Strategic Planning for the Silver State:Economic Development and Utilities
Despite a global pandemic that had many quarantined to their homes, the Southwest has seen a large increase in population over the last several years. Nevada in particular has become a choice spot for business relocation, especially from neighboring states like California that are buried in bureaucratic red tape. And while an increased workforce bodes well for economic growth and development, Nevada faces a number of challenges including limited developable land and significant resource constraint. As the Silver State looks forward to the future, the demand for strategic planning has never been higher. By tapping into existing and future opportunities and partnering with those who can push Nevada forward, the Silver State is focused on unifying its message of a thriving economy through the balancing of resources and a focus on sustainability.
“Nevada has had a habit of kicking the can down the road in a lot of different ways,” said Kris Sanchez, deputy director of the Governor’s Office of Economic Development (GOED). “It is time that we start to look at some of the structural challenges that we have and address them so that we can do things more efficiently.”
Nevada Business Magazine and Southwest Gas recently partnered to facilitate an economic development and infrastructure forum with a panel of qualified experts. The forum featured panelists from GOED, Las Vegas Global Economic Alliance (LVGEA), NV Energy, the Southern Nevada Water Authority (SNWA) and Southwest Gas. After covering a variety of topics and the critical roles that each organization plays in the economic development and growth of Nevada, panelists took audience questions and stayed after to meet with attendees.
The economic development and infrastructure forum was moderated by Lauren Boitel, executive director of Impact NV. In addition to Boitel, the panel consisted of five experts including Kris Sanchez, Tina Quigley, president and CEO of LVGEA, Tony Sanchez, executive vice president, business development and external relations of NV Energy, JC Davis, director of customer care and field services of SNWA and Justin Brown, president of Southwest Gas. Each panelist brought a unique perspective to the present and future growth of Nevada while considering an increased focus on sustainability.
Present and Future Opportunities
Nevada is rich in opportunities for economic growth and diversification. The entertainment industry, which is already organically thriving throughout the state, is one area of continued focus for economic development. Recently, Nevada has also tapped into the sports industry by welcoming professional sports teams such as the Las Vegas Raiders, the Vegas Golden Knights and the Las Vegas Aces. This introduction has enhanced Las Vegas’ tourism industry and provided countless jobs for residents.
Additionally, Nevada is placing emphasis on attracting higher paying and higher skilled jobs by spear fishing alternative sectors of business. “[Nevada] ranked number one in the nation as to the new location of companies exiting California because of our proximity [and] because of access to the ports,” said Quigley. “It is time for us to start going after companies that make the most sense for our region, recognizing our unique strengths and our unique scarcities as well.”
One specific area of business that has gained global attention and presents a unique opportunity for Nevada is the mining of lithium. As the United States seeks to reduce its carbon footprint by moving towards electric vehicles, Nevada has been found to be rich in lithium which can be used for the manufacturing of batteries. The mining industry, which is already vital for Nevada’s economy, is consequently making a significant shift towards lithium.
“We are one of the only states in the US, and one of the unique places in the world, where we can capture the entire [lithium] industry from extraction to recycling,” said Sanchez. “Redwood Materials, about a month ago, went through our board process to receive state incentives. They are a major recycler, and they have contracts with automobile manufacturers. And so those batteries, as they complete their life cycle, will come back to Nevada for repurposing and recycling.”
Limited Land
The majority of land in Nevada is federally owned. And in light of an ever-increasing workforce, the Silver State is quickly running out of developable land. “It is amazing how other states have zero percentage of federal land and so they do not understand the concept,” said Sanchez. “Not all of the land here needs to be taken off limits for conservation. That is why these land bills are so important, because they are a balancing [act]. For every acre or ten acres that opens for development, you have to protect 100 acres for some type of monument, conservation area or national park. And I think you are going to see a lot more efforts by our federal delegation, especially while President Biden is in office, to take more land off the market. But at the same time, Senator Cortez Masto, Senator Rosen, and our congressional delegation are working very hard to strike the right balance to open up some very large parcels of land here in southern Nevada, and northern Nevada as well.”
With so much federally owned land, electing and partnering with state representatives who understand the importance of developable land for Nevada’s economic growth is vital.
“It really matters how we engage with the legislature at the federal level, the senate, the house and individual legislators,” said Sanchez. “Folks cannot relate to what we are experiencing here. The next closest states for federal land ownership are Alaska and Utah at [approximately] 63 to 64 percent, and [Nevada is] at 87 percent. The presence of the federal government here in Nevada is something that is very different the farther you go east. There is a lot of educating that we have to do about our positioning in the Southwest and why we matter in the Southwest economy and ecosystem. [That] is something we have to articulate [as well as] what is at risk by our inability to grow in this region [due to federally owned land]. We have some work to do there.”
Limited developable land, paired with more families calling Nevada home, has also impacted Nevada’s ability to meet the current and future demand for housing. Las Vegas in particular is experiencing a housing shortage which continues to contribute to the rising costs of real estate.
“Las Vegas is currently ranked by the National Low Income Housing Coalition as being the most severe affordable housing crisis and that is something that we all need to be aware of as part of economic development [for Nevada],” said Quigley. “We have a shortage of 85,000 family units, and there are 85,000 people who make less than half of the median income. To put that in perspective, the entire population of Mesquite is [approximately] 20,000 people. So, 85,000 [family units] is a lot, and it is something that we have to be talking about and making sure that as we attract new employers, we are not adding to the problem. [We need to be] attracting employers [with] a higher skilled [workforce], and higher wages.”
Balancing Resources and Needs
Nevada has earned a reputation of being business-friendly, and for good reason. Not only is the Silver State affordable to live in, but it also provides businesses with a favorable tax environment and oftentimes less regulations.
“The destination for most California companies is Nevada,” said Sanchez. “Yes, [Nevada has] inland ports and a great tax system, but we know that the real reason is because our electricity prices are 53 percent cheaper than California. That is the number one reason that we hear. When a company is looking to relocate to Nevada, they contact the utilities first.”
Utility affordability is one focal point of Nevada’s economic development. “Everybody wants affordable and reliable energy that is sustainable,” said Brown. “And because we can all agree on [that], we need to work together. It is incumbent on business leaders and policy makers to come together to create those pathways.”
Some of those pathways include educating the public and improving Nevada’s energy options through innovation. “Natural gas has a tremendous proven track record on balancing competing interests, increasing the quality of life that we all enjoy, [contributing to] energy affordability and energy reliability, and driving down economy wide emissions,” said Brown. “We are also focused on [asking] how can we improve on that? What kind of investments can we make in innovation and clean energy technologies? Whether it is hydrogen, renewable natural gas [or] using compressed natural gas for vehicles [we are focused on innovation].”
Nevada is also looking for creative ways to conserve and sustain its use of water. As Lake Mead continues to dry up and Nevada’s population increases, the Silver State is focused on strategically planning for current and future demand.
“We maintain a water resource plan and we review it every year,” said Davis. “We look half a century into the future and try to project out what our demands are going to look like. We try to look at the different hydrologic scenarios and see what our water supply will be. We have found that the key is both reducing consumptive use on a per account basis with our existing inventory of homes, businesses, etcetera, and then minimizing the impact of new development.”
From restricting grass landscaping, to creating rigid water schedules and pushing for excessive use charges, Nevada is using every available means to create policies that ensure its water supply is sustainable. And although not wholly appreciated by the public, the reality is that with a diminishing water supply, Nevada is desperate for solutions that ensure that limited water resources do not negatively impact the state’s future economic development.
“We are trying very hard at the Water Authority to not be the resource constraint that impedes our ability to develop as a community,” said Davis. “Over the last 20 years, we have been successful in being able to decouple growth from water resource impact. We are working on tools to look at the resource impacts of new development, whether that is commercial, industrial [or] residential, and what we can we do to minimize those impacts. A lot of people still do not realize that if water goes down a drain, whether it is in this building, a hotel room on the street or that house over there, we get it all back. We are the equivalent of a perpetual motion machine for water resources, meaning unlimited development to the extent that we can limit those consumptive, non-recoverable uses. We have made some fairly unpopular policy changes of late. I know people say that we are hurting their industry by increasing [their] first cost for development. In reality, our goal is not to hurt development. It is to preserve development because our water supply is actually shrinking, and you can’t conjure more water. We have to maximize the utility for the benefit of all our water resources. That is really our focus, to not be the stick that gets driven into the spokes of our economy.”
A Unified Message
In order for the Silver State to continue to thrive, leaders believe the state must unify its message for economic growth and development in all sectors and industries statewide.
“When you think about our land use planning, our climate resiliency planning, our infrastructure planning, and our economic development plans, we do not integrate those plans,” said Sanchez. “And when we think about what we are trying to achieve in our regions and communicating the voice we want to bring in federal funds, we have to unify that message. It is harder for the regions to do that if the state is not aligned. We have got to work through that process.”
Building partnerships with those who have the power to create and contribute to positive change in Nevada is one aspect of working through the process of statewide alignment. From advocating for the release of federally owned land, to attracting higher paid jobs and partnering with the community to conserve water, Nevada’s future is dependent on its ability to build partnerships that will aid its push for sustainable growth.
“The biggest partnership that we see over the next several years starts with the Federal Government and with what they have passed,” said Sanchez. “We are [also] partnering with the Governor’s Office of Energy, with different stakeholders, and some of the cooperative electric municipalities around the state that serve some of the more rural areas. Those are the partnerships that we can keep busy easily for the next decade, even if we did not have this massive growth that we are also facing. So [there are] huge opportunities [for Nevada] on the horizon.”