together because we are all in it together. Everybody’s ideas have value and everybody needs to work themselves through the logic of the recovery of this economy.

Is this a formula that worked in Long Island in the 1990s?

Yes, this was exactly what happened in the mid-1990s and exactly that process has worked in many, many communities across the United States over the years. Los Angeles County did this same kind of process last year. They had more than 1,000 stakeholders, they had 20-some public meetings throughout the county, all to develop a strategic economic development plan for Los Angeles County. The items they put in that plan is their business; it’s the process that is the lesson for us. The process can’t be short-circuited. You have to go through it. You simply can’t have a small group of people who say, “This is what our future is going to be,” and they tell the rest of us. Everybody needs to be a part of that process in order to have buy-in from the entire community at the end.

Who puts something like that together?

I’d like to see the Chamber of Commerce and the (Nevada Development Authority) do that jointly.

Should the chamber be aligning itself more with some of the goals of the Nevada Development Authority and the Nevada Commission on Economic Development to bring more companies to Las Vegas?

Yes. I think the NDA and the Commission on Economic Development would benefit from a plan developed by the entire community, including the NDA and Commission on Economic Development with their expertise. The one thing they don’t have right now is the entire community that understands what the plan is, that buys into that plan and understands that they need to spend more money on economic development and that it supports their work. Right now, the state spends more money in two days on unemployment compensation than it spends in an entire year on economic development. That strikes me as ironic to say the least. The idea of economic development is to avoid having to spend money on unemployment compensation, and we have a huge disparity in terms of the amount we spend.

Advocates for better schools say more money is needed for education and that we’re not going to be able to diversify the economy without better schools. What’s your take on this?

I agree that you cannot diversify this economy without schools that have a better reputation than our schools have. It would be very difficult to bring companies and their employees from other parts of the country if they think that the school system is inadequate. Whether more money by itself is the solution is a separate question. The argument can be made that, yes, more money will produce better education. But there’s also a considerable amount of evidence to the contrary.

The Washington, D.C., school district is always used as the example. Washington, D.C., spends more per capita on education and gets the worst outcomes in the country. It’s a combination of the amount of money you spend and the manner in which you educate kids, the educational techniques that are used. One thing that is clear is that leadership within the schools, at the principal level particularly, is absolutely critical to a good educational environment.

I would like to see the Chamber of Commerce and the business community become much more involved with the educational system in a whole range of things.

I’d like to see the private sector help the School District figure out the best practices in noninstructional areas. I’d like to see the School District and the business community work together on educational techniques.

I’m a big believer in the principles of career education, which means not just vocational education, but teaching basic academics at comprehensive high schools within the context of a career choice. For example, if a student is interested in health care as a career choice, in many places in this country there are high schools that have health care career academies within a normal academic high school. In that career academy in health care, math, science, English, social studies are all taught within the context of health care. So the examples that are used, the problems that are presented are all within the context and background of health care. The effect that has is that if you have a student who is interested in health care, all of a sudden everything he or she is learning becomes much more relevant than it was before because it relates to something they care about. So the motivational level of students becomes much higher. Across the country, whenever this technique has been used, the results in standardized testing have increased, sometimes dramatically. I think that approach holds a lot of promise to this entire School District, in part because this School District already knows how to do it. The career and technical academies that have been created are as good as anything I’m aware of in the country and some of the comprehensive high schools are using this approach. I think if you expanded this you would motivate students, you would make the instructional outcomes better and you would involve parents and the business community much more directly in the educational process.

Where does higher education fit in?

In conjunction with what we’re saying about K-12 education, higher education also is going to be critically important to economic diversification in this region. That means both UNLV and other higher-education institutions and the community colleges. There are many levels of jobs and training that the companies would want to come here will require. At the highest level, we want a fully funded research university with a terrific reputation and in many ways, UNLV already has that. I think it needs more support from the business community and more support from government. In addition to that, the community colleges provide the kind of training and instruction that is indispensable for many, many companies. So the two go hand in hand. When I refer to education, it’s not just K-12 education. The reputation of the K-12 educational system is going to be critically important to economic diversification, but at least as important is the support that we provide to incoming businesses as well as businesses that are already here through higher education institutions.

Besides the economy, unemployment and diversification, what other issues are on the chamber’s plate and what is being done to address them?

Is there anything outside of the economy and education? (Laughs.) Probably the next major issue is transportation infrastructure. The future development of this region is going to depend in large part on our ability to modernize our road and rail transportation connections to the major cities in this part of the country. There are a lot of reasons for that, not just for the construction jobs involved but for the flow of goods and people once those connections are improved. Right after the economy and education — and almost to an equal level — is the improvement of the transportation infrastructure.

What do you view as the biggest issue ahead for the 2011 Nevada Legislature?

There are two issues that go hand in hand. One is how to balance the state’s budget without undermining the economic recovery of the state. At the same time, I don’t think the state can allow more time to pass before it positions itself where it needs to be economically and that includes education and transportation infrastructure. I don’t think you can just deal with the deficit and kick the can down the road on where the state’s economy is going to go and how we deal with education.

Kicking the can down the road. Where have I heard that before?

Well, it’s difficult. I wouldn’t minimize the difficulty of doing what I just said. It’s not an easy thing to do. This is a state that rightfully has prided itself on a low tax structure. It’s one of the many advantages Nevada has economically going forward and you don’t want to disrupt that. Finding a way to deal with all these problems and at the same time keeping the advantage we have with a low tax burden on people is tricky and it’s difficult to do that. But that’s what needs to happen.

In the past the chamber developed a reputation as opposing tax increases. Is this going to be the position going forward or will the chamber moderate its position?

The chamber, I think, will definitely be opposed to a generalized business tax if that tax is going to fall on small businesses. It makes no sense whatsoever in the economic circumstances in which we find ourselves to make it more difficult for small businesses to hire people because that’s where job creation is going to take place. That, I can say, is a flat statement. It simply makes no sense to do that. Most, if not all the state-level politicians I have spoken with agree with that. You just cannot land on the backs of small business in this economy and expect to come out of this recession any time soon. I think the chamber’s position will be we need to maintain Nevada’s advantage with respect to low taxes. We understand the need to provide high-quality services in order to bring more businesses here and diversify the economy. Within that mix, a balance needs to be struck, and we want to participate in striking that balance.

Will the chamber take an endorsement position on the high-profile Senate race? Will the process of endorsing candidates change under your leadership? Explain the process.

Traditionally, the chamber does not endorsed candidates in federal elections, so I would not expect that we’ll take a position on the race between Sen. (Harry) Reid and (Republican challenger) Sharron Angle. The chamber has already endorsed Brian Sandoval for governor and that endorsement was made at the end of April. That was an endorsement both for the primary and the general elections. We do endorse a lot of other candidates and those endorsements have already been made. The chamber structure includes a government affairs committee and it has for many years. A lot of knowledgeable, experienced and politically savvy people sit on that government affairs committee, and the political policy of the chamber is made by that committee. So no, I don’t expect it to change because of my presence.

You’ve also been appointed to the chamber’s seat on the Las Vegas Convention and Visitors Authority. What are the top issues facing the LVCVA in the year ahead?

I’ve only attended a couple of meetings, but obviously the answer to that is how to maintain at the highest possible level visitation to and spending in Las Vegas. The LVCVA has a really extraordinary record in its marketing campaigns. There are few organizations anywhere in the world that have been as effective in establishing and promoting a brand as the LVCVA has. It’s got some really smart people working on that problem and from what I’ve seen, they know their business really well. Their business right now is to try to get as much out of this economic situation across the country as they possibly can.

Do you think the LVCVA’s advertising strategy and Las Vegas’ “Sin City” image helps or hurts convincing companies to move here?

I think the strategy that has been employed by the LVCVA is largely responsible for the economy we had before the recession, which was the fastest-growing economy in the United States. So I don’t think it makes sense to criticize that success. It was extremely successful, and it will be again. When the time comes that we have a plan to bring companies to Las Vegas, then I think we are going to need to do a separate channel of marketing to the business community around this country. And I think you can do that. I think you can advertise very effectively to consumers, to travelers, to people who want to come to Las Vegas for all of the reasons people have been coming here by the millions in recent years. You can also open the eyes of savvy businesspeople across this country about what the business climate in Las Vegas is. I do think you have to do both. I don’t think you can assume that businesspeople across the rest of the United States know about all of the advantages that this place has from a business perspective without telling them. So I think we are going to have to do an additional marketing campaign that works together with our economic development plan.

You’ve said you’re optimistic about Las Vegas’ future because it’s a center of creativity. What do you mean by that?

When people talk about what the economic future of Las Vegas can be, most of the conversation concerns specific industries. One of the things that I don’t think we can lose sight of is that this place is one of the centers of creativity and entrepreneurialism in the United States. When I first came to Las Vegas for a job interview for this position and had not seen the Strip before, my first reaction to the Strip was the remarkable creativity that’s involved in the architecture, the planning and the delivery of many of the resorts and buildings on the Strip. If you see it every day, you get used to it. But if you haven’t seen it, to me, the first thing that struck me was how creative it is.

When you look at the variety of companies that exist in this community, like Zappos.com, for example, creativity flows from virtually everything that Zappos does — the management of the company, the way its employees are treated, the manner in which it markets. That’s a terrific example of creativity at a fundamental corporate level exists in this community.

One of the things I think that’s important for people to keep in mind is that creativity and the attraction that creativity can have for smart, younger, creative people is something that we should not easily dismiss. When I first drove the Strip, my first reaction was, “Holy mackerel, you don’t see anything like this anyplace in the country.” When you get into the interior spaces in the casinos … they go on and on and on in these places. There’s nothing like that in this country and I’m not sure there’s anything like it anywhere in the world.

A couple weeks ago, I was giving a speech to an organization and at the end of the Q&A portion, a fellow asked a question that was sort of pessimistic. I was talking about how we needed to stop focusing on the negative and while acknowledging that the negative stuff exists and not minimizing it, we needed to start focusing on what we could do about it and uplift people’s sense of optimism. Well this particular fellow didn’t buy into that idea too much and he asked a question that was kind of pessimistic and maybe a little grouchy, and I said, “Just keep in mind that when you leave this breakfast and you go outside into the open air, stand there and do a 360(-degree turn) and remember that everything that you lay your eyes on came out of the desert. If that can happen — if all this can come out of the desert — then we should be able to figure out a way to diversify the economy.” We’ve got to keep that in mind. This is a truly different place, a truly remarkable place. It’s bad times right now, but it was good times three years ago and it will be good times again. But if Las Vegas could be created in the first place, Las Vegas can be reinvented.