The middlemen |

The middlemen

U. Earl Dunn

Wal-Mart’s decision to build an 800,000- square-foot regional distribution center east of Sparks in Storey County did not just happen because someone in Bentonville, Ark., awoke one morning and declared,”We’re going to Nevada.” The decision instead marks another success for the decision of the region’s economic developers to target site-selection firms across the nation.

The Wal-Mart announcement, for instance, was the culmination of 20 months of work with The Carter Burgess Group by Stan Thomas, director of economic development for Sierra Pacific Resources, and Chuck Alvey, executive director of the Economic Development Authority of Western Nevada.

The Carter Burgess Group is among the most active siteselection firms in the nation.

Alvey, Thomas and Ron Weisinger, executive director of the Northern Nevada Development Authority based in Carson City, go after those site selectors, professional firms that contract with major companies seeking to find new areas in which to do business.

Among the better site selection firms is McCallum Sweeney, a firm based in Greenville, S.C., which, among other notches in its belt, helped The Boeing Co.

find a site to build its new 7E7 jetliner.Mark Sweeney, one of the principals, has become very familiar with northern Nevada and he credits face-to-face visits from people like Alvey, Thomas and Weisinger as the primary reason.

“McCallum Sweeney is a relatively new firm,” says Thomas.”But they have really demonstrated that they are on top of their game.

I guess the best part is that they know Northern Nevada exists, and we’re confident that if they ever have a project that fits with what we have to offer, we’ll get a fair shot.” Companies in the initial stages of a project turn to a site selector for basic information that can typically be found on Web sites or in finely-tuned databases.

They may wish to be near competitors or material providers.

They may ask about the labor pool and the availability of training.Also on their list will be the cost of both commercial and residential real estate.

But by far the biggest issue is taxation.

In this regard, Nevada always gets a favorable nod.

No corporate income tax.

No personal income tax.

No estate tax.

No inventory tax.

“Nevada will more than likely be competing with California, Arizona and Utah for future expansions or relocations,” says Sweeney, who acknowledged there were problems of dealing with preconceived notions.

“Your labor market is actually a lot better than we originally imagined,” he says.”We were concerned about the influence of the gaming industry.We were worried that everywhere we looked, we’d see blackjack dealers and the negative social consequences that one perceives will follow.We were pleasantly surprised and I can say we are very bullish on northern Nevada.”

Sweeney continues,”The No.

1 way to market your region is face to face.

It’s not about putting on a dog and pony show, but just visiting and talking about changes or trends that we should know about.”

Tom Tunnicliff, principal with the John Buck Company’s Strategic Advisory Group in Chicago, represents the Harley-Davidson Financial Services Co.

and was the point person asked by his client two years ago to determine whether to keep its financial services operations in Carson City, or move everything to Plano, Texas.

Tunnicliff turned to Alvey, a man he had gotten to know well over the past several years.Alvey, in turn,mustered the support of Thomas and Weisinger and, through some tough negotiations that required legislative intervention, sought and received tax incentives that kept Harley-Davidson and its 500- member staff in Carson City.

“Chuck Alvey rates a gold star in my book,” says Tunnicliff.”By most benchmarks, Plano was a winner by a landslide.

They had a high unemployment rate, yet had a strong labor pool from which to draw.

The wage rates were very reasonable.And, Texas was willing to give us incentives that were equal or better than we received in Nevada.

But, your people there demonstrated how much they wanted to keep my client and, in the end, you prevailed.”

Weisinger says at issue was the fact that the incentives available in Nevada typically apply only to new companies relocating to the state, not for retention.

And site selectors pay attention.

Amy Holloway, vice president of economic development for Austin, Texas-based Angelou Economics, says states such as Nevada “should be offering the same incentives for existing companies that you offer new ones.We do a lot of consulting and are pointing out that it is no longer the number of jobs created that is important, but instead the amount of wealth being generated.

This will require a revision of incentive policy.” Although she admits to not being totally familiar with Northern Nevada, she does cite what she called “the battle between Nevada and California for businesses.

It’s one of the most outrageous, yet bold, innovative and creative approaches I’ve ever seen.

It’s going to be fun to watch.”

“We work hard to create a favorable relationship and rapport with site selectors,” says Weisinger, whose constituency is Carson City, Douglas, Lyon and Story Counties.”Our job is to share information and communicate with them and, then, be able to turn on a dime if they call with a specific request.”

Alvey says two or three years ago there were only about a half dozen projects in Northern Nevada in which site selectors were involved.

That has changed dramatically.

“We have roughly two to three dozen projects ongoing right now that are driven by site consultants,” he says.”When we recognized how important they were going to be in the future development of our region, we decided to get out there and meet them and build a working relationship.”

Alvey says he, Thomas and Weisinger do not engage in a hard sell.

“There are no packets, no CD-ROMS, no dog and pony shows,” he says.”We visit with them in their offices, pick their brains and try to get an idea of any trends that might benefit us.

First and foremost, our job is to make them look good to their client.” Tunnicliff says his work as a site selector is limited to information available in his firm’s huge database.

“We cannot know everything”, he says.

“When Chuck and his team come in, they are bringing us information that may not be readily available to us, or if they discover we are working with a certain type of client, they might ask,’Have you considered northern Nevada?’ And, so, if we already were looking at Salt Lake City and Phoenix, we might suggest to our client that we might want to include northern Nevada as well.”

Sierra Pacific’s Thomas says the information the group has gathered over the past 18 months indicates there will be many consolidations, expansions and movement of businesses from one part of the country to the other.

“Our task is to ensure, if a site selector is coming to our area with a project, that we are on the short list of sites,” he says.