Switch turns on economic diversification

The small steps made in Reno-Sparks to diversify the region’s economy have become leaps and bounds in recent months.

The recent announcement by Switch of Las Vegas that it would invest $1 billion to build a 3 million-square-foot data center on a 1,000-acre campus at Tahoe Reno Industrial Center comes on the heels of the announcement by Ghost Networks to construct a 50,000 high-security underground data center at Reno Technology Park. It also follows announcements by Tesla and Apple to invest billions in massive regional facilities.

Having those types of businesses plant flags in northern Nevada provides regional economic development officials with an unmatched trump card to play in their efforts to bring additional big-name companies to the region, and it also provides Greater Reno-Sparks an important buffer from the next recession to hit the region, even if that downturn is years away from rearing its head.

Pat Whitten, Storey County manager, says northern Nevada for years has been known primarily as a prime location to house West Coast distribution operations. However, the announcements by Tesla and top-tier data center businesses are further diversifying the regional economy.

“We have Walmart and Petsmart and some manufacturing, and eBay has been around since Internet was founded,” Whitten says. “But we also have seen distribution centers come and go — Toys ‘R’ us was here for three or four years before they changed their distribution model (Chewy.com has since taken its place).”

“For Switch to choose us and make the financial commit to build a campus and facility here to complement their Las Vegas operations gets us that much more of a solid base from which to weather the economic ups and downs we know we will face in the future.”

The first phase of the new data center will consist of an 800,000-square-foot building slated to be ready in early 2016. eBay will anchor the new data center, the company says. The center will connect to Switch’s main facilities in Las Vegas via a new fiber loop that will extend to Los Angeles and San Francisco Bay Area. Switch founder and chief executive officer Rob Roy says the new fiber ring places 50 million people within 14 milliseconds of data hosted at its facilities.

And that, says Stan Thomas, executive vice president of marketing and competitive expansion with the Economic Development Authority of Western Nevada, makes the Silver State the most connected state in the country.

The Switch announcement also continues to build on the momentum created by Apple, Tesla, Ghost and other firms who’ve chosen northern Nevada. Thomas says EDAWN has assisted with 10 corporate headquarters locations in just the past six months alone.

The Switch project comes with multiple layers of economic benefit to the Truckee Meadows, he adds, including hundreds of construction and high-paying technology jobs.

“It is definitely another game changer,” Thomas says. “Every one of these companies that they put in their facility will hire people to help maintain servers and everything else. We will see the initial jobs that come with the building, but also the IT jobs coming in.”

Storey County’s Whitten says the incentives offered to Switch are still being reviewed by the Governor’s Office on Economic Development. If if they are sizable, Whitten says those incentives aren’t the only reason Switch chose northern Nevada.

“Sometimes incentives aren’t necessarily everything,” he says. “We are confident we can minimize scheduling risks and provide the speed-to-vertical they need to get their operations up and running.

“This came together relatively fast,” Whitten adds. “The benefits come in multiple levels. Switch will begin with a solid number of employees but a great number will come from the individual corporations that they are hosting. These are programmers and data folks from a wide variety of clients, and getting that type of exposure for our region — Fortune 10 and Fortune 100 companies are learning the benefits of the Reno-Tahoe area and northwestern Nevada.”