Leaders bullish on economic future
Economic leaders in northern Nevada expressed strong optimism during a panel discussion on “The Real Economy: An Inside Look at Nevada’s Economy.”
Held Tuesday at the Nevada Museum of Art’s Nightingale Sky Room and hosted by Wells Fargo and USA Today, panelists were Adam Kramer, executive vice president of strategy at Switch; Marily Mora, president and CEO of the Reno-Tahoe Airport Authority; Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada; Brian Bonnenfant, project manager, UNR Center for Regional Studies; and Nancy Fennell, president Dickson Realty.
Panelists addressed questions about how Nevadans feel about the economy, what industries are driving the economy and the place of education in Nevada.
Bonnenfant, who tracks economic numbers in the state, said northern Nevada in particular is doing well. In Washoe County, jobs are up 3.8 percent, consumer spending, which is 70 percent of the economy, is up 11 percent, and gaming revenue, which was weak in this area for many years due to Indian Gaming, was up 3.5 percent.
A segment that is struggling is mining, particularly in northeastern Nevada, Bonnenfant said.
“Between 2012 and 2015, mining lost 38 percent of jobs in Elko County alone,” he said. “We’re seeing signs of recovery in mining in 2016 but mining will always be cyclical.”
Another segment that’s hurting is local government, he said. The property tax structure in the state allows tax rates to drop during recessions, but prevents increases once the economy recovers.
“They’re getting hammered by the property tax structure, not being able to recover at the rate of what they lost, and then the new demands from all this heated activity, that’s created more demand for other services (like public safety). That’s the sector that’s getting the most hammered right now.”
EDAWN’s Mike Kazmierski talked about the optimism he sees in northern Nevada, which is higher than the state overall.
“Since EDAWN focuses on the northern economy, speaking just to the north I can tell you that we’re pretty darn optimistic,” he said.
“If you’ve noticed the traffic at restaurants, on the highways, we’re back and it’s just starting.”
EDAWN is working with 150 companies considering a move to northern Nevada. In the last five years, 120 companies have come to the region.
Companies new to the area, including Tesla and Switch are “dramatically changing the (economic) landscape and haven’t even started really hiring people,” Kazmierski said.
With 120 companies in the bag and 150 prospects, “Our future looks pretty darn good,” he said.
Using the airport as an example, Mora described how community cooperation has helped the economic rebound.
Community coalitions have helped add 11 new flights in the last 14 months, Mora said.
Passenger numbers are up 8 percent for the past fiscal year and freight is up a “phenomenal” 15 percent, she said.
Reno City Councilman Oscar Delgado helped the airport secure Volaris airlines’ Guadalajara flight.
“We had not had scheduled international air service here for 15 years,” Mora said. “It was a real game changer for our community to get back into the international market.”
Senator Heller helped with the mechanism for U.S. Customs and Boarder Patrol so the airport could pay for additional staffing of the customs facility here and get additional international service, she said.
“We’ve been really fortunate to get these new flights in here, but it really has to be that the community supports the flights for us to be able to grow that in the future.”
When Safari Club pulled its convention out of Reno and relocated to Las Vegas three years ago there was a lot of blaming, she said. But it was the partnership between the Airport Authority and the Reno Sparks Convention and Visitors Authority that drew the giant convention back to town.
“It’s not enough now to just have the numbers so we have a daily or weekly flight, we have to put something more on the table to distinguish ourselves from other communities.”
More good news for Reno aviation is the coming Boyd Group’s 21st Annual International Aviation Forecast Summit hosted by the Reno Tahoe International Airport and Squaw Valley next month.
“In the last decade, we’ve had one CEO of an airline come here,” Mora said. At the summit “we’ll have about 25-30 top level CEOs, executives officers coming to see our community.
“What better time to show off what we have done here, with over 50,000 new jobs coming to our community.”
“It’s really the partnership. … It was almost like we had to go through this really difficult time back in 2008-2009 to know what we can be as a community and what we can bring to the table and to work together.”
Kramer talked about the new economy with its new jobs.
“When I look at the economy, we’re in kind of the opposite end (from the lack of jobs during the recession); we need more people in the pipeline to start feeding these high-tech jobs,” Kramer said.
“We’re attracting companies that are paying good and putting out good jobs, that have to have healthcare benefits,” he said. “We’re seeing the economy we wanted to have happen.”
The challenge now is “how do we get the students that are here ready for the jobs of the future.”
Dickson’s Fennell talked about the current housing crunch and what people are looking for when house shopping.
The rental vacancy rate is about 2 percent, she said, and home-sale prices are climbing.
“Where are people going to live when they come?” Fennell said.
The consensus is that more needs to be constructed, especially “workforce” houses and apartments for the average worker.
Developers and builders are ramping up but they’re cautious, she said.
While some fear higher home costs is a sign of a new housing bubble, Fennell said current conditions suggest otherwise. The growth rate in home appreciation since 1990 is only 4 percent.
“I think we’re where we should be,” she said. “As we have more houses built, as we have more units built, we’ll start seeing it flatten out for some prices. … The other thing is, we have jobs. We have demand. We have people moving into this market.”
Kramer said that the tech companies moving to the market recognize that the cost of living is still cheaper than the Bay Area.
“They are starting to see what we’ve all seen; this is the perfect place to grow a business.”
WNC and Nevada-based nonprofit greenUP! are working to launch a statewide green business program and to create a database for collecting outcomes that measure environmental performance for the state.