The future looks bright from an economic standpoint for Northern Nevada.
RENO, Nev. — In case you haven't heard — and how could you not, with all the headlines popping up across the region for the past several months — “growth” is the name of the game right now across Northern Nevada.
Whether we're talking about high-level tech companies opting to plant their flags across greater Reno-Sparks, or scores of businesspeople relocating to Northern Nevada to raise families here, there's been arguably no better time in the history of the Silver State when it comes to seizing economic development opportunities.
And the influx of people and new businesses to the region isn't expected to stop anytime soon.
For example, in mid-November 2019, the U.S. Census Bureau released updated migration estimates, taking into account a timeframe of July 2017 to July 2018, further confirming a fact oft reported the past several months: Nevada is the fastest-growing state in the nation when it comes to employment and population. Here are some of the highlights:
As we embark on a new decade, the Northern Nevada Business Weekly's first quarterly Breakfast and Business event of the year features an expert panel who will address the region's opportunities for economic development and expansion in 2020 and beyond.
Leading up to the event, the NNBW reached out to the panelists to discuss some of the key opportunities and challenges facing the region for 2020 and beyond. Below is a sampling of some of their comments:
Nationally, the sentiment of small and mid-size businesses is that while the economy is improving, we've seen over the last year there was a sentiment of deceleration of growth, so while we're still in one of the longest expansions in history, that growth was actually slowing. But we're seeing indicators in our surveys that it's going to start turning around, and in 6 months, we're going to see the economy start to accelerate again.
My understanding is that locally (in Reno-Sparks), we have not even seen that deceleration, so we've seen a lot of sustained growth. When looking at things like unemployment, (here) it's lower than the national average ... so while we've had sustained growth, I think we're going to be even more challenged to find the employees to be able to maximize and take advantage of that growth, and that's an ongoing challenge.
There are opportunities to leverage the strong growth we've seen, but hand in hand with that, there's not necessarily the workforce available that might support that. From what I've been reading (with EDAWN's Jan. 23 State of the Economy), the idea that we have a smaller workforce here and the fact that we're challenged with affordable housing is kind of a double-edged sword. It's going to be very difficult for us to attract the kind of workers that we need because the housing is so expensive.
The statistic I read was that household income needs to be about $80,000 to be able to afford a single-family home, yet the bulk of the jobs might not be in that range. So for business owners, if there's anything that they can do to encourage legislation tied to affordable housing, that's something they can support to definitely pay off in the long term to be able to attract those qualified workers.
Continued manufacturing draw, that's the biggest thing I see because that spurs the construction industry and then the service industry. I think that's a huge opportunity — and the impediment to that is the housing for the workforce, but I think the (construction) industry is doing a good job of preparing new entries into that workforce.
The higher-tech companies from California and high-end manufacturing, places like (Sierra Nevada Corporation), high-end defense and things like that, have a real opportunity in Northern Nevada. Obviously everybody talks about Tesla and Google, so more things like that, with high sophistication — not punching out holes in paper and sticking things together. And I don't mean to belittle that (type of work) — I'm just saying I don't think that's a real good long-term investment for Northern Nevada.
I like when very well educated folks from California come in and then buy nice houses and embrace the landscape and embrace the outdoors and add something to our community. They raise the quality of the schools automatically.
(In terms of housing), I have been here since I was 4 years old … in 1991, I lived in an apartment, and then I was able to buy a house right away, and then within 10 years buy a really nice house. But in the recent past, I had to look for a new home, and I just barely got in before the housing crunch really hit hard. Now, I see so many people, particularly young people, not being able to find anything worthwhile — I see some really, really dire living circumstances for people who do make a good living, and that concerns me a lot.
It also concerns me with regard to retirement — I have about 15 years more planned, and I'm not sure what I'm going to be able to get here. I want to stay here, but if I've got to pay a million and a half to get the kind of house that I want, I don't know that I will stay. I might as well just buy a house in Incline then.
When you look at the data (presented at EDAWN's Jan. 23 State of the Economy), $15 billion of investment is coming to the region. That's a big number — Vegas has only $20 billion, so it gives you some perspective on how much is really happening here.
We have a lot going on. We have a downtown core that's in great need of revitalization, so the Harrah's sale is huge. The Court Street project (from CAI Investments, same buyers of Harrah's), which brings in a lot of high-end, Class A is big ... and then you throw in all the other things that are happening with Reno Land Inc. and Park Lane Mall, and then you go out to the (Tahoe-Reno) Industrial Center, and then farther out to Fernley — we've got a lot going on, which is really exciting.
From an opportunity perspective, I think the economy will continue to grow, I think we're going to see more great companies come into the region. Depending on your business and line of work, you can expect things to continue to move in the right direction — with one exception, and that's workforce. If you're not taking care of your employees, if you're not paying your employees, if you're not doing things to make sure you employees are happy with you, they're going to find opportunities somewhere else, because those kinds of opportunities are coming.
We have a number of things we're really pushing local governments and the community to address, and affordable housing is top of the list. That is causing us problems with homelessness, it's causing us problems in just the livability of our community. People whose rent goes up 30, 40, 50 percent oftentimes can't accommodate those kinds of increases in their budget, and so it's important for our community to do a better job of addressing that. There are a number of things we can do — build housing differently, look at infill — as a community to better to address the affordable housing challenges.
On a more esoteric level, as we're growing, I think we need to probably decide that managed growth is a good thing, just so that we don't get too far out on our skis before we have the infrastructure to support the population, the transportation needs and the education needs, so I think it's really important to say, “what do we want to look like 10 years from now?” and then work backwards and start being a little more strategic as we grow.
We've been very fortunate to have this kind of unbridled growth ... but we don't have to go after every shiny new object. Whether it's infill or it's going to be suburban sprawl, we might want to ask ourselves, are we ready to be a community of 700,000 people? These are tough decisions, but they are decisions, and you can plan for them or decide to do something else, and I think that's what we lack.
At the Chamber, with 75% of our members being businesses of 50 or less employees … the story about the stable purveyors of goods and services gets lost. The fact that our quality of life is very much dependent upon out local pharmacy and our local hair salon or florist, all the places where we get our goods and services is very important. None of us drive out to Tesla to buy a battery, but everybody shops in their neighborhood or with some small business, or a doctor's office, a deli for lunch — we sometimes overlook the fact that we're all incredibly dependent on the sustainability of small business.
And that's true for the whole country. The big, big companies get the big, big press, but your average guy who's forgoing sending his kid to college or taking out a second mortgage to keep his dry cleaning business open is providing a service that I need and I wouldn't know what to do without. So sometimes we're not as probably respectful or attentive to those businesses, yet they're the underbelly of this country. They are what make or break our quality of life wherever we live.
Sadly, we have seen all the boom and the economic development, but in fact that's part of the problem. That has raised housing prices. We have not seen an increase in mass transit capabilities, so the farther out people move because they can't afford to live close, they have no way of getting in and out of work if they don't have a car or reliable transportation or if they can't afford car insurance.
I look at life here and just wonder, how far away are we going to sprawl? At the same time, we're saying, “infill, infill, infill.” We send out a lot of mixed messages to people — meanwhile, we want the quality of life, we want to see the mountains, we want clean air, we want to be 20 minutes from Tahoe, and yet it's an hour and a half to work for someone who lives in Spanish Springs. I think we can do much more to reach out to people who live here to say, “what do you want?” Not just what big developers and corporations want.
(In regard to the ongoing issue of the region's construction workforce being stressed), those are some of the factors we look at if sometimes we unfortunately make a hard decision not to pursue a project. We are blessed with the work we have and are focused on the clients we have now. We are mindful of the resources that are available to support projects locally.
There's certainly a lot of development going on. There's private development, which creates a lot of jobs, and those people need to live somewhere so the development arm is working on multifamily, condo, townhome and residential projects. Washoe County School District is in the middle of a very robust (development) program and has been very active in development and creating jobs.
When you see a balance between private and public development, that is an indicator of a balanced economy that's moving forward. Having been through the downturn we feel like the skinny guys at the buffet. We want to put as much food as possible on the plate, but it's also important to focus on being balanced within your business and within your region and with what you know are the available resources.
I believe we're going to continue to see an exodus from California, and I believe that will come on two sides. One will be aging populations moving out, so how can we support the aging and the retirees; and then two would be as companies realize it's just so expensive to operate in California, they move more and more of their operations and people here. Already I know that there are a number of businesses that are limited because they can't find labor that they need in Northern Nevada, everywhere from low blue-collar work all the way through skilled labor and executives. So, the more we can do to encourage people to move to Northern Nevada is really key.
The majority of what we do (at ProAutomated) is around distribution centers, a lot of what we're doing is the Amazons, the Costcos, the e-commerce. Northern Nevada/Reno/Sparks has become a fantastic hub for that as companies position more of their assets in Nevada — but with easy access to California — and so certainly that helps on the e-commerce side a lot. And of course, it's the same thing with Vegas.
One of the things I'm most excited about is opportunity for recruiting into Northern Nevada — so, how we can create better recruiting companies, recruiting networks and relocation networks to bring people into Northern Nevada at all levels. I don't believe that there's enough being done. I've had two employees in the last six months who relocated to Nevada — I say employees, but they're actually high-level managers — and neither of them had Reno on their radar at all. They didn't move here because of me, but as a matter of me showing them Reno, they realized, “hey, there's actually a lot to Reno,” as well as access to Tahoe and California.
Editor's Note: Mr. Rosenau could not be reached for comment by this story's deadline, so the comments included in this story are adapted from those he provided for the Dec. 27, 2019, NNBW story, “2020 outlook: Workforce woes may impact big Reno project timelines.”
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