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October 2, 2014

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J. Patrick Coolican:

Coolican: Hollingsworth doesn’t get what Nevada needs

J. Patrick Coolican

J. Patrick Coolican

Somer Hollingsworth

Somer Hollingsworth

The Nevada Development Authority is supposed to lure businesses to Nevada and diversify our economy, but lately its CEO, Somer Hollingsworth, has had more success embarrassing the Nevada taxpayers that support the authority to the tune of a $1 million per year.

A recent authority ad campaign used talking primates to mock California’s tax-and-spend, anti-business climate, in a campaign more fit for selling salty snacks or an Internet company circa 1999.

Then there’s the billboard the authority put up near Los Angeles International Airport: “Congratulations Governor Brown! It’s déjà vu all over again.”

Get it? Probably not. It’s supposed to be mocking Brown, but people are either too young to remember the Gov. Jerry “Moonbeam” Brown of his first tenure in the 1970s, or they liked that rather prosperous period in California’s history, or they just like Brown, who they re-elected last year in a landslide.

Also, the billboard is near the airport on the heavily Democratic west side of Los Angeles. A billboard like that near John Wayne Airport in Republican Orange County? Maybe. But near LAX? Foolish.

Other authority campaigns not known for their gravitas have featured a double-decker bus that toured California giving out rubber peanuts, and a spontaneous dance troupe in Los Angeles.

In a statement to the Sun, Hollingsworth said the ads were meant to create media attention on a limited budget, which they did indeed do, although it’s not clear it’s the attention we really want. It makes us look deeply unserious, which we already struggle with anyway.

Thankfully, the authority announced last week they were taking down the billboard and moving the ad campaign in a different, more positive direction.

That’s all well and good, but it’s still not clear Hollingsworth gets it. I recall a Hollingsworth speech in April 2008 that ridiculed California while extolling all the greatness of the Nevada economy and business climate. April 2008: What was happening then? Our economy had begun its rapid demise, the whole Ponzi scheme unraveling by the day. It was the equivalent of throwing a keg party in your backyard while the bank is posting a foreclosure notice on your front door.

And that’s the thing: It’s not just the ad campaign; it’s also his public statements, which don’t put us in a very good light.

He offered up this amusing rationale to my Sun colleague David McGrath Schwartz for the talking monkey ads: “It was the only way we knew. We had to do it with monkeys — we had to use monkeys, for God’s sake!”

In a recent interview with the Las Vegas Review-Journal, Hollingsworth recounted being expelled from Nevada Southern University, which was the predecessor to UNLV, before landing at Eastern New Mexico University — because he had an uncle on the board of regents. Then he volunteered that he got a job at a Las Vegas bank because his dad knew somebody. Fun story, but we have a name for these types of transactions — “juice” — and I don’t think we want to send the message that this is how things are done in Las Vegas.

Just after recounting his college career, Hollingsworth said: “I like where the university system is going.” Slashing programs, chasing off our best faculty, raising tuition. What’s not to like?

In another remarkable interview, this again with my colleague Schwartz, Hollingsworth explained why the only way to market Nevada to out-of-state businesses is by selling our status as a tax haven with a light regulatory burden: “I certainly can’t sell our education system, can I? I have to have something.” True enough.

(UNLV economist Alan Schlottmann told me what several other economists have told me, because it’s in the data: Taxes are on the list of things that matter to a firm when they are considering moving, but pretty far down the list, below more important issues such as proximity to markets, logistics, and quality of labor. )

The NDA can point to some successes. During the boom years, it had contact with hundreds of companies that moved here, which in turn created thousands of jobs. What’s not known, however, is how many would have come anyway.

In 2010, according to the NDA, it helped bring 23 companies and more than 2,000 jobs, although clearly that didn’t offset the massive job losses we’ve experienced since 2007. Glenn Christenson, its chairman, says it has brought 10,000 jobs in five years, and tourism’s share of the workforce has dropped from 24 percent to 17 percent in the past five years, although that could be because the gaming industry has shed jobs so quickly.

Matthew Schissler, CEO of the promising stem cell company Cord Blood, offered praise for Hollingsworth and said in a statement, “Without Mr. Hollingsworth’s involvement, Cord Blood America would most likely not be in Nevada today.”

And I’ll say this about Hollingsworth: He has loyal friends. Public relations executive Sig Rogich says Hollingsworth is dedicated and hard working, and he praised the ad campaign for its ability to generate buzz. Christenson said, “Few people are more passionate about our community than Somer, and particularly with respect to diversifying our economy.” The ad campaign is old news, he said.

In any case, in Carson City and Las Vegas, among people in business and government, a low rumble is beginning to build against Hollingsworth. They are questioning, at least privately, whether he really has what we need right now.

According to Hollingsworth, he needs more money — a lot more — to sell Nevada. He wants $1 million per month instead of a $1 million per year.

“I’m sold on this state. We’re simply the best,” Hollingsworth told my Sun colleague.

The question is whether he is trying to delude us, or himself?

Having covered political campaigns, I can tell you, this is always what the failing candidate says. It’s not failed policy. We’re just not selling it. We heard this from Republicans during the worst of the Iraq war and from Democrats as the recession dragged on during 2009 and 2010.

Do we have a marketing problem? I suppose. But we also have more fundamental problems, and if Hollingsworth isn’t able or willing to recognize them, we should find someone who is.

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  1. Larger budgets always bring larger compensation for the CEO's because of "more responsibility", not demonstrated performance. They need the money 'up front' before succeeding.

    'He wants $1 million per month instead of a $1 million per year.' The philosophy is, that Hollingsworth needs more money to succeed while Nevada schools need less money to succeed. Hollingworth has two divergent strategies for success, one for him and one for public programs and employees.

  2. "I'm sold on this state. We're simply the best,"...

    Sounds empty & hollow.

    Hollingsworth the Huckster.
    The guy sounds like a Used Car Salesman.

    Low or NO taxes, it's apparent that the preponderance of potential businesses will eschew our tax haven for greener pastures, where minds are fed and thought has more depth than a wet bar rag.

    Some of the highest taxed states in the country have the best business climates, (Minnesota, for example) because their EDUCATION SYSTEMS are considered top-notch...
    think about that, Mr. Hollingsworth.
    A million a WEEK won't woo what we need to succeed if we don't have what we need to compete; BRAINPOWER.

  3. "I don't think we want to send the message that this is how things are done in Las Vegas."

    Why not? Isn't it part of the job to help new businesses integrate into the community?

  4. Taxes are low on a list for corporations because when they are uniformly applied to their competition those taxes can be passed on to consumers and to their laborers.

    What is high on the list is stability and predictability of the taxes. Threatening to raise taxes every year creates instability and discourages businesses from taking risks - like moving, expanding, hiring new workers...

    And if NDA is such a failure at this, why on earth do we think UNLV will do a good job? Seriously?

  5. "I'm sold on this state. We're simply the best," Hollingsworth told my Sun colleague.

    'The question is whether he is trying to delude us, or himself?'

    Took the words right out of my mouth, J.P.

    Good writing, as usual...but a little suspicious.

    If you would occasionally make a mistake (even a misspelled word), then I wouldn't suspect that you're a cyborg reporter from Planet Z.

    Planet Z (for the uninformed) is in a parallel dimension to Planet Stupid, the third big rock from the Sun.

  6. Glen Lerner has a crappy ad campaign...and lots of clients.

  7. "What is high on the list is stability and predictability of the taxes."
    If Patrick_Gibbons & his propaganda machine, NPRI, didn't spend every minute of every day fighting to lower taxes for the ultra rich to even lower levels than they are already at we might be able to have a stable tax expectation. Instead we have a yearly fight over them that just makes the problem worse.

  8. Newmont Mining boasts highest net income in history. Won't leave much more than a few flecks of gold dust for Nevada's tattered social safety net or at-risk kids in overcrowded schools.
    http://www.mineweb.com/mineweb/view/mine...

  9. sebring...

    Thanks for the link.
    I hope everyone takes a minute to CLICK ON THE LINK!

    It's truly amazing.
    Nevada, the state that lays the golden eggs...
    and refuses to partake of their own bounty.
    Precious.

  10. I think the state needs an organization like the NDA, however, run by someone who has at least some understanding of how to actually bring businesses into the state. Maybe what the NDA should be doing is lobbying for better education, transportation, infrastructure, rather than more money for commercials that are silly.

    I also think that Tony Hsieh and Zappo's is probably the best advertisement for Las Vegas and could do more to bring business here than almost anyone who I can think of.