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Interesting article and what I have been advocating for a LONG time...
"But to get away from Las Vegas’ old pattern, the region will need to cultivate new, more stable industries such as health care and renewable energy, both of which the report says could grow if the community invested heavily in education and focused on using available land and empty office parks to build these industries."
At the end of the day, Southern Nevada has just two exogenous industries: (1) Mining, and (2) Entertainment/Hospitality/Convention/Casino Gaming. OK, now that I think about it, it is appropriate to treat the Military as exogenous (Nellis, etc).
The other industries are endogenous: everything to support the above, including restaurants, food service, housekeeping, cleaning, convention services, production services, etc. In the burbs everything else is endogenous (dry cleaners, restaurants, retailers, medical services, public services including education, police & fire, etc).
I'm skipping over a few outliers such as Zappos.
There are many reasons Southern Nevada's economy sux right now. My personal belief is that the other 49 states have figured out gaming is a great source of tax revenue, most of those states have opened up "Indian Gaming" so that locals can have fun in their own states rather than come to Las Vegas.
That exogenous change implies that some chunk of the gaming/casino aspect of the overall Hospitality industry just isn't coming back.
I just came back from Macau; yeah, its not the Strip, but it is good enough and a heck of a lot closer if you live in Hong Kong or Singapore or wherever.
Still, if you have a big convention where you need thousands or tens of thousands of hotel rooms, there are few places that compete with Las Vegas.
So... the Las Vegas economy is destined to languish as the other states continue to siphon off gambling revenue. Here's a clue: the #3 contributor to election campaigns around the country is Indian Gaming interests. They have rocketed to #3 in less than a decade. They know there is a ton of money to be made on internet gaming and they plan to own it.
But back to the solution.
Investing in education isn't the answer.
Instead, investing in business is the answer. This isn't Silicon Valley and never will be. But that doesn't mean that we can't develop different types of industries. The problem is figuring out who & what. There is no way government officials can select them; that doesn't work. But what WILL work is providing incentives to companies who relocate here - tax holidays and subsidized or free electricity & water, subsidized/free rent for example. Those are standard tactics that every state's economic development department already attempt to use.
If I were in control, I'd put a full court press in California in the Los Angeles area: move your business to Nevada to get out from underneath the smog and California's broken government system. Offer up any benefit that a company with 100 employees or more asks for.
"invest in education" is ineffective. that is sort of a code for "educate the people and businesses will come." Very field of dreams. Business doesn't work that way. It works the other way around. For example, years ago New Mexico was eager to attract Intel to build a Semiconductor Fab there (a Semiconductor Fab is a $3 Billion manufacturing or "fabrication" plant) there. Part of the deal was they provided property tax holidays. So Intel built a semiconductor fab. Then a funny thing happened: employees who moved there complained that the local school system didn't have the capacity for their kids. So Intel, having received the property tax holidays, ended up turning around and funding the local school expansion with the taxes they saved.
Once you put in place a new industry such as the Semi Fab in the New Mexico example, then other infrastructure develops. It is like the anchor tenant at a shopping mall. Then, and only then, will demand for new education services develop (either in HS or at UNLV). Let's say the local economy attracted a bunch of economic consulting companies, for example. Gee, UNLV does NOT offer a PhD in Economics! So demand from these new hypothetical businesses for PhDs in Econ would within a few years end up getting UNLV to offer a PhD in Economics, and its graduates would in turn be hired by the local econ consultancies.
Or lets say Nevada could attract tax preparation as an industry. I'm not talking about the strip-mall retail tax prep shops for individuals who need help. I'm talking about the kind of tax prep that Big 4 Accounting companies do for their corporate clients. Examples: an international corporation has thousands of "in-pats" and "ex-pats". The expats are US citizens working abroad - say in Singapore or Germany. Inpats are the Swiss citizens working in the US. Preparing the personal tax returns for these inpats and expats is something the international corporation does as a benefit - in the real world, it is too complicated for anyone to do this unless they are specialized (they have to know the tax laws in Swizterland and the US and how they mesh in the example above).
So, let's say Las Vegas could attract the Big 4 to put a center of excellence here in Las Vegas. As part of the deal, UNLV's college of business could put in place a Master of Science in Taxation (MST), and train up hundreds of new grads who would be hired by the Big 4.
But you can't do it the other way around. you can't put in place an MST program at UNLV and then hope the Big 4 come here.
Last edited by SportyandMisty; 04-24-2010 at 09:22 AM..
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,752,651 times
Reputation: 3587
I don't agree with that report. Who in hell gets to decide "how many people can live" somewhere? Do you want a government agency saying "well you Mr. Jones cannot move to Las Vegas but you Mr. Smith can move to Las Vegas". That is just bull. People have to right to move to and live where they want to live. Water should be treated like any other commodity- by the law of supply and demand. When demand out strips supply, raise the price and get it back in line. When people start getting water bills for $200 or more a month, they will voluntary conserve. Nobody needs to tell them to do so.
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,259 posts, read 24,752,651 times
Reputation: 3587
Quote:
Originally Posted by SportyandMisty
At the end of the day, Southern Nevada has just two exogenous industries: (1) Mining, and (2) Entertainment/Hospitality/Convention/Casino Gaming. OK, now that I think about it, it is appropriate to treat the Military as exogenous (Nellis, etc).
The other industries are endogenous: everything to support the above, including restaurants, food service, housekeeping, cleaning, convention services, production services, etc. In the burbs everything else is endogenous (dry cleaners, restaurants, retailers, medical services, public services including education, police & fire, etc).
I'm skipping over a few outliers such as Zappos.
There are many reasons Southern Nevada's economy sux right now. My personal belief is that the other 49 states have figured out gaming is a great source of tax revenue, most of those states have opened up "Indian Gaming" so that locals can have fun in their own states rather than come to Las Vegas.
That exogenous change implies that some chunk of the gaming/casino aspect of the overall Hospitality industry just isn't coming back.
I just came back from Macau; yeah, its not the Strip, but it is good enough and a heck of a lot closer if you live in Hong Kong or Singapore or wherever.
Still, if you have a big convention where you need thousands or tens of thousands of hotel rooms, there are few places that compete with Las Vegas.
So... the Las Vegas economy is destined to languish as the other states continue to siphon off gambling revenue. Here's a clue: the #3 contributor to election campaigns around the country is Indian Gaming interests. They have rocketed to #3 in less than a decade. They know there is a ton of money to be made on internet gaming and they plan to own it.
But back to the solution.
Investing in education isn't the answer.
Instead, investing in business is the answer. This isn't Silicon Valley and never will be. But that doesn't mean that we can't develop different types of industries. The problem is figuring out who & what. There is no way government officials can select them; that doesn't work. But what WILL work is providing incentives to companies who relocate here - tax holidays and subsidized or free electricity & water, subsidized/free rent for example. Those are standard tactics that every state's economic development department already attempt to use.
If I were in control, I'd put a full court press in California in the Los Angeles area: move your business to Nevada to get out from underneath the smog and California's broken government system. Offer up any benefit that a company with 100 employees or more asks for.
"invest in education" is ineffective. that is sort of a code for "educate the people and businesses will come." Very field of dreams. Business doesn't work that way. It works the other way around. For example, years ago New Mexico was eager to attract Intel to build a Semiconductor Fab there (a Semiconductor Fab is a $3 Billion manufacturing or "fabrication" plant) there. Part of the deal was they provided property tax holidays. So Intel built a semiconductor fab. Then a funny thing happened: employees who moved there complained that the local school system didn't have the capacity for their kids. So Intel, having received the property tax holidays, ended up turning around and funding the local school expansion with the taxes they saved.
Once you put in place a new industry such as the Semi Fab in the New Mexico example, then other infrastructure develops. It is like the anchor tenant at a shopping mall. Then, and only then, will demand for new education services develop (either in HS or at UNLV). Let's say the local economy attracted a bunch of economic consulting companies, for example. Gee, UNLV does NOT offer a PhD in Economics! So demand from these new hypothetical businesses for PhDs in Econ would within a few years end up getting UNLV to offer a PhD in Economics, and its graduates would in turn be hired by the local econ consultancies.
Or lets say Nevada could attract tax preparation as an industry. I'm not talking about the strip-mall retail tax prep shops for individuals who need help. I'm talking about the kind of tax prep that Big 4 Accounting companies do for their corporate clients. Examples: an international corporation has thousands of "in-pats" and "ex-pats". The expats are US citizens working abroad - say in Singapore or Germany. Inpats are the Swiss citizens working in the US. Preparing the personal tax returns for these inpats and expats is something the international corporation does as a benefit - in the real world, it is too complicated for anyone to do this unless they are specialized (they have to know the tax laws in Swizterland and the US and how they mesh in the example above).
So, let's say Las Vegas could attract the Big 4 to put a center of excellence here in Las Vegas. As part of the deal, UNLV's college of business could put in place a Master of Science in Taxation (MST), and train up hundreds of new grads who would be hired by the Big 4.
But you can't do it the other way around. you can't put in place an MST program at UNLV and then hope the Big 4 come here.
There are lots of things NV could attract. They just don't sell the state very well. LV is always sold on gaming more than anything else. I do not gamble and there is just so much more there to do but they never tell you about it because they don't make as much money when you rent an off strip hotel room (like Sams Town or Orleans) and you take the family to Lake Mead or Mt Charleston for a day. Nevada wants you in one place all day and that is the casinos.
All the other times I have went there, it has been for the NAB convention and show. That is how I got to know LV. They try to keep you on the strip all the time but I like to wonder and see some locals.
My question is this- considering that NV has taxes and other things that are pro business and considering the wild weather we have been seeing in the rest of the country, WHY don't the leaders of that state try to sell it to businesses?
If I were running the Chamber of Commerce there, at every convention, there would be huge signs around the LVCC saying things like:
LOWER TAXES THAN TEXAS- Why Go Back?
300+ DAYS OF SUNSHINE A YEAR- Why Go Back?
15th BUSIEST AIRPORT IN THE WORLD- Why Go Back?
NO TORNADOS, BLIZZARDS, FLOODS OR HURRICANES- Why Go Back?
TOP RANKED SCHOOLS AND GREAT NEIGHBOURHOODS- Why Go Back?
And I would have people walking around the LVCC talking to the business people and making contacts to see about getting them to consider a permanent home in the valley.
Interesting article and what I have been advocating for a LONG time...
"But to get away from Las Vegas’ old pattern, the region will need to cultivate new, more stable industries such as health care and renewable energy, both of which the report says could grow if the community invested heavily in education and focused on using available land and empty office parks to build these industries."
These studies always sound the alarm and then vanish into the archives...never to be seen again.
First problem is money. New and shiny campus for UNLV with the move of the more prestigous schools from UNR. 500 million? From where?
Limit zoning and property use? 1 billion or so in inverse condemnation costs.
Providing suitable sites for industry/commerce with the normal tax abatement and such? 100s of millions.
And note that it is still Las Vegas. The probabliity of getting any major financial service is pretty small. Citibank runs clerical ops here but even that was hidden in the Lakes, NV.
Mulroy points out that growth control is not part of her mission. She is supposed to provide however SNWA can...growth is a job for the County Commission and the State Legislature.
Run an anti-growth slate for the County Commission. See how well you do.
Growth is likely not an issue for the next 5 years but then watch it come back...
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