HealthcareHeroes p25Special Report

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See www.cox.com/internetdisclosures for complete Cox Internet Disclosures. Unlimited plan is limited to direct-dialed domestic calls and is not available for use with non-switched-or the speed of your service, is not guaranteed. Actual speeds vary. Rates and bandwidth options vary and are subject to change. DOCSIS 3.0 modem may be req’d, unless indicated. See www.cox.com/internetdisclosures for complete Cox Internet Disclosures. Unlimited plan is limited to direct-dialed domestic calls and is not available for use with non-switched-or the speed of your service, is not guaranteed. Actual speeds vary. Rates and bandwidth options vary and are subject to change. DOCSIS 3.0 modem may be req’d, unless indicated.

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Powering Our FutureNevada is already a national leader in renewable energy, and

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The Power of Good is Always On.

Nevada Business ad_JULY_2018-06.indd 1 6/11/2018 10:21:41 AM

4 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

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The Commentary

Lyle E. BrennanPublisher

COMMENTSlyle@nevadabusiness.com

By Whose Authority?

For more information on my Commentary and to see some of my backup research, or if you wonder why I take the position I take, go to www.LyleBrennan.com.

Time to Drain the LVCVA Swamp

2 Chronicles 7:14 (NKJV) “If my people who are called by My name will humble them-selves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”

If you caught an employee using company funds for personal use, would you pay him to retire, give him a fat performance bonus and let him continue working for you as a highly paid consultant? Not in a million years. Yet, that’s exactly what the Las Ve-gas Convention and Visitors Authority (LVCVA) has done with CEO Rossi Ralenkotter, who recently received a retirement package amounting to about $455,000. There’s no denying that the LVCVA under Ralenkotter did a great job in pro-moting Las Vegas as a tourism and convention destination. But recent news re-ports have made it pretty obvious that some of its executives were using the taxpayers’ money as personal slush funds. With an annual budget of $251 million and apparently very little oversight, there was plenty of room for dishonesty. Brig Lawson, the director of business partnerships, used LVCVA funds to purchase $90,000 worth of Southwest Airlines gift cards between 2012 and 2017. He in-structed Southwest to mark the invoices as promotional expenses, not gift cards, and then distributed them to various people within the agency. We know that Ralenkotter used more than $16,000 for personal travel, and board member Lawrence Weekly used another $1,400 for his daughter’s travel. In the end, auditors were unable to determine what happened to about $50,000 worth of cards. What private company would neglect to track $90,000 worth of cards that could be used like cash? A company that would soon be out of business! But, we’re talking about an agency that runs on taxpayers’ money. Like most government-run institutions, it doesn’t have to follow the same rules as the rest of us. There seems to be an unending supply of other people’s money, which is the easiest kind of money to spend. Thegiftcardfiasco isonly the latest inaseriesof incidents that illustrateawidespread, systemic misuse of public funds at LVCVA. It routinely violated its own already-laxexpensepolicies,fundingfirst-classoverseastripsforboardmembersand spending lavishly on high-end entertainment. Its warehouse distributed thou-sands of dollars worth of promotional gifts, including iPads and Bose speakers, without tracking where they went. The agency routinely pulled Convention Center security guards away from their regular duties to drive Ralenkotter and “chief tour-ism ambassador” Oscar Goodman around town, despite the fact that Ralenkotter received an annual vehicle allowance of $9,000. LVCVA executives learned in February 2017 that the Southwest gift cards hadn’t been properly accounted for, but they didn’t report it to the board for an entire year. After the board-appointed auditors concluded that $50,000 worth of cards was missing, LVCVA declined to pursue the matter, claiming it would cost more than $50,000 for auditors to track down the cards. Was that the real reason, or was it because they wanted to hide what really happened? After the police became involved, the board rushed into its hearing about Ralenkot-ter’s severance package before police had a chance to investigate further. His cronies all lined up to praise his years of service and voted to give him a half-million-dollar, taxpayer-funded parting gift to go along with his $400,000 taxpayer-funded retirement. North Las Vegas mayor John Lee was the only one opposing this outrageous act.CALL TO ACTION: It’s time to drain the LVCVA swamp, starting with an inves-tigation into where the missing cards went and who used them. What happened in the LVCVA shouldn’t stay in the LVCVA. The agency owes it to the taxpayers tofinallyshowsomeaccountability,setupproceduresfortrackingexpenses,and punish wrongdoers instead of rewarding them.

NEVADABUSINESS.COM

CORRECTION: The August 2018 edition incorrectly attributed the authors of the Industrial Summaries for the Second Quarter. The articles were authored by CBRE Reno and CBRE Las Vegas, respectively.

65 Face to Face Mary Thompson

66 Welcome to Nevada

67 Around the State

68 CrossFire Question 3 Nevada By the Coalition to Defeat Question 3 and by Yes on Question 3

76 Free Market Watch America’s ‘Socialist’ Generation is More Capitalist than it Thinks By Michael Schaus

82 Red Report Tracking Nevada’s Deals + Office Summary

85 Business Indicators

86 The Last Word Do you think Nevada is still a tax friendly state?

DEPARTMENTS

12FEATUREGuarding BusinessCybersecurity in NevadaBy Doresa Banning

19 INDUSTRYFOCUSBankers

78BUILDINGNEVADACommercial Property Management:Changing and Adaptingwith Nevada’s EconomyBy Jennifer Rachel Baumer

FEATURES

THIS ISSUE

08 Contents

COVERHow We Stack Up 2018

By Kay Foley

25SPECIAL REPORTHealthcare Heroes

04 COMMENTARYTime to Drainthe LVCVA SwampBy Lyle E. Brennan

OCTOBER2018

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Medical EducationFEATURE

AutomobilesFEATURE

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CPAsINDUSTRY ROUNDTABLE

LegalOpinionsSPECIAL REPORT

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8 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

Cover Story

EACH year, Nevada Business Magazine collects data comparing Nevada to other states and to past years, tracking economic cycles and delivering a snapshot of what it’s like to live in the Silver State. In thefirstedition12yearsago,Nevadawasridinghigheconomically,with4percentunemploymentandthechallengeoffindingenoughworkers to fill available positions. Then came the housing crashand the recession. In 2011, Nevada led the nation in foreclosures, bankruptcies and unemployment, and it had lost 175,000 jobs. In 2018, it’s safe to say that Nevada has fully recovered from the recession. Housing prices and home equity are up, and unemployment is down. New residents and new businesses are streaming in. Nevada leads the nation in private-sector job growth andonceagainfacesthechallengeoffindingqualifiedworkers.In 2006, Nevada education lagged far behind other states, the crime rate was dangerously high, and the state faced shortages of healthcare professionals. Although the economy has rebounded and now compares favorably to other states, these troubling issues have remained relatively unchanged.

HOWWE

STACKUP

By Kay Foley

9SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Cover Story TRAVEL & TOURISMTRAVEL, tourism, conventions and gaming are the lifeblood of the Nevada economy, directly responsible for more than 25 percent of all jobs in the state. Gaming revenue in Q2 2018 increased 3.2 percent year-over-year, the best quarter since 2008. That’s good news for state and local governments that depend heavily on gaming tax revenues. Nevada still leads the nation in casino revenue by a wide margin,althoughcasinoresortsinthestatehavediversifiedintonon-gamingofferingssuchasgourmetrestaurantsandupscaleshoppingin response to gaming competition from other states.

Visitor Volume Room Nights OccupiedConvention Delegates Average Monthly Hotel Occupancy Room Tax Collections Airport Volume Vehicle Traffic Counts*Gross Gaming Revenue (Q2 2018) Source: Nevada Commission on Tourism, “Discover the Facts”* Rolling 12 Months** Year over year

% Change**0.1%

-0.7%-0.2%0.0%1.8%2.9%

-6.4%3.2%

Travel and Tourism in Nevada

Q1 2018*56,446,72258,285,585

6,772,59783.4%

$2,428,90853,286,54324,657,332

$11,812,590

StateCaliforniaFloridaNew YorkTexasNevadaIllinoisGeorgiaPennsylvaniaVirginiaNorth CarolinaU.S. TotalSource: U.S. Travel Association. State data from 2016, U.S. data from 2017* In Billions

Economic Impact of the Travel Industry

Jobs Generated993,540902,450518,220671,960391,230329,750268,740231,310234,670229,530

15,600,000

Taxes Generated* $20.5 $13.7 $14.3 $10.9 $5.4 $7.3 $5.9 $3.8 $3.4 $3.7

$164.8

Travel Spending* $133.5 $94.0 $76.4 $68.5 $39.8 $38.4 $28.5 $25.1 $24.6 $23.9

$1,022.0

StateNevadaPennsylvaniaNew JerseyLouisianaIndianaMississippiNew YorkMissouriOhioIowaU.S.TotalSource: American Gaming Association, 2017 State of the States (2016 data)* In millions

Impact of Casino GamingConsumer Spending

on Gaming$11,257.15 $3,213.42 $2,602.72 $2,537.61 $2,216.00 $2,122.25 $2,017.69 $1,714.97 $1,691.44 $1,446.16

$38,959.00

Commercial Casino Wages & Benefits

$8,090.80 $643.07 $753.56 $621.64 $478.15 $774.09 $232.57 $321.10 $113.48 $347.16

$14,074.38

10 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

HOW WE STACK UP Cover Story

Persons per Household 2016Own Housing vs. Rent 2016Population per Square Mile 2010Median Household Income 2016Average Male SalaryAverage Female SalaryCitizenship 2016Language other than English spoken at home 2016 Commute Time in Minutes 2016Gun Ownership 2015Identify as ReligiousSources: U.S. Census Bureau, DataUsa, CBS News, Sperling’s Best Places

Nevada Lifestyle

U.S. Median2.64

63.1%87.4

576176628449298

93%21.1%

25.329.1%49.4%

Nevada2.72

54.9%24.6

$55,180$57,889$43,527

89.5%30.3%

23.137.5%35.2%

LIFESTYLEIN many ways, people who live in Nevada’s cities are similar to residents of other states, although they do experience a unique 24-hour lifestyle and many more entertainment options. Rural residents enjoy more open spaces than the national average, with only 24.6

people per square mile compared to the U.S. median of 87.4. However, parks, museums, arts and entertainment are all available throughout the Silver State, and Nevada recently added professional hockey with the Vegas Golden Knights to its list of sports options.

Education Data

Children Ages 3-4 Not in School (2014-2016)Fourth Graders Below Basic Level in Reading (2017)Eighth Graders Below Basic Level in Math (2017)High School Students Not Graduating on Time (2015-2016)Source: KIDS COUNT Data Center (50 states)

U.S. Average52%33%

3%16%

Nevada64%39%38%26%

Level of Education

Nevada23.2%85.4%

U.S. 30.3%87.0%

Adults 25 years old & over with at least a Bachelor’s Degree Adults 25 years old & over with high school diplomaSource: U.S. Census Bureau, State and County Quickfacts, 2016

SAT Scores for College-Bound Seniors

Nevada56355384%60%

U.S. 53352770%49%

Mean Score English Reading/WritingMean Score MathMet College/Career Benchmark EnglishMet College/Career Benchmark MathSource: College Board, 2017Scores range from 200 to 800 for each category

EDUCATIONUNFORTUNATELY, Nevada’s education system has once again re-ceivedfailinggradesfromthelatestavailabledata.Educationofficialsare hopeful that these rankings, based on 2015 data, will improve af-ter new initiatives that began in 2015 start bearing fruit. These include programs for students in poverty (19 percent, according to the 2018

Kids Count Data Book) and English language learners. It’s important to note, the same report says 34 percent of Nevada children speak a language other than English at home. A failing education system is not only a problem for students and parents, but for the entire state, which needs an educated workforce to help build its future.

Education Rankings (Best to Worst)

123454748495051Source: Education Week, 2018 Quality Counts (50 states and DC); Kids Count Data Book 2018 (50 states only)

123454647484950

Kids Count New Jersey

MassachusettsConnecticut

New HampshireVermont

OklahomaLouisiana

AlaskaNevada

New Mexico

Education Week Massachusetts

New JerseyVermont

New HampshireMarylandLouisiana

IdahoMississippi

New MexicoNevada

Nevada’s Lifestyle Resources

Recreation AmenityState ParksNational Park (Great Basin)National Recreation Area (Lake Mead)National Monument (Tule Springs Fossil Beds)Golf CoursesMuseumsSymphony OrchestrasProfessional Ballet CompaniesProfessional Sports TeamsRodeosWineriesSource: Various

Amount in Nevada26111

11395736

245

11SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Cover Story

Overall RankingAdults Who Smoke: 16.6%Cancer Deaths: 189.7 per 100,000 populationCardiovascular Deaths: 285.0 per 100,000 populationDrug Deaths: 20.8 per 100,000 populationDiabetes in Adults: 11.1%Low Birthweight Infants (% of live births): 8.5%Infant Mortality (per 1,000 live births): 5.3Immunization in Children 19-35 months: 71.9%Lack of Health Insurance: 11.9%Obesity in Adults: 25.8%Public Health Funding: $41 per personSource: United Health Foundation, America’s Health Rankings - 2017 Edition* With number 1 being the best for health** Out of 50 states

Nevada Health Rankings*

Ranking** 37202340423132182444

850

StateWisconsinMassachusettsPennsylvaniaMaineNorth DakotaDCTexasNew MexicoNevadaAlaskaSource: Agency for Healthcare Research and Quality, U.S. Dept. of Health & Human Services, 2016 National Healthcare Quality Report* Out of 50 states

Performance Across All Health Measures

Ranking* 12345

4647484950

HEALTHCAREHEALTHCARE rankings in Nevada continue to be a concern, especially in a state with the second-highest rate of population growth. This year’s numbers echo last year’s, and Nevada still ranks 47th in physicians per 100,000 people, although that number inched up from 197 to 200. Establishing new medical schools, such

as at the University of Nevada, Las Vegas, who just graduated their firstclass,andatRosemanUniversity,shouldhelpeasetheshort-age of healthcare workers, especially physicians.. Critical for keep-ing those burgeoning doctors in-state are new residency programs that the schools are working on establishing with local hospitals. Government leaders, medical schools and Nevada’s health system are all working on solutions to this ongoing challenge.

StateMassachusettsMarylandNew YorkVermontRhode IslandArkansasNevadaWyomingIdahoMississippiSource: Association of American Medical Colleges,2017 State Physician Workforce Data Book, 2016 Data* per 100,000 Population

Active Physicians*

Ranking 12345

4647484950

Number* 443.5377.8365.1357.5356.9203.7200.1199.0192.6186.1

CONTINUES ON PAGE 70

BUILDING A STRONG CASE FOR BUSINESS SUCCESS.

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12 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

Feature Story

EARLIER this year, the malware program VPNFilter infected hundreds of thousands ofofficeandhomeroutersandnetworkeddevices around the world. The cities of Atlanta and Baltimore experienced ran-somware attacks, the latter causing the 911 dispatch system to be offline for 17hours. Confidential data were breachedat numerous companies—Adidas, Dignity Health, Honda, LabCorp, MyHeritage, and Ticketmaster, to name only a handful. Cyberattacks, with their potentially del-eterious consequences, are a constant threat to all businesses.

By Doresa Banning

13SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Feature Story “It’s not a matter of if it will happen; it’s a matter of when. Don’t wait for when,” said Nancy Thompson, a Reno-based cyberse-curity and privacy consultant. Consequently, companies must make cybersecurity, or information security, a priority, said Mike Yoder, co-founder and CEO of WinTech LLC, a Las Vegas company that provides virtual reception-ist and visitor management solutions to businesses. “Cybersecurity is the process of pro-tecting information in the cyberworld,” Thompson said. “We are more and more reliant on computers and the data that’s on computers for everything. The more that we’re reliant on it, the more risk there is.”

Risk & Costs Information security is so critical today because companies, and society in gen-eral, continue to depend more and more on the Internet, which has become an es-sential tool for doing business, said David Langford, vice president of technology, Smart City Networks, headquartered in Las Vegas. Smart City provides telecom-munications services for convention cen-ters across the U.S. and three National Football League stadiums. Cyberattacks are a daily occurrence. Now, with the cloud and Internet of Things (IoT), the risk is elevated because the po-tential sphere in which attacks can occur is broader. Take, for instance, the example of the Las Vegas casino-hotel that got customer information stolen by hackers whoaccesseditviathe“smart”fishtank’sthermostat. “[Cybersecurity] is no longer about in-conveniencebutafinancialwar,”saidDar-ren McBride, CEO, Highly Reliable Systems Inc. in Reno, which sells and supports net-works and computers in Northern Nevada. A cyberattack can damage the reputa-tion of a company, get it sued, and cause business and revenue loss. Worst case, it can take down a business entirely.

In the U.S., a data breach costs an or-ganization an average of $225 per compro-mised record, statistics from the Ponemon

Institute and IBM Security’s “2017 Cost of Data Breach Study” showed. Costs are higher for highly regulated industries. In healthcarethecost is$380perfileand infinancial services,$336.Thesefigures in-clude notifications, legal fees, hiring ad-ditionalstaff,providingidentitymonitoringservices and loss of business. Despite the potentially catastrophic effects of a cyberattack on a business,

NancyThompsonNancy J Thompson Consulting

14 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

CYBERSECURITY

years ago, said Jonathan Davies, founder and president, Southern Nevada Cyber-security Alliance in Las Vegas. SNCA is a non-profit, no-membership organizationthat’s open to anybody and free to attend. “[Cybersecurity] is an industry that has moved very quickly and continues to move very quickly,” Thompson said. These types of attacks are the most common today:

•Phishing/social engineering: These are often-occurring, low-tech inci-dents in which the perpetrator, via e-mail, elicits personal information or money from their target by posing as another person or entity.

• Business e-mail compromise: These are a form of phishing in which a cybercrimi-nal impersonates an executive, often the CEO, and attempts to get an employee, customer or vendor to transfer funds or sensitive information to the phisher.

•Ransomware: These prevent access to a networked device until a sum of money is paid.

•Cryptojacking: These secretly use one’s device to mine cryptocurrency.

• Viruses/malware: These aim to dam-age or disable networked devices.

Attacks can be categorized as crime, espionage, warfare or hactivism (hacking whose purpose is to promote a social or political cause). The IBM/Ponemon survey showed that malicious or criminal attacks were the primary cause of data breaches in the U.S. in 2017, accounted for 52 percent of all incidents and were the most costly. Human error and system glitches each were responsible for 24 percent.

experts said in large part commercial or-ganizations in Nevada fall into two camps: those that aren’t doing anything about cybersecurity because they haven’t yet been attacked and those that are making genuine efforts but aren’t doing enough

to truly protect themselves and the data they hold. “They do it with a lick and a promise,” Thompson said. “Until they’ve had a prob-lem, an audit problem or an actual breach, quite often they don’t do it with enough care and rigor.”

PredominantCyber Incidents Today, cyberattacks are more sophisti-cated, but not always, and the perpetrators moreexperiencedthantheywere,say,five

Feature Story

MikeYoderWinTech

DavidLangfordSmart City Networks

THE next Southern Nevada Cybersecurity Alliance (snca.us) meetings, free and open to all, will take place from 5 p.m. to 8 p.m. on

September 13 and December 4 at the Innevation Center.

15SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Yoder said. Re-evaluation should be done routinely. “Conduct a risk assessment and busi-ness impact analysis at least annually and prioritize your remediation plan according to criticality of assets,” Davies said. Technical controls are tools and mech-anisms to prevent attacks from even pen-etrating the network, reaching employees’

Internal DataProtections Effective corporate cybersecurity in-cludes three types of controls: administra-tive, technical and physical, Davies said. “Today’s security arsenal employs a layered approach, utilizing a variety of dif-ferent software- and hardware-based tools that analyze multiple sources in real time to detect and prevent sophisticated attacks,” headded. “Thereareaffordablesolutionsfor companies of all sizes.” As far as administrative controls, every business should have security/privacy pol-icy and procedures that are written down andineffect.Theyshouldincludeguidelinessuch as what the information technology in-frastructure should be, how data is stored, how to mitigate against attacks, what the firewall rules area, how to detect attacksor intrusions and how to resolve problems when they arise, Yoder said. They should include which employees have access to what data, steps for removing access when a worker leaves the company, who controls what parts of the data and the like. Alsorecommendedisafinancialpolicythat, for one, prohibits employees from sending money to anyone or anywhere withoutfirstconferringwiththecompany’sCEOorchieffinancialofficerviathephone,said McBride. Because data breaches often result from employees doing something they shouldn’t or not doing something they should, training them on all things cyber-security and on the company’s related poli-cies/procedures, especially around phish-ing attacks, is crucial. Langford’s company, for example, has its employees trained in anti-phishing by KnowBe4 to prevent em-ployees from getting lured unsuspectingly into a phishing scam. Also essential is constantly updating systems, both software and hardware, and applying patches to applications, propri-etary and not, as is possible and quickly.

Monitoring and testing of servers and network systems can be done regularly to ensure they haven’t been penetrated,

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16 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

CYBERSECURITY

rity. Mobile device management is software that secures and monitors employees’ cell-phones. SolarWinds’ Orion platform allows users to view real-time statistics of their network directly from their Web browser. Gaining popularity are automation and orchestrationplatformsthatfilterout falsepositive breaches and thereby, reduce a security team’s workload. Machine learning andartificialintelligencearebeingusedtodetectandhaltsuspiciousnetwork traffic,including new threats, ones that previously haven’t been seen. Finally, physical controls are walls and fences, locked doors, security cameras, guards and the like. How much protection and what kind a company needs should be on par with its risk level, Davies said. “An organization’s security posture shouldbeofasufficientlevelofmaturitytoprotect that organization from the threats it faces, based on the likelihood of any identi-fiedthreatbeingrealized,”headded.

Assistance is Available Companies may take cues from or adopt an existing set of cybersecurity measures, created by various organizations and per-haps even specific to their industry. For in-stance, the National Institute of Standards andTechnologyoffersthe“GuidetoProtect-ing theConfidentialityofPersonally Identifi-able Information.” The International Organi-zation for Standardization’s ISO/IEC 27000 standards help organizations manage the se-curityofassetssuchasfinancialinformation,intellectual property, employee details and in-formation entrusted to them. Another source is ISACA, previously known as the Informa-tion Systems Audit and Control Association, the organization now goes by its acronym to reflect a broader range of IT professionals.ISACA engages in the development, adoption and use of globally accepted knowledge and practices for information systems. “These frameworks now are developed to such an extent that there’s no reason to develop your own,” Thompson said.

provides the first line of defense againstthreats on the Internet. SonicWall routers feature unified threat management secu-

e-mailsforinstance.Theyincludefirewalls,encryption, multi-factor authentication, antivirus software, unified threatmanage-ment routers and backup systems that can recover data from an infected computer within two to three hours, which is “busi-ness critical,” McBride said. An array of such products is available. Some of the latest ones include Cisco Umbrella, a cloud security platform that

Feature Story

JonathanDaviesSouthern Nevada Cybersecurity Alliance

17SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Feature Story Businesses may either hire employees internally to manage their cybersecurity, outsource to one or more of the providers inthegrowingfieldoremployacombinationof strategies. For instance, Smart City Net-works has an in-house network operations centerstaffedwith17peoplewhoaretaskedwith monitoring the company’s networks across the U.S. Each employee bears some cybersecurity responsibility. Three are dedi-catedtoconfiguringandmonitoringfirewallsfor maximum protection. Another three en-sure Windows and antivirus programs get updated and the Linux systems and Win-dows servers get patched, as necessary. “The outsourced cybersecurity market-place is growing exponentially, as savvy chief information security officers chooseto ‘buy it rather than build it,’” Davies said. “Common security functions such as secu-rity operations centers, vulnerability man-agement, identity and access management are now available ‘as a service.’”

Evolving RegulatoryEnvironment A primary challenge for companies is staying current with and meeting the re-quirements of the data protection/privacy regulations effected by industry and gov-ernment. The number of these laws is grow-ing,andeachhasdifferentmandates. For instance, the European Union’s Gen-eral Data Protection Regulation (GDPR), which wentintoeffectinMay,regulateshowcompa-nies protect the data and privacy of EU-based people. Because the GDPR applies to organi-zations outside the EU that collect or process personal data of individuals in the EU, Nevada companies who, say, sell their products or ser-vices in the EU are subject to it. The U.S. may follow the EU’s lead and enact similar legislation. Earlier this year, the Canadian government considered up-dating its own personal information and privacy laws to allow its citizens more regu-latory tools to protect their personal infor-mation online. In June, California passed

the Consumer Privacy Act of 2018, which goes intoeffect in2020. Inpart, itaffordsconsumers the rights to know specificsabout the data a business has on them and to have a business delete their personal in-formation, with some exceptions. Regardlessofthedifficultiesinvolvedinimplementing, managing and updating vari-ous protections, cybersecurity is a must for Nevada businesses.

“Don’t ignore it,” Langford said. “Don’t stick your head in the stand and say, ‘It hasn’t happened to us…yet.’ Make sure that you have some awareness about cy-bersecurity and the types of systems that can detect, prevent and correct cyberat-tacks. And make the commitment to spend some resources in making sure that all of that is up to date and kept up with because it’s constantly changing.”

Sponsored by

Bankers T. Ryan Sullivan, Bank of George • James York, Valley Bank • Terry Shirey, Nevada State Bank • BJ North, Plumas BankJohn Zaby, Mutual of Omaha Bank • Connie Brennan, Nevada Business Magazine • George Burns, Nevada Financial Institutions Division

Phyllis Gurgevich, Nevada Banker’s Association • Brian Formisano, Wells Fargo Bank • Robert Sandhu, First Savings Bank • Bruce Ford, City National Bank

LEFT TO RIGHT

PHOTOS BY: Chris Tucker

20 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

come in and audit us, they want to help. They cleaned house, they’ve done their job and saved the day and they’re interested in coming in and having reasonable conversa-tions. Their job is to audit us and point out the soft areas, and that’s what we need them for. The relationship is good, both with the state and at the federal level. We know the examiners well and they know us well. They look at our reports on a regular basis but, when they come, they feel like they know our portfolio.Itgivesthemmoreconfidenceandtheyshowmoreconfidence.GEORGE BURNS: As far as regulators go, the major conversation that we have been hav-ing with the FDIC is applicability. With all of the regulations that have been out there from Dodd Frank, we keep asking a question when we go into a particular institution. That question is: Is this really applicable? The fightwehadpreviouslywas,theyweretry-ing to apply everything to everybody. They have been very receptive in looking at appli-cability. We don’t want to repeat the past, or make the same mistakes of the past but, at the same time, we really have to look at how everything is applying.

ARE YOU SEEING STAFFING ISSUES?BRUCE FORD: That’s probably the biggest challengeintheindustry,findingqualityandwell trained talent. In the old days, we used to have training programs and we’d teach people. The industry stopped that a few years ago so there is a dearth of talent. It’s reallytoughtofindhighqualitypeople.BRIAN FORMISANO: The outlook on career path today, versus maybe 10 or 15 years ago, iscompletelydifferent.Before,theconversa-tions might have been around slowing down to gain the right experience to be properly prepared. [Now] a lot of folks are looking at other lines of business, outside of commu-nity banking, or even other industries, to be able to determine where they see them-

ingtolookdifferentaswecontinuetomoveforward. Banking is really going to change and that’s going to impact how we’re viewed and what the people on Capitol Hill think we should or should not be doing for consum-ers and small business. If they’re looking at changing the way small businesses are looked at when you are giving them a loan, that changes the ability to lend to small busi-ness, which could be problematic.PHYLLIS GURGEVICH: On the federal level, S2155 passed. Now comes the hard work of the regulations being developed. Our mem-bers, and banks across the country, will be involved in providing feedback and making sure new regulations match the intention and don’tstifletheabilityforbankstoservetheircustomers. More than anything, [S2155] is really for community banks. Its not repealing or pulling back Dodd Frank, it’s right sizing and fixing some of the unintended conse-quences. There was an overabundance of regulation. Sometimes, the bigger problem is that [regulations] are not meaningful or appropriate to the business model that the bank operates in. With some of the relief un-der this Bill, we’re hoping that banks can get out of this endless cycle of compliance.JAMES YORK: [Regulators have] a more co-operative attitude with respect to, when they

n industry that saw major chang-es and new regulations after

the recession hit, banking has endured a host of ups and

downs. Currently in an upswing, the indus-try is cautious and working toward smart growth. Recently, banking executives met at theLasVegasofficesofCityNationalBankto discuss banking and talk about some of the changes they’re seeing. Connie Brennan, publisher and CEO of Nevada Business Magazine, served as mod-erator for the event. The magazine’s monthly roundtables bring together leaders to dis-cuss issues relevant to their industries.

IS THE BANKING INDUSTRY OVER REGULATED IN TODAY’S ECONOMIC ENVIRONMENT?BJ NORTH: It’s getting better with some of the changes that have been made. The in-dustry is moving so quickly and that is going to create continued regulations and compli-ance. We’ve had some bills passed that have improved the regulatory issues. But, it’s go-

A

Industry Focus BANKERS

21SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

selves 15 or 20 years from now. Keeping people engaged in current positions, seeing the outlook for the future and then looking for talentisalittlebitmoredifficult.JOHN ZABY: Finding quality talent, the folks that are able to manage relationships and bring in business and manage it from start to finish, isvery tough.The trainingprogramsaren’t there from the credit standpoint. You get to a point where you’ve got business de-velopment folks that can do a good job but maybe don’t have the credit skills.TERRY SHIREY: I fully agree on the talent is-sues. I’m really excited for what the Nevada Banker’s Association is doing to help in that regard. The industry has not done a good job marketing itself to talented college students. We have fallen out of favor as a desired pro-fession. I don’t think we’ve done a good job explaining the great career paths that exist in banking, the great career you can make. And, we’re competing, not only for custom-ers with technology and fintech (financialtechnology companies), but we’re compet-ing for talent.

WHAT EDUCATION PROGRAMS ARE AVAILABLE FORTHIS INDUSTRY?GURGEVICH: The Nevada Banker’s Asso-ciation and its members came together tofix[thetalent]problem.Weareworkingwith UNLV and the program that will be cre-ated will be a banking program, similar to what Texas A & M has. It will be a two-year program in the finance department. Ourfirstgraduateswillbe in2020. It’smovingalong because our members are coming to the table, working with UNLV and mak-ing it happen. We will also be looking at programs for “accidental” bankers. For someone who finds themselves withoutthe formal education background but now are a banker and would like to pursue it as

WHAT IS HAPPENING WITH INTEREST RATES?BURNS: From a regulator’s point of view, the biggest challenge our banks are facing is in-terest rate risk. The rising interest rate envi-ronment that we’re in is because of the very low interest rates [we’ve had]. A lot of banks went long on their security portfolios. Now that interest rates are rising, are they going to be able to get out of them quickly enough to manage that risk? That’s something we are watching very carefully.ZABY: One of the things we are all faced with is the interest rate spread. The competitive nature of it is such that you know the deal is not just from banks but from other outside lenders. [They are] really putting the pres-sure on the spreads. Rates are climbing up and we’re not seeing the spreads on some

a career path, we want to have programs available for those bankers.YORK: In two years we’ll have 22 graduates, at least.

Industry Focus

22 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

of those good quality deals climbing up with them. It makes it tough to try to make that dollar. YORK: Rates have been low for so long. They are rising on the deposit side but they’re not rising at the same level on the lending side because of the competition. The com-petitionforagoodloanisveryfierce.Weallknow it. We are going to have to hold our in-terest rates down on the commercial loans to be competitive and put the loans on the books. That also leads into credit risk. To be competitive we are going to be tempted to be looser on the credit side of things to get deals on the books. We just can’t af-ford to do that. We have to maintain our credit risk, at the same time we’re going to be losing margin on our loans because we are going to still have to do loans at prime [interest rates].T. RYAN SULLIVAN: We’re dealing with [inter-est rate risk] as an industry and we haven’t

had to deal with this for about 15 years. The direction of interest rates has started to be-come less uncertain; you could take a look at theyieldcurvetofigurethatout.Wheninter-est rates are zero, you know where rates are headed. Now, the market is telling us they could go up for a while, but then, they could also come down.

IS THIS A GOOD TIME TO GET A LOAN?

FORD: We certainly think now is a great time. They can lock in some rates before they go up further. There has been tax changes so there’ssometaxbenefitsnowandtherearerealbenefitstodoingit.Theeconomyisro-bust and there is high demand. This is a fan-tastic time for a business person to borrow. SULLIVAN: Borrowing risks are historical-ly very low. Credit spreads have shrunk

so, even though short term rates have come up, the borrowers still, historically speaking, have very attractive borrowing opportunities.

HOW DO YOU STAYIN FRONT OF FINANCIAL FRAUD?SHIREY: You have to spend a lot of money. As the industry moves towards technology, and delivering products and services to clients through technology, it’s an equal increasing amount you have to spend to protect against it. There have been enhancements. The chip card technology has reduced our debit and credit card fraud a lot. But, there’s more cre-ativity now by fraudsters around social en-gineering.[Thereare]differentfraudsgoingon at the branch level. People are walking in tobranches and figuringoutways to steal

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money from the bank. It’s an ongoing, evolv-ing issue that is really at the heart of what banks do. We have to be a trustworthy place for our clients to have their money. We have to really prevent, even the appearance, that we’ve let something slip through. FORMISANO: From a technology standpoint that’s where we see the biggest risk going forward. Going back 15 years, the biggest issue a branch had to worry about is a quick change artist coming in or someone steal-ing an identity. Now, with the innovation of funds transferring, that’s where we’re seeing the biggest issues right now, from a fraud perspective. As we continue to advance technology, this is a space that we have to be able to get our arms around. In many ways, it’s not only about developing better programs, it’s also about bringing in the right talent that’s able to help us to be positioned properly for the future.ROBERT SANDHU:Itsabalancingact.Wedefi-nitely want to serve our customers in a more convenient and timely way, but we also want to try to reduce risk associated with cyber secu-rity. That’s the balancing act we are faced with.

ARE BANKS BUILDING FEWER BRANCHES?NORTH: We’re not going to put a branch on every corner. We’ll have, what I call, a moth-ership and then [we’ll have] a little boutique shop or technology. Our clients can bank anywhere, on their phone, at home or [they can] put the bank on their desk. We want them to come in when they really want to have advice and counsel and talk about things that are impactful to their business ortheirfinancialsecurity.We’renotlookingat heavy brick and mortar, as a community bank. We’re looking at expansion but, I don’t think you’re going to see the same kind of expansion.We’regoing to have to figure itout. The brick and mortar, it’s not the answer. Will it go away? No. People still want to see something that houses their money.

YORK: You’ll have a minimum amount of brick and mortar in the communities that you serve. They still want to see you across the street. And, if they want to go talk to some-body, they can do that. That could change with the next generation but, for what we do, small businesses, I think the businesses will still want that [bank] in their neighborhood. You’ve got to be approachable other than just

a conference call or a webinar, they need to be able to sit down and have a face to face.FORD: There is some comfort [in having a physical branch], especially with our older clients who have more wealth. They can actually see and touch someone. It’s a combination. You don’t need as much brick and mortar but, you can expand. We’re expanding.

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SHIREY: We actually did a survey a couple of years ago and the number one deter-minate of where somebody banked was proximity to a branch. It’s a really inter-esting dynamic. We see branch transac-tions down 20 percent year-over-year, ev-ery year. We’re looking at it and we’re not adding branches but we are repositioning branches. It’s more about having them in the right location.

WHAT IS THE OUTLOOK FOR BANKING IN NEVADA?BURNS: Nevada continues to be one of the nation’s leaders in a lot of measures. Nevada banks have the highest average return on asset ratio in the nation for the entire year of 2017. With all of those

economic fundamentals, average loan growth is, right now, relatively weak. The thing in Nevada that’s most impres-sive to us, as regulators, is the average risk based capital ratio in Nevada is 20.4 percent, which is the highest in the na-tion. We have the best capitalized banks in the nation here in Nevada. The offside to that is the fact that it means they’re not deploying capital into loans.SULLIVAN: I would say, in the next year, there’s still some good opportunity. We deal almost exclusively with small- and medium-sized business owners. The forward looking capital investment for this next year has gone down a little bit. But, it’s still expected to grow.SANDHU: I think [a year from now], the discussion points are going to be the same. There is still going to be concerns with technology, there is going to be ex-pansion. When I say expansion, [I mean] specified locations that provide the right products and services to customers to meet their needs for convenience and also timeliness.FORMISANO: A year from now the top-ics will still be the same but I’m inter-ested in where we are a year from now. More of the focus is going to be around, maybe not so much being able to hire the right talent, but it’s more going to be around how to keep up with the growth of our economy and making sure we’re supporting sustainable growth for the future.NORTH: I think our real focus is help-ing the client achieve what they need to achieve. If I can’t do it, I’m certainly go-ing to find somebody that can help them because everybody grows. It’s good for the community, it’s good for the client and it’s good for the bankers. Having a really good relationship with all of your fellow colleagues at different banks makes a stronger banker community, but also makes a stronger community for the people that we serve.

Industry Focus BANKERS

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65SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

THOMPSONType of Business: Risk Management/Insurance | Hails from: Buffalo, New York14 years with company in Nevada | Based in: Las Vegas, NV

“Never breaka promise.”

How did you first get intoyour profession?Iobtainedmyfirstinsurancejobthrough an employment agency.

What is your pet peeve? Blame and defending one’s mistakes.

What do you want yourlegacy to be?Someone who always helped others to maximize their potential.

When you were a kid,what did you want to be? President of a company that cared about people.

What do you wish you wouldhave learned at the beginningof your career? Never settle for a support position.

What business advice wouldyou give someone just startingin your industry? Create a culture that you envision and stay committed to it. Make sure thatyouractionsarereflectiveofyour vision.

What is a little knownfact about yourself? My love to dance. I learned from my parents. I was an instructor as a young adult. I taught my children/grandchildrenconfidencetoexpressyourself through love of music.

If you could be any fictional character, who would yoube and why? Xena – She’s always optimistic and helps others see the good in every situation.

MOVERS & SHAKERS

Faceto Face

If you could have coineda single phrase of wisdom,what would it be? Never say TRY; always say I CAN.

If you could take back onesentence you’ve ever spoken,what would it be? “You are not worth what you earn.”

What is the best momentof your career? When I realized that I didn’t have to settle because someone else believed in me.

What was the toughest lesson you’ve learned in your career? Never let them see you cry.

What is your motto? Never break a promise.

MARYPresidentCapstone Brokerage (21 years in Nevada)

66 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

BBSINew to Las Vegas, BBSI is a business management solution company that was founded in 1951. The company opened its first Southern Nevada of-fice last month and has a total of 58 physical offices. BBSI helps compa-nies deal with payroll, employee ben-efits, workers’ compensation and com-pliance issues, among others. The new branch is located in Summerlin.

Bently HeritageA distilled spirits manufacturing business, Bently Heritage was established in April 2016. The company has created a sustainable estate distillery in two historic properties near downtown Minden in Douglas County. The distillery is expected to open this fall. Bently anticipates providing six jobs and producing over $4 million in capital investments.

Bigelow AerospaceRecently, Bigelow Aerospace has announced additional jobs and over $51 million in capital investments to Clark County. The space technology company manufactures and develops expandable space station modules. Bigelow as launched a new product, a fully autonomous stand-alone space station that includes a complete suite of life support systems.

Cynaco CompanyManufacturing and marketing chemi-cal products, Cyanco Company has an-nounced 20 new jobs and a capital in-vestment of $45.5 million to Humboldt County. The company currently has of-fices all over the country. Cyanco started producing liquid sodium cyanide in 1990 at a single plant in Winnemucca and add-ed a second 1997. Today the two plants produce 240 million pounds annually.

G4 WorksA subsidiary of Allegiant, G4 Works has announced an additional seven jobs and almost $100 million in equipment and aviation parts. G4 Works will strengthen the operational efficiency of Allegiant’s aircraft maintenance in the region. The company will oversee the Clark County facilities responsible for housing the aviation parts and tools necessary to keep Allegiant’s aircraft flying.

Figure Technologies, Inc.A financial technology company, Figure Technologies has the mission of leveraging blockchain, AI and ad-vanced analytics to unlock access points for consumer credit products. The company has announced 65 new jobs to Washoe County. Figure pro-vides home equity release solutions as well as financial literacy products via content and support online.

Welcome to Nevada

67SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Around the StateFirst 15 Miles of Interstate-11 OpensThe Regional Transportation Commission of Southern Nevada (RTC) and Nevada Department of Transportation (NDOT) opened the first 15 miles of Interstate-11 (I-11) last month. The $318 million project at the Nevada-Arizona border is the first step in connecting Las Vegas and Phoenix, opening up a major trade route between Canada and Mexico. Currently, Las Vegas and Phoenix are the only cities with over a million residents not connected by an interstate highway. I-11 broke ground in 2015 and has been funded with $249.2 million in federal funds, $5 million in state funds and nearly $63.8 million in Clark County Fuel Revenue Indexing funds.

Back-to-School Spending Expected to Exceed $369 Million in NevadaAccording to the Retail Association of Nevada (RAN), back-to-school shoppers are expected to spend over $369 million on new clothes, backpacks and school sup-plies to gear up for the new academic year. With the school year starting last month in most Nevada schools, back-to-school shopping is second only to holiday shop-ping as the biggest retail event of the year. Nationally, the average house is expected to spend $942 with electronics generally the biggest spending category.

CIS of Northeastern Nevada Receives Donation for Tele-Mental Health CounselingCommunities in Schools (CIS) of Northeast-ern Nevada has received a $10,000 donation from the Northeastern Nevada Regional Hos-pital to support a tele-mental health counseling program in Elko County schools. The dona-tion will allow CIS to continue partnering with the University of Nevada, Las Vegas to provide rural communities access to mental health ser-vices for students 12 years and older.

Tier II for Net Energy Metering Excess Energy Credit Has Been OpenedEarly last month, the applied-for and actual-ly-installed capacity for the rooftop solar net energy metering (NEM) program in Nevada exceeded a combined total of 80 megawatts under the Tier 1 excess energy credit rate structure, leading to the opening of Tier II. Customers in Tier II of the program will re-ceive an excess energy credit of 88 percent of the retail rate for the net excess electricity sent back to the grid and beyond what was delivered to them by NV Energy over the monthly billing period.

68 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

CrossFire

QUESTION 3 NEVADA

Question 3 is a constitutional amend-ment on this November’s statewide ballot that would raise our electricity rates, elimi-nate consumer protections, and lock a risky experiment into our state constitution. The deeply flawed ballot measure would force Nevada to dismantle its current regulated electricity system – one of the most reliable and affordable in the nation – and replace it with a new, unknown system established by the legislature and the courts. The reality is we do not know what we are voting on with the extremely vague word-ing of this ballot measure. The proponents have not provided any details or instructions on how Nevada’s new electricity system would be set up or function.

Because Question 3 contains ambigu-ous and contradictory language, it would spark significant legal challenges and court battles over its implementation. This uncer-tainty would slow investments into Nevada’s energy infrastructure, hurting economic development and jeopardizing thousands of good-paying jobs. Question 3 would also make Nevada the first and only state to deregulate its electric-ity system through a constitutional amend-ment, locking this risky experiment into Ne-vada’s Constitution. When things go wrong, it would take at least four years and multiple legislative sessions to repeal it from our state constitution. Many states1 – including Nevada in the late 1990s – tried unsuccessfully to deregu-late their electricity systems. It resulted in significantly higher electricity prices, less reliable service, rolling blackouts, spikes in customer complaints, and predatory market-ing scams that target seniors and consumers on low and fixed incomes. Question 3 would cost Nevada consum-ers billions. According to the Public Utilities Commission of Nevada (PUCN)2 disman-tling our existing electricity system would cost consumers at least $4 billion. That’s be-

cause the state’s major energy provider, NV Energy, would be forced to divest its generat-ing facilities and power plants. Nevada rate-payers would remain liable for any financial losses incurred for these stranded costs. The PUCN also found that implementa-tion of Question 3 would result in upwards of $100 million in new start-up costs, and more than $45 million in new annual op-erating and maintenance costs, money that would come directly out of the pockets of residential customers and small businesses in the form of higher electricity rates and higher taxes. For example, residential customers in southern Nevada could see a monthly in-crease of up to $28, and some northern Ne-vada commercial customers facing a nearly $370 per month increase for at least a decade. Today, Nevada’s average electricity rates are already lower than all 14 deregulated states. In fact, in those deregulated states, average residential electricity rates are 30% higher than Nevada’s. Question 3 would damage Nevada’s re-newable energy sector3 and would eliminate Nevada’s current rooftop solar program. If passed, Question 3 would eliminate Nevada’s existing rooftop solar program.

ne of the questions on this November’s ballot, Question 3, will address energy in Nevada. A proposed constitutional amendment, the question must be approved in two consecutive election years. Having passed in 2016, this is the second time it’s appeared on the ballot. The question reads: “Shall Article 1 of the Nevada Constitution be amended to require the

Legislature to provide by law for the establishment of an open, competitive retail electric energy market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity?” Nevada Business Magazine asked both sides to state why they oppose or support Question 3. The responses follow.

OA NEVADA CONSTITUTIONAL AMENDMENT ON ENERGY

ENERGY & POLITICS

by the Coalition to Defeat Question 3(noon3.com)

Why do youOPPOSE

Question 3?

1Are Consumers Benefiting from Competition?: An Analysis of the Individual Residential Electric Supply Market in Massachusetts by Massachusetts Attorney General’s Office, March 2018; Electricity Prices Expected to Skyrocket this Summer by L.M. Sixel, Houston Chronicle, June 11, 2018; Regulators Blast Electricity Providers for Deception by L.M. Sixel, Houston Chronicle, June 28, 2018; Regulators Seek Default Pricing on Monthly Utility Bills byJeffreyTomich,E&ENews, Illinois, July 5, 20182Energy Choice Initiative Final Report by Public Utilities Commission of Nevada, April 20183Clean Energy Advocates Oppose Nevada Ballot Question 3, Sierra Club Press Release, July 26, 20184Restructuring the Electricity Market in Nevada?: Possibilities, Prospects and Pitfalls by the Guinn Center, 20185“AZQuotes.com”, Accessed 7/27/20186Who Owns the Sun? by Noah Buhayar,Bloomberg Businessweek, January 28, 20167Electricity Customer Choice Outperforms Traditional Monopoly by Wayne Kuipers and Laura Chappelle,UtilityDive.com, August 23, 20168Conflicting Reports Underline Tough Path for Preparing for Energy Choice Ballot Question by Riley Snyder, Nevada Independent, May 10, 20189Coalition Fights for Energy Choice in Florida by Alex Crees, Choose Energy, January 12, 201810Electricity Choice in Ohio: How Competition has Outperformed Traditional Monopoly Regulation,Cleveland State University, November 201611A Case Study of Electric Competition Results in Pennsylvania, University of Pennsylvania, October 28, 201612A Case Study of Electric Competition Results in Pennsylvania, University of Pennsylvania, October 28, 201613Job Analysis & Forecast: Yes on Question 3 by RCG Economics, October 2016

69SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

CrossFireBoth the PUCN and the Guinn Center4 found there are no guarantees that rooftop solar customers would continue to receive favorable net-metering rates for electricity returned to the grid under Question 3. Question 3 would also cancel an unprec-edented plan to double renewable energy production in Nevada by 2023. Question 3 would shut down six new solar projects that would create more than 1,700 construction jobs and generate 1001 megawatts of renew-able energy. That’s enough new clean energy to power 600,000 Nevada homes. There are many reasons why it’s been nearly 20 years since any state has taken the risk of implementing a system like the one Question 3 proposes. We are urging all Ne-vadans to look carefully into the facts and vote No on Question 3.

Warren Buffett, the owner of NV Energy, once said that, “Energy deregulation will be the largest transfer of wealth in history.”5 That was before he said owning utilities isn’t “a way to get rich, it’s a way to stay rich.”6 And while en-ergy choice is most accurately referred to as re-structuring (deregulation implies the absence of regulation), is it any wonder why NV Energy is spending $30 million to protect their monopoly? Lower power bills, more renewable en-ergy and more jobs. All will come to Nevada upon passage of the Energy Choice Initiative in November, otherwise known as Question 3. Question 3 is a constitutional measure that very simply does two things. First, it bans the electric generation monopoly in Ne-vada and second, it requires the legislature to

provide for an open, competitive electricity market by July 1, 2023. Competition simply lowers prices, even in energy markets. According to data from the Energy Information Administration, the 14 energy choice jurisdictions in which al-most one-third of Americans live saw prices fall 14 percent between 2008 and 2015 while monopoly states’ prices rose 5 percent in that same time frame.7 A study presented before the Governor’s Committee on Energy Choice found Nevada ratepayers would see a net benefit of more than $1.1 billion by 2023.8 That equates to savings of $11.16 a month on bills before competitive pricing is even included. The chairman of the Illinois Commerce Commission estimates that consumers in energy choice states have saved $324 billion dollars on their power bills from 2008 to 2017 as a result of competition.9 According to a 2016 study from Cleveland State Univer-sity, energy choice saved consumers in Ohio an average of $3 billion per year, for a total of $15 billion over five years.10 In Pennsylva-nia, according to a study from the University of Pennsylvania, energy competition saved residential customers $818 million in 2016 alone.11 Warren Buffett was right: energy competition is a huge transfer of wealth from the monopoly to us. Having the option to choose your en-ergy provider means choosing the type of plan that works best for you. Want 100 per-cent renewable energy? There will be plans available for that, just as there are in other jurisdictions around the country. According to a study from the University of Pennsylva-nia, renewable energy plans were ‘the most widely offered innovative product’ available to residential customers following energy re-structuring ‘by far’.12

At its core, the Energy Choice Initia-tive is about unleashing Nevada’s renewable energy potential. Consumers will drive the new market and because consumers are de-manding renewable energy, that will spur the demand for building those projects right here

in Nevada. Consider the data center provider Switch, one of the primary backers of Ques-tion 3 and a company who has already exited NV Energy. They have announced they are building 1,000 megawatts of solar energy at a 50 percent discount than what you would have to pay NV Energy to get 100 percent renewable energy today. Other major com-panies like MGM, Wynn and Caesars have also left NV Energy and have announced solar projects of their own to power their businesses at major savings over the current monopoly utility. Bill Ellard, the chair of economics for the American Solar Energy Society, said, “The utilities are not negative on solar, they are negative on you controlling your own electricity.” A study done by Nevada-based econo-mist John Restrepo found that because of the demand for building more renewables, Nevada could see an increase of up to 34,080 new clean energy jobs by 2033 as a result of passing Question 3, more than doubling Ne-vada’s current job total in that sector.13 In November, vote Yes on Question 3 for lower bills, more renewable energy and more jobs.

by Yes on Question 3(yesquestion3.com)

Why do youSUPPORT

Question 3?

70 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

HOW WE STACK UP Cover Story

ALTHOUGHNevadastillranksinthetopfivestatesinthenationfor violent crimes, it did drop from third to fourth this year. For property crimes, Nevada hit the middle of the list at number 25. With over 56 million tourists visiting Nevada each year, the “per 100,000residents”figuresmaynotreflectthenumberofpeopleactually in Nevada at any given time. However, underlying issues such as poverty, drug abuse and a transient population certainly factor in to Nevada’s crime rate.

CRIME RATENevada’s Crime Rate

Ranking48727

259

363

Carson CityElkoFernleyGardnervilleLas Vegas metro areaReno metro areaU.S.Source: Zillow.com, June 2018* Year over year

Median Home Value Index

% Change*10.3%

1.7%16.5%11.4%15.0%11.3%8.3%

Home Value $297,500 $241,600 $243,800 $348,500 $264,300 $352,400 $217,300

Rank1234567891025

Source: ATTOM Data Solutions’ Q1 2018 U.S. Home Equity & Underwater Report. “Seriously Underwater”: the combined loan amount secured by the property is atleast 25 percent higher than the property’s estimated market value. * Year over year

StateLouisiana

MississippiIowa

West VirginiaIllinois

AlabamaKansas

ArkansasOhio

GeorgiaNevada

U.S. Average

Percentage of Home Mortgages“Seriously Underwater”

% Change*3.6%

13.5%8.5%7.5%

-0.6%5.9%9.9%3.5%-2.8%2.5%

-8.9%-0.2%

% Seriously Underwater

20.1%18.0%17.2%15.9%15.9%15.8%14.9%14.8%14.4%14.1%10.0%9.5%

Nevada Housing Market

Residential Housing Units Permitted - last 12 months Housing Price Index (Q1 1991 = 100)Housing Price Index - average last 12 months Source: Applied Analysis Economic Briefing, July 2018

% Change16.7%13.7%11.0%

Number19,399

248.0234.3

Time PeriodJune 2017-May 2018

Q 1 2018Q 2 2017-Q 1 2018

Time PeriodJune 2016-May 2017

Q 1 2017Q 2 2016-Q 1 2017

Number16,625

218.1211.1

Rank12345678910

Source: RealtyTrac, June 2018* As a % of all mortgaged homes

Foreclosure Inventory*

StateNew Jersey

MarylandIllinois

DelawareFlorida

ConnecticutNevada

South CarolinaOhio

New MexicoU.S. Average

Rate1 in 6191 in 930

1 in 1,0681 in 1,1051 in 1,1151 in 1,175

1 in 1,2131 in 1,3011 in 1,4101 in 1,4721 in 1,758

HOUSINGHOME prices are up dramatically in all areas of the Silver State. This sellers’ market is good news for owners of existing homes, and the better news is that mortgaged homes have seen a dra-matic increase in equity since Nevada led the nation in foreclo-

sures. While Nevada still ranks seventh in foreclosures, the num-ber of homes considered “seriously underwater” has declined from18.9percentinQ12017(whenNevadawasfirstintheU.S.)to 10 percent in Q1 2018, ranking it 25th.

CONTINUED FROM PAGE 11

Total Violent Crimes Murder/Manslaughter Forcible Rape Robbery Aggravated AssaultTotal Property Crimes Burglary Larceny/Theft Motor Vehicle TheftSource: Crime in the United States, U.S. Dept. of Justice, Federal Bureau of InvestigationRankings include 50 states and D.C.*Reported crimes per 100,000 population, 2016

U.S. 386.3

5.3 40.4

102.8 248.5

2,450.7 468.9

1,745.0 236.9

Current*678.1

7.6 58.9

215.6 395.9

2,586.6 641.1

1,497.1 448.3

Previous Year695.9

6.2 58.4

217.5 413.9

2,668.3 773.5

1,502.2 392.7

71SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Cover Story

Rank

12345

4647484950

Source: Tax Foundation, 2018 State Business Tax Climate Index, as of July 1, 2017. Rank of 1 is best, 50 is worst.

Property Tax*

New MexicoNorth Dakota

IdahoIndiana

Utah

MassachusettsNew York Vermont

ConnecticutNew Jersey

*Nevada = 8

State

WyomingSouth Dakota

AlaskaFlorida

Nevada

MinnesotaVermont

CaliforniaNew York

New Jersey

Sales Tax*

DelawareNew Hampshire

MontanaOregonAlaska

New JerseyArizona

WashingtonAlabama

Louisiana*Nevada = 42

UnemploymentInsurance*

OklahomaFlorida

DelawareLouisiana

Mississippi

IdahoKentuckyMichigan

MassachusettsPennsylvania

*Nevada = 45

Best and Worst Business Tax Climates

Best

Worst

Corporate Tax

WyomingSouth Dakota

North CarolinaUtah

Missouri

WashingtonOhioIowa

TexasDelaware

*Nevada = 33

TAX BURDENMANY businesses and individuals choose to relocate to Nevada be-cause of its tax climate. The state’s unique system doesn’t tax indi-vidual income. Instead, Nevada’s general fund depends on sales taxes (29 percent) and taxes on gaming (18 percent) for nearly half of its in-

come. Nevada, with the sixth-lowest tax burden in the U.S., is espe-cially attractive to Californians living in a state ranked 36th. Businesses inhigh-taxareasfindNevadaappealingbecauseithasnocorporateincome tax, no inventory tax, no franchise tax and no unitary tax.

Rank

123456

4748495051Source: WalletHub.com, 2018* Ranking based on total state and local taxes for amedian state household, adjusted for cost-of-living index

State Tax Rates

State

DelawareWyoming

TennesseeMontana

AlaskaNevada

New JerseyRhode IslandConnecticut

New YorkHawaii

Lowest

Highest

72 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

HOW WE STACK UP Cover Story

COST OF LIVINGRISING housing costs in Nevada’s two large metro areas have pushed their cost of living up slightly from last year, when costs were 100.4 percent of the U.S. average in Southern Nevada and 102.8 percent in Reno. However, a dollar still goes further in Ne-

vada than it does in the average state, according to federal sta-tistics. This could be due to the Silver State’s relatively low tax burden, but it could also take into account the lower cost of living in Nevada’s rural areas.

(Ranked from least expensive)12345314647474950

Source: Tax Foundation, Regional Price Parities by State, 2015, based on figures from U.S. Bureau of Economic Analysis

The Relative Value of $100

StateMississippi

AlabamaArkansas

South DakotaKentucky

NevadaMaryland

New JerseyCaliforniaNew York

HawaiiU.S. Average

$100 Equals$116.01 $115.21 $114.42 $113.38 $112.87 $102.04

$91.24 $88.18 $88.18 $86.73 $84.18

$100.00

Cost of Living Index (COLI)*

Las Vegas MSA101.5%110.0%87.9%

107.5%103.4%

99.7%102.5%

Reno-Sparks MSA104.8%108.4%81.8%

112.8%110.7%113.8%107.7%

U.S. Average100.0%100.0%100.0%100.0%100.0%100.0%100.0%

Selected Prices from COLI

Las Vegas MSA$1,048

$378,921$158.82

$2.56$108.25$424.88

Reno-Sparks MSA$1,179

$355,915$112.59

$2.78$136.69$395.22

U.S. Average$1,050

$337,323$166.56

$2.30$107.99$428.94

Apartment Rent (per month)Home PriceEnergy Costs (per month)Gasoline (per gallon)Doctor VisitPrescription Drugs (Annual)Source: Council for Community and Economic Research (see above), Q1 2018

Grocery ItemsHousingUtilitiesTransportationHealthcareMisc. Goods & Svcs.Composite IndexSource: Council for Community and Economic Research. This index measures relative price levels for consumer goods and services in 400 Metropolitan Statistical Areas (MSAs). It does not measure tax burden. The average of costs in each MSA is read as a percentage of the average of all participating places. For example, a score of 103.6% indicates that costs in that MSA are 3.6% higher than the national average. * Q1 2018

CategoryLeisure and HospitalityTrade, Transportation, UtilitiesProfessional & Business ServicesGovernmentEducation & Health ServicesConstructionFinancial ActivitiesManufacturingOther ServicesMining & LoggingInformationTotal Non-Farm PayrollSource: U.S. Bureau of Labor Statistics, June 2018* Year Over Year

Nevada Employment by Industry

% Change*0.4%1.7%2.3%4.2%3.6%6.4%2.8%

14.2%6.1%2.8%

-3.3%2.8%

% of TotalEmployment

25.5%18.3%13.5%12.1%10.0%6.5%4.8%3.9%3.2%1.1%1.1%

100.0%

Jobs in Thousands351.0 252.8 186.1 166.7 138.1

89.7 66.8 53.9 43.5 14.5 14.7

1,377.8

EMPLOYMENTTHE unemployment rate across the nation declined 0.4 percent from June 2017 to June 2018, and Nevada’s rate fell at the same pace -- from 5.1 percent to 4.7 percent. According to Applied Analysis’ July 2018 Economic Briefing, personal income in Q1

Rank12345 (tie)5 (tie)5 (tie)5 (tie)5 (tie)10 (tie)10 (tie)10 (tie)

Source: U.S. Bureau of Labor Statistics, June 2018* Year over year

Unemployment Rates by State

Rate7.1%5.6%5.3%4.9%4.7%4.7%4.7%4.7%4.7%4.5%4.5%4.5%4.0%

StateAlaska

DCWest VirginiaNew Mexico

ArizonaLouisiana

MississippiNevada

WashingtonMichiganNew York

OhioU.S. Average

% Change*-0.1-0.60.3-1.2-0.1-0.5-0.5-0.4-0.10.1

-0.2-0.6-0.4

2018 was up 4.1 percent over Q1 2017, and average weekly hours worked in May 2018 stood at 34.1. Last year, Nevada once again led the nation in job creation, with a 3.3 percent increase in jobs from December 2016 to December 2017.

Cover Story

(Ranked from least expensive)12345678Source: The Boyd Co., Inc., Princeton, NJ. Costs based on a 325-worker advanced manufacturing plant occupying 225,000 sq. ft.

Total Annual Operating Costs: Advanced Manufacturing

Annual Costs$23,692,392 $24,343,692 $25,347,420 $25,454,834 $26,530,112 $28,388,965 $28,658,992 $31,889,124

LocationGreenville, SC

Gardnerville, NVHillsboro, OR

Columbus, OHAurora, CODavis, CA

Boston, MASan Jose, CA

(Ranked from least expensive)12345678Source: The Boyd Co., Inc., Princeton, NJ. Costs based on a 500-worker corporate administrative office occupying 300,000 sq. ft.

Total Annual Operating Costs: Corporate Office

Annual Costs$34,240,262 $35,045,780 $35,415,261 $36,105,000 $36,240,038 $37,148,329 $43,180,525 $43,381,723

LocationEstero, FL

Minden, NVChesterfield, MO

Overland Park, KSPlano, TX

Owings Mills, MDIrvine, CA

San Rafael, CA

(Ranked from least expensive)12345678Source: The Boyd Co., Inc., Princeton, NJ. Costs based on a 125-worker financial technology office occupying 30,000 sq. ft.

Total Annual Operating Costs: Global Financial Technology Office

LocationDublin, IE

Las Vegas, NVGeneva, CH

Los Angeles, CABoston, MALondon, UK

New York, NYSan Francisco, CA

Annual Costs$9,712,412

$11,575,982 $12,546,479 $12,841,036 $13,197,200 $13,760,603 $14,237,476 $14,603,360

Commercial Real Estate Lease Rates

RenoSacramentoInland EmpireSalt Lake CityLas VegasPhoenixOrange CountyGreater Los Angeles

RenoSacramentoInland EmpireSalt Lake CityLas VegasPhoenixOrange CountyGreater Los Angeles

RenoSacramentoInland EmpireSalt Lake CityLas VegasPhoenixOrange CountyGreater Los AngelesSource: CBRE. Q2-2018*Full Service Gross**Triple Net, Per Square Foot

$1.53 $1.88 $1.93 $2.00 $2.09 $2.13 $2.90 $3.38

$1.44 $1.59 $2.03 $1.52 $1.52 $1.50 $2.42 $2.49

$0.45 $0.54 $0.53 $0.44 $0.64 $0.64 $0.91 $0.81

Office*

Retail**

Industrial**

(Ranked from least expensive)12345678Source: The Boyd Co., Inc., Princeton, NJ. Costs based on a 150-worker distribution center occupying 500,000 sq. ft.

Total Annual Operating Costs: Distribution Warehouse

Annual Costs$11,773,437 $12,169,021 $12,723,788 $13,100,707 $13,383,952 $13,913,119 $15,091,366 $15,664,113

LocationCordele, GAFernley, NV

Mesquite, NVBethlehem, PA

Hesperia, CATracy, CA

Meadowlands, NJStoughton, MA

COST OF DOING BUSINESSIT costs less to operate a business in Nevada than in many com-peting markets, according to The Boyd Company, which compares payroll costs, lease rates, business taxes and workers compensation costs.Anewchart thisyearcomparescosts foraglobalfinancial

technologyofficeinLasVegastocitiesintheU.S.andaroundtheglobe. Lease rates for commercial real estate in Las Vegas and Reno compare favorably to nearby locations, and Reno is especially well positioned to compete with cities in high-tax California.

74 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

HOW WE STACK UP Cover Story

Rank

123 (tie)3 (tie)512

4647484950Source: Chief Executive Magazine (May 2018 issue) surveyed CEOs in January 2018, asking them to rank states in which they do business.

Best and Worst States for Business

Best

Worst

State

TexasFlorida

North CarolinaSouth Carolina

IndianaNevada

ConnecticutNew Jersey

IllinoisNew YorkCalifornia

Rank

12345

4647484950Source: Small Business & Entrepreneurship Council. Factors in rankings included taxes and regulatory costs,government spending, property rights, healthcare and energy costs, among others, 2018

Small Business Policy Index

Ranked from friendliest to least friendly policy environments for entrepreneurship

Best

Worst

State

NevadaTexas

South DakotaWyoming

Florida

MinnesotaNew York

HawaiiNew Jersey

California

Rank

12345

3345 (tie)45 (tie)47484950Source: CNBC.com, America’s Top States for Business, June 2018

Top States for Businesss

Best

Worst

State

TexasWashington

UtahVirginia

Colorado

NevadaMaine

Rhode IslandHawaii

West VirginiaMississippi

Alaska

Evaluates states for competitiveness based on factors such as infrastructure,education, quality of life, economy, and cost of doing business.

BUSINESS RANKINGSNEVADAmaintaineditsrankingoffirstintheSmallBusinessPolicyIndex this year, which takes into account business taxes and regula-tory costs, among other factors. CEOs ranked Nevada 12th for doing business, dropping from its number six position last year. However, CNBC rates Nevada considerably lower because it measures, not only factorsthataffectacompany’sbottomline,butalsonumbersthatim-pact the lives of its employees – measurements such as the crime rate, the quality of education and the availability of healthcare.

When all is said and done, the choice to move a company to Nevada is made by people with families to consider, and those decision makers take a hard look at some of the challenges re-flectedintheaccompanyingcharts.AlthoughNevadaismakinggreat strides in areas such as employment and economic growth, itmustfindsolutionstosomeoftheselongstandingproblemsifitis to enjoy a successful future.

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76 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

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AMERICA’S ‘SOCIALIST’ GENERATION IS MORE CAPITALIST THAN IT THINKS

Free Market Watch

ids today ruin everything. So-cialism, for example, just isn’t what it used to be. Of course, that’s not necessar-

ily a bad thing. In fact, for advocates of the free market system, the evolving understanding of what it means to be a “socialist” in modern America isn’t nearly as dire as it sounds. The newly empowered generation of young Americans — millennials certainly fall into this group — increasingly describe them-selves as so-called “Democratic Socialists.” In fact, according to a national Reason-Rupe survey, more than half of 18- to 29-year-olds (53 percent) view socialism “favorably.” To generations that are old enough to re-member when a socialist uprising in Cuba resulted in a handful of nuclear missiles be-

ing parked 90 miles off the coast of Florida, this modern embrace of socialism can be alarming. Thankfully, what’s considered “social-ism” in today’s pop-econ terms bears little resemblance to the textbook definition. In fact, judging newly-empowered young Americans by the way they act, one could eas-ily mistake them as more pro-capitalist than many of the generations before them — their fondness for a growing welfare state aside. This is a generation, after all, that has not only utilized but also advanced the free mar-ket unlike any other. Discontented with the monopoly-like power of cable companies, young Ameri-cans happily embraced online-streaming alternatives such as Netflix and Amazon —

allowing them the freedom to pick not only what they watch, but when they watch it. Feeling underserved by expensive taxi-cab companies, America’s youth turned to market-disrupting ridesharing competitors such as Uber or Lyft. By embracing sites like Etsy, Amazon and countless others, these young consum-ers not only transformed the way we shop, but they have unleashed an untold number of young entrepreneurs into new markets. In every corner of the economy, it is clear that America’s youngest generations demand a constant flow of innovation, cus-tomization and (above all else) choice when it comes to how they interact with the world. In other words, we’re talking about a demographic that has imbedded in its con-

KMichael Schaus is communications director for the Nevada Policy Research Institute.

COMMENTARY

Free Market Watchsciousness a sound rejection of anything billed as a one-size-fits-all solution. Instead, they demand a seemingly endless supply of options, progress and market competition. And this isn’t just some academic ob-servation based off the consumer habits of young Americans. We’re seeing this pro-choice mentality shine through in public policy as well. School choice, for example, is one of the most libertarian policy changes to sweep the nation in recent decades — and millen-nials are overwhelmingly supportive, with roughly 75 percent supporting the concept, according to a recent survey conducted by Beck Research . That’s a lot of supposed socialists em-bracing the idea of a market-driven edu-cation system. Such support, however, shouldn’t be too surprising. Instinctively, this generation expects cor-porations, governments and pretty much the whole of society to cater to their unique needs,

compete for their attention and respond to the market forces of their generation. And why shouldn’t they? More than their parents or their grandparents, millen-nials have experienced a level of customiza-tion and innovation that couldn’t have been imagined just a few decades ago. The result is a generation that might not respect the economic nuances that have cre-ated such vast consumer choice, but have grown to expect and demand it nonetheless. This demand for choice tells us some-thing important about the so-called social-ist groundswell among young Americans: “Socialism” doesn’t mean the same thing in modern political discourse that it meant in the 20th century. The American generation now calling for “democratic socialism” — the droves of young activists showing up for Bernie Sand-ers or Alexandria Ocasio-Cortez — aren’t really pro-socialism, as much as they are pro-welfare.

77SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

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Driving the movement is a growing belief that taxpayers should foot the bill for an ever-increasing list of government programs. It’s a call for more government spending — not necessarily a dismantling of the market economy. And that’s a sharp departure from the traditional understanding of socialism — where government technocrats and com-missars replace organic market forces in a top-down bureaucratic system. Indeed, the brand of socialism that Marx wrote about, isn’t the kind of socialism young elite pro-gressives would be willing to tolerate. Socialism in modern America just isn’t what it used to be — and that means there is a Grand Canyon-sized opportunity for the liberty movement to be heard by young Americans. After all, we’re talking about a genera-tion that, more than any other, has already embraced the core tenant of free-market capitalism: The freedom of choice.

Photo By Chris Tucker

DavidJewkes

Avision Young

79SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

COMMERCIAL PROPERTY

MANAGEMENTBy Jennifer Rachel Baumer

CHANGING AND ADAPTINGWITH NEVADA’S ECONOMY

A Little HealthyCompetition Commercial property management in Southern Nevada is dominated by four or five big national companies and a couplevery strong independent real estate service companies capable of competing with the national companies, according to David Jewkes, managing director, Avison Young. “It’s highly competitive on the property management side,” said Jewkes. “It’s a service industry and a low margin business and it supports the higher margin trans-actions part of the commercial real estate business. But you must do it very, very well because you’re managing other people’s money, and it’s very competitive. If you don’tdoagood job, therearefiveothersthat will step right up and make a pitch.”

Building Nevada

ALL three commercial real estate sectors –industrial,retailandoffice–aregrowingin Nevada, though at different speeds bysector and geography. Industrial is driving thegrowth,officeisstilllaggingbutbegin-ning to grow and retail is returning as the economy continues to recover. Commercial real estate sectors might be experiencing growth, but investors, businesses and lenders are moving more cautiously than they did before the eco-nomic downturn. Which means companies are repurposing existing buildings, lenders require some new properties to be pre-leased before coming onboard and, while property managers are busy and there’s a limited number working on the commercial property management side, there’s still competition for business.

“Good commercial management com-panies are consistently busy because the industry is quite small if you look at the number of property managers who do resi-dential, apartments and multifamily prop-erties,” said Lauren Vaniski, director, Logic Property Management. There might be competition, but every commercial property needs a manger, said Vaniski; there’s plenty of work to go around and friendly competition with other prop-erty management companies. One reason competition can remain friendly is that the percentage of the indus-try doing commercial property manage-ment is small. “Most managers who have a management permit in Nevada do residen-tialmanagementandthat’sreflectedwithinthe number of commercial management

80 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

companies here in Las Vegas,” said Vaniski. Commercial remains competitive because the fee charged for transactions is higher than in residential due to the nature of the product being managed. Another indicator of the size of the indus-try: Roughly 15 percent of commercial prop-erty managers do 90 percent of the work, according to Marcus Clark, senior vice president, property management, NAI Alli-ance. “That doesn’t mean there’s not a lot of property managers out there, but they can do the condominiums and HOA’s and apart-ments and single family dwellings. There’s a niche for everybody.” Nevada’s commercial real estate (CRE) industry is still recovering from the econom-ic downturn, aided by growth from busi-nesses relocating from neighboring states and homegrown entrepreneurial startups. The demand for industrial space is driving the CRE market.

Beyond the Recession The last recession affected every CREsector, especially retail in Nevada, which has recently seen an uptick in business. Na-tional brands are returning to Nevada and mom-and-pop stores opening. Lots that havebeenstandingvacantarefillingin. As retail centers lease up again, previ-ously self-managed centers seek property managers as owners realize it’s too much to handle for the time they have to invest, said Vaniski. “Theywanttogettheirhandsoffofitanda professional’s hands on it, so it does help us to see an uptick in the business sector.” Commercial property management divisions are often the most profitable in a CRE brokerage. NAI Alliance in North-ern Nevada originally formed as Alliance Commercial and in 2006 joined up with NAI; the commercial property manage-ment division has been onboard all along. For Logic, the division is three years old, and Avison Young has had theirs for the life of the company. Every-

one has seen the market pick up in the last couple years. The recession changed the market. What’s going on in 2017 and 2018 in com-mercial real estate is nothing like what was going on in ‘05 to ‘07, said Jewkes. “The money is far more, and not nearly as lev-eraged, the fundamentals of the market are starting to be a little bit broader. We all know our major industry is still the same, and will be, but there’s a growing level of sophistication to regional and entrepre-neurial growth we’re seeing going forward. There’s still a lot of the Southern California reasoningtoopenregionalofficesormovetheir companies into the market and the – for lack of a better word – sexier areas are still up in the curve and the Summerlin area and the Henderson area as well.”

Sector by Sector “Certain [CRE] sectors are stronger than others,” said Jewkes. Of the Southern Nevada market, “The industrial side has come back about the strongest, with very low vacancy rates and new product coming online which appears to be leasing up rather quickly.” In part that’s because the market has been a little more discovered by those ten-ants most apt to occupy the types of enor-mous industrial spaces Southern Nevada can supply. The spaces major occupiers, like Amazon, are taking are enormous, some as large as 800- and 900,000-square feet, and the product is being snapped up. It’s the high-end, enormous warehouse and distribution center spaces dominating the market. “TheindustrialmarketisonfireinNorth-ern Nevada,” said Clark. “It’s doing very well.” The volume might be new, but the rea-

son isn’t – Reno is positioned perfectly for transportation of product from manufactur-ers or distribution centers. “We’re close to population centers, a.k.a. Sacramento, San Francisco, Port-land, but there’s no personal property tax-es, no inventory taxes, it’s a sweet deal to be 11 miles from the California border but still have the tax rates and incentives Ne-vada has,” said Clark. While Northern Nevada has long been a great location for warehousing and distribu-tion, lately more light manufacturers that are exiting California are fueling the Northern Nevada industrial market. Vacancy rates are falling for industrial products. Smaller prod-ucts like 20,000 square foot buildings are becoming scarce. “For the most part, the industrial market has got a very low vacancy rate,” said Clark. “Notsomuchforofficeandretail.Therearestill some good deals to be had in the of-ficemarketandalsoinretail–that’shadaharder time coming out of the recession.” In Southern Nevada retail can be any-thing from an unanchored strip center of 40,000-square-feet in Henderson to a re-gional mall on a major parkway and every-thing in between. The office market in Southern Nevadacontinues to have higher vacancy rates than other sectors, partly because it was overbuilt in the economic boom before the downturn. “Part of the reason for that is available capital. Financial markets have not yet want-ed to go much at risk like they did 10 years ago to allow developers to easily develop of-ficeproductuntilweseevacanciesgodownmarket-wide,” said Jewkes. That doesn’t mean there isn’t new prod-uct coming online. Hughes Corporation has builtsomenewClassAofficespacewhichleased up. But it’s hard for other develop-ers to access the capital for spec building without preleasing, which is holding up that part of the market. Class A can be anything from a new 80,000-square-foot skyscrap-

PROPERTY MANAGEMENT Building Nevada

LaurenVaniskiLogic Property Management

81SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

er to a 20-year-old property that’s gone through rehabilitation and renovation. Class A might be leasing, but classes B, B-minus and C properties in less desirable ar-eas aren’t. That’s a fairly normal market condi-tion, said Jewkes, one that will generate reuse, redeployment and redevelopment of some of those buildings in the future. “Something will have to be done if people aren’t looking to locate businesses in those areas and are fo-cused on higher end demographic areas.” Class B properties are generally under 80,000 square feet, and class C have less desirable locations, can be of any size, but likely haven’t been renovated. But when it comes to new versus existing, possibly less desirable buildings for rent, decisions are made business by business, Vani-ski said, and if somebody is driven by the economics of leasing an office building,they may go to an older building in a cer-tain area of town. “We have a lot of businesses coming into town and repurposing large previously va-cant spaces like a Circuit City that’s been vacant for 10 years or another very large big box property. We’ve seen companies come inandmakethatintoanopenofficeconceptor a call center and take it from retail use to anofficeuse,sopeoplearebeingcreativewhen opening businesses here and repur-posing some of the larger vacancies we’ve had,” said Vaniski. Space available in those less desirable locations contributes to vacancy rates. “We remainconfidentit’sjustamatteroftimebe-cause the interest in the market continues to generate expansion or relocation from entre-preneurialeffortsorothermarketsorbigcom-paniesneedingregionaloffices,“saidJewkes.

Geographic Markets Do businesses follow geographic boundaries or is it more that industries built one after another in those particular areas? “It’s a bit of both,” said Jewkes. “We have sectors in our market that decision makers coming into the market or relocating

from other parts of the Valley see as more desirable.” Those areas are performing well. At the curve, for example, the draw is visibility – thousands of commuters pass the location on their way to work along the 215 Beltway. That’s important for findingcustomers. For recruiting and retaining em-ployees, workday amenities become im-portant. When commercial buildings have been vacant for a while, those amenities move out too, which is why areas that were fineforacommercialbuilding20yearsagomight be struggling today. Businesses also like to locate near roof-tops, close to where their workforce lives. “We’re a very mobile society and a lot of people like to drive themselves to work and back,” said Clark. That’s one of the reasons Tahoe-Reno Industrial Center lo-cated between Sparks and Fernley on I-80 mightnotbethefirstchoiceforemployersmoving to or expanding within the North-ern Nevada market. Commuter buses are now running that route, which will help, but for new industrial buildings, Sparks is be-comingdesirablebecause there’safford-able land available and new residential building nearby.

The Industry Commercial property management spans the gamut from soup to nuts full-ser-vice packages to the day-to-day boots on the ground oversight of the physical build-ing through facilities management. “In full-service property management, we basically stand in for the owners,” said Clark. “Most of the time the owners are out of state, and they may not visit their prop-erties more than once or twice a year. So we are the total interface for tenants, all the contractors, the vendors, that work the property.” The full service package may include monthly financial reports, collection ofrents from existing tenants, physical main-tenance of the buildings and hiring of con-tractors and landscapers. It can include

offeringclientsmanagement,leasing,lend-ing and receivership services, said Vaniski. Facilities management is focused only on taking care of the physical property, without the additional collection of rents or thecreationoffinancialstatements. Property management clients can be individual or group investors, banks, prop-erty owners or people looking for proper-ties to own. “Everyone has certain priorities when coming in to look for management for their properties,” said Vaniski. Logic’s clients aren’t only property owners; they’re also tenantswhoneed tobesatisfiedwith theproperty they’re renting. “We essentially talk to everybody and make sure we un-derstand where they’re going with [our ser-vices] before we move forward with a man-agement plan.” Becauseonesizedoesn’tfitall,andthecompetitionisfierce.

Building Nevada

82 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

[BC] BOULDER CITY [E] EAST [H] HENDERSON [N] NORTH [NW] NORTHWEST [O] OTHER [S] SOUTH [SW] SOUTHWEST [WC] WASHOE COUNTY

E

Sale, Retail ADDRESS 1935 N. Hollywood Blvd., 89156BUYER TNG Investors SELLER Palmer Company-Vacaville DETAILS 7,360 SF; $2.3 millionAPN 140-22-715-006 BUYER REP Phillip Dunning, CCIM of Colliers InternationalSELLER REP Brian Fike of Colliers International

Sale, Industrial ADDRESS 4460 E. Cheyenne Ave., 89115BUYER Top Street Estate, Ben HajdunSELLER William J. MarkowitzDETAILS 13,500 SF; $1.4 millionAPN 140-08-401-013SELLER REP Dean Willmore, SIOR and Alex Stanisic of Colliers International

Sale, Multi-FamilyADDRESS 225 Flower Ave., 89101BUYER Flower Terrace Apartments SELLER Propriety ReduxDETAILS 40 Units; $62,500 per unitAPN 139-35-714-008TENANT REP Devin Lee, CCIM and Robin Willett of Northcap Multi-Family

Sale, Multi-FamilyADDRESS 2540 Fremont St., 89104BUYER SDS Realty Corp SELLER TOD Las Vegas 1DETAILS 53 Units; $60,377 per unitAPN 162-01-111-046SELLER REP Jerad Roberts and Jason Dittenber of Northcap Multi-Family

Sale, Multi-FamilyADDRESS 3985 E Cheyenne Ave. 89115BUYER 3D InvestmentsSELLER LBA Holdco and MKL Capital GroupDETAILS 176 Units; $70,597 per unitAPN 140-18-501-004BUYERS REP Pat Sauter and Art Carll-Tangora of NAI Vegas

OFFICESUMMARYSECOND QUARTER 2018

NORTHERN NEVADA TheNorthernNevadaofficemarketpulledaheadthisquarterand2018isset-ting up to be a productive year. The market posted an increase in positive absorp-tion to 63,786 square feet and the vacancy rate decreased to 11.7 percent from the 12.3percentrecordedinthefirstquarterof2018.Officeactivityhasbeenstrongin the Reno market with sales dominating the quarter, including many large sales to owner-users and investors. Leasing has remained stable, yet demand for big blocks of Class A space, with fewviablespaceoptions,hasmadeexpansionsforexistingtenantsdifficultandeven more so for tenants looking to enter the Reno market. Due to this phenom-enon, rents are unquestionably on the rise as the average asking rental rate at the close of 2017 was $1.67 per square foot, per month, full service and this quarter posted $1.70 per square foot. Duetolackofinventoryintheofficemarket,therearerumorsoffutureofficeconstruction to provide large blocks of space. Tenants looking for 20,000 square feetanduphaveaverydifficulttimefindingoptions,especiallyinClassAbuild-ings. Buildings that can accommodate 20,000 to 40,000 square foot users are expected to be successful as there are currently no options in the market.

By Colliers Reno

SOUTHERN NEVADA

DemandforofficespaceinSouthernNevada’sofficemarketincreasedto237,968squarefeetofnetabsorption.Newcompletionsofofficespacetotaled270,646squarefeet in the second quarter, outpacing net absorption. Fortunately, it was close enough to keepofficevacancyat15.1percent.Theweightedaverageaskingrateforofficespaceincreased in the second quarter to $2.11 per square foot on a full service gross basis. ThreeofficebuildingswerecompletedinSouthernNevadainthesecondquarterof 2018 totaling 270,646 square feet. The market will likely see 192,800 square feet of professionalofficespacecompletedthroughtheremainderof2018.Another374,389squarefeetofofficespaceisplannedforcompletionin2019. SouthernNevada’sofficemarkethad420,038squarefeetofnetabsorptioninthefirsthalfof2018.Sincethecurrentrecoverystartedinearnestin2014,netabsorptionwas highest in Class B buildings (1.3 million square feet), followed by Class C buildings (1.0millionsquarefeet)andfinallyClassAbuildings(809,575squarefeet). Atmidyear2018theofficeinvestmentsalesvolumewas$300.6millionin33salestotaling 1.6 million square feet with an average sales price of $186.77 per square foot. The average cap rate was 8.8 percent at midyear 2018.

By Colliers Las Vegas

89166

89149

89129

89134

8914489138 89128 89108

89131

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89085 8908789165

89115

89156

8911089101

89104 89142

89122

8901189014

89074 89015

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89044

89084

89031

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2

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389

109

89147 89103

89118 8911989120

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8912389139

89141

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8916189

135

8914

8

8911

3

89107 8910

6

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89169

83SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

Red ReportSale, Multi-FamilyADDRESS 5820 Meikle Lane, 89156BUYER Mountain Paradise Village TNCSELLER Walker Property InvestmentsDETAILS 72 Unit; $83,334 per unitAPN 140-21-717-063BUYER AND SELLER REP Michael LaBar andMichaelShaffnerofMarcusandMillichap

Sale, LandADDRESS Speedway Blvd. & I-15, 89165BUYER LIT Industrial Limited PartnershipSELLER Cohen 2006 TrustDETAILS 28.32 acres; $7.11 millionAPN 123-22-701-001BUYER REP Garrett Toft, SIOR of CBRE

Lease, IndustrialADDRESS 3030 N. Lamb Blvd, 89115TENANT Advanced Wheel SalesLANDLORD Natomas Creek NevadaDETAIL 39,375 SF; $1,143,230 for 5 yearsTENANT REP Zac Zaher of CBRE

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Sale, Office ADDRESS 2893 N Green Valley Pkwy, 89014BUYER 24 Hr VegasSELLER Mani Anand Vjay-SawhDETAILS 26,376 SF; $4,515,000APN 161-31-802-026SELLER REP Dustin Alvino and Darren Alvino of Marcus & Millichap

Sale, OfficeADDRESS 2500 & 2550 Paseo Verde Pkwy and 2275, 2285 & 2370 Corporate Circle, 89074BUYER JMA VenturesSELLER American Nevada CorporationDETAILS 271,114 SF; $51.75 millionAPN 178-19-511-044 et alSELLER REP Rick Reeder and Brad Tecca ofCushman&Wakefield

Sale, IndustrialADDRESS 2300, 2310, 2340, 2350 Corporate CIRCLE Dr., 89074BUYER Buchanan Street PartnersSELLER American Nevada CompanyDETAILS 158,341 SF; $27,765,000APN 178-19-511-030SELLERS REPCushman&Wakefield

Lease, IndustrialADDRESS 8390 Eastgate Rd. 89015TENANT Xtreme ManufacturingLANDLORDColfin2018-5IndustrialOwnerDETAILS 163,000 SF; $12,490,690 for 10 yearsLANDLORD REP Kevin Higgins, SIOR of CBRE

N

Sale, OfficeADDRESS 400 Shadow Lane, 89106BUYER Fullerton Properties Inc.SELLER MSC I 2007-IQ 13 Shadow LaneDETAILS 41,849 SF; $5,092,500APN 139-33-211-001SELLERS REP Stacy Scheer, CCIM and Taber Thill, SIOR of Colliers International

Sale, Industrial ADDRESS 2545 W. Cheyenne Ave., 89032 BUYER Sage Baron SELLER Robin International 2013DETAILS 8,000 SF; $825,000APN 139-17-510-012SELLER REP Al Twainy, CCIM and Amelia Henry of Colliers International

Sale, LandADDRESS 2730 Brooks Ave., 89032BUYER RocklinSELLER Odyssey Acquisitions IIIDETAILS 0.80 acres; $315,0000APN 139-17-510-032SELLER REP Jake Higgins of CBRE

Sale, LandADDRESS 5th and Brooks, 89030BUYER Mc4 ConstructionSELLER Arnold Clark

DETAILS 3.91 acres; $960,000APN 139-15-603-007BUYER REP Nolan Julseth-White of The Equity Group

Loan, OfficeADDRESS 4584 N Rancho Dr., 89130LOAN OFFICER Nevada State Development CorporationDETAILS Nevada State Development Corporation,alongwithPacificPremierBank,contributedfinancingtoBranchBenefitsConsultants,Inc.forthepurchaseand tenant improvements of a building. The total costs for the project was $593,030.

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Project, Multi-Family ADDRESS 1328 Bertha Howe Ave., 89034CONTRACTOR OF RECORD MSL ConstructionDETAILS MSL construction broke ground on Mesa Valley Estates, a 61,386 SF, one-story assisted living and memory care community. The $8 million project will include 54 assisted living apartment homes and a memory care neighborhood with 24 apartment homes. The project architect is Pinnacle Architects and the community is expected to be complete next summer.

84 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE SEPTEMBER 2018

COMMERCIAL RECAP

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Sale, Multi-FamilyADDRESS 4320-4386 Escondido St, 89119BUYER Tropicanyon IISELLER IndianaDETAILS 149 Units; $50,167 per unitAPN 162-23-202-001 et alTENANT REP Devin Lee, CCIM and Robin Willett of Northcap Multi-Family

Sale, LandADDRESS 6975 Placid Street, 89119BUYER Placid Street DevelopmentSELLER Estate of Ronald Earl Fick DETAILS 1.75 acres; $1.25 millionAPN 177-04-702-004BUYERS REP US National Commercial Real Estate ServicesSELLERS REP Michael Brazill and Edward Bassford of Sun Commercial Real Estate, Inc.

Loan, IndustrialADDRESS Lamb Blvd. and Boulder Highway, 89121LOAN OFFICER Talonvest Capital, Inc.DETAILS A $3.7 million bridge loan was secured for CIP Real Estate by Talonvest Capital. The loan was secured by Rincon Industrial Park which consists of two multi-tenant buildings totaling 66,000 SF. The loanisafiveyear,fixed-rate,non-recourseloan with interest only payments during year one.

SW

Project, IndustrialADDRESS Decatur Blvd and 215 South, 89118DEVELOPER Majestic Realty Co.DETAILS Majestic Realty has broken ground on the 227,350 SF building 10 of the Las Vegas Digital Exchange Campus/Beltway Business Park. The 5.6 million SF property is fully-leased and stretches over 360-acres. The park was developed in partnership with Thomas & Mack Development Group.

Sale, RetailADDRESS 6825 W. Russell Rd. 89118BUYER Daniel & Cathy PereyraSELLER Russell LV LLCDETAILS 23,596 SF; $5.29 millionAPN 163-35-110-006BUYER REP Dan Gluhaich of Colliers International

Sale, IndustrialADDRESS 4720 W. University Ave., 89103BUYER Sound Heating and PlumbingSELLER Wang Wen FeeDETAILS 6,553 SF; $1,032,500APN 162-19-210-008SELLERS REP Mark Musser of NAI Vegas

Sale, IndustrialADDRESS 4265 Wagon Trail Ave., 89118 BUYER SBB InvestmentsSELLER WilhoiteDETAILS 10,216 SF; $1.6 millionAPN 177-06-513-002SELLER REP Zac Zaher of CBRE

Sale, IndustrialADDRESS 5151 Oquendo Rd. 89118BUYER Mcbeath Holdings LLCSELLER Arthur P. RubenDETAILS 9,845 SF; $1,453,000APN 163-36-612-004SELLER REP Sean Zaher of CBRE

Sale, IndustrialADDRESS 3900 W. Ponderosa Way, 89118BUYER Steve MenziesSELLER FJM Valley View AssociatesDETAILS 20,271 SF; $2,736,000 APN 162-31-614-008SELLER REP Dean Willmore, SIOR of Colliers International

Sale, LandADDRESS W. Sunset and Cimarron, 89113BUYER Picerne SunsetSELLERS Shotchai Srisuro & Somkietr Rojanasathit and Gragson-Conquistador & RenoDETAILS 5 acres; $3,637,500 and 5 acres, $3.75 million, respectivelyAPN 176-04-101-006 and 007SELLER REP Scott Gragson and Robert Torres of Colliers International

Lease, IndustrialADDRESS 6850 Lindell Rd., 89118TENANT Gateway Classic Cars of Las VegasLANDLORD Prologis LPDETAILS 41,808 SF; $1,873,451 for 73 monthsLANDLORD REP Garrett Toft, SIOR and Zac Zaher of CBRE

WC

Sale, OfficeADDRESS 4900 Energy Way, 89502BUYER Hamilton CompanySELLER Quigley Investment CompanyDETAILS 17,000 SF; $1,795,000APN 012-362-01

Sale, OfficeADDRESS 9080 Double Diamond Pkwy., 89521BUYER DC Growth InvestmentsSELLER North Reno Land DevelopmentDETAILS 6,497 SF; $600,000APN 163-301-03

Sale, RetailADDRESS 889 Tahoe Blvd., 89451BUYER Lake Street PartnersSELLER Kirk SymeDETAILS 5,070 SF; $1,425,000 APN 132-240-07

Sale, RetailADDRESS 555 S Virginia St;, 89501BUYER RPS Venture #1SELLER Nevada Property Investment Enterprises 2DETAILS 10,226 SF; $3.8 millionAPN 011-226-07

Sale, IndustrialADDRESS 59 Coney Island Dr., 89431BUYER MSN Enterprises NevadaSELLER LSPI Exchange CorpDETAILS 11,115 SF; $2.75 millionAPN 034-372-15

Sale, Industrial ADDRESS 4840 Mill St., 89502BUYER Turner Land CO LPSELLER Barta PropertiesDETAILS 16,676 SF; $1.86 millionAPN 012-318-12

Sale, IndustrialADDRESS 204 Edison Way, 89502BUYER IcegenSELLER Altair Nanotechnologies Inc.DETAILS 79,392 SF; $3 millionAPN 012-319-13SELLER REP Sheila Colfer, CCIM and Fred Miller, SIOR of Dickson Commercial Group

Sale, OtherADDRESS 2905 E Arrowcreek Pkwy., 89511BUYER Lucky Star GolfSELLER Friends of ArrowcreekDETAILS 11,842 SF; $4,972,759APN 152-021-03

Sale, OtherADDRESS 3001 W. 4th St.; 89523BUYER Eagle Brook PropertiesSELLER UrbanitoDETAILS 6,026 SF; $1.29 millionAPN 006-250-13

9080 Double Diamond Pkwy

2905 E Arrowcreek

4840 Mill St

85SEPTEMBER 2018 NEVADA BUSINESS MAGAZINE

he “advance” estimate for U.S. real gross domestic product (GDP) for the second quarter of 2018 expanded by a strong 4.1 percent annualized rate, the fastest pace in almost four years.

Consumer spending, which accounts for two-thirds of real GDP, also grew strongly, which prob-ably reflectedsomewhat the taxcut.U.S.non-farm employment added a lower-than-expected 157,000 jobs in July. May and June employment, however, was revised upward by a total of 59,000 jobs. The unemployment rate edged down to 3.9 percent, while July average hourly earnings rose by 2.7 percent year-over-year, slightly outpacing thecoreCPIinflationof2.2percentdespiteatightlabor market. Retail sales growth in June acceler-ated to 6.6 percent year-over-year, the strongest pace since February 2012. June housing starts decreased by 4.2 percent compared a year ago, while the seasonally adjusted U.S. housing price continued its gain. Although the Federal Reserve decided not to increase the federal funds rate in the August meeting, strong economic indicators should lead the Fed to engineer another two in-terest rate hikes in 2018. The recent uncertainty aboutapotentialtariffwar,however,mayprovideasignificantheadwind. The Nevada economy showed robust eco-nomic activity based on the most recent data. The unemployment rate ticked down to 4.7 per-cent, the lowest level since the Great Recession. Taxable sales and gasoline sales (in gallons) in May rose by 4.7 and 2.5 percent, respectively, compared to last year. Clark County experienced generally posi-tive signals in local economic activity. The un-employment rate dropped to 4.5 percent, the lowest level in nearly 13 years. June visitor vol-ume to Clark County declined by 0.9 percent year-over-year. Total McCarran Airport pas-sengers and gaming revenue in June, however, experienced year-over-year gains, up by 2.7 and 3.5 percent, respectively. Clark County tax-able sales and gasoline sales in May posted 5.6 and 2.3 percent year-over-year growth rates, respectively. Residential housing permits/units inJunedecreasedsignificantlyby39.3percentcompared to a year ago. Washoe County also posted favorable eco-nomic signals. The unemployment rate fell to 3.4 percent, the lowest level since July 2000. May taxable sales for Washoe and Storey Counties contracted by 1.7 percent year-over-year. June visitorvolumewasrelativelyflat,upslightlyby0.9percent year-over-year. Total airport passengers exceeded the level from last year by 8.7 percent. Residential housing permits in May experienced a year-over-year loss, decreasing by 23.0 percent due to reduced activity in Sparks.

The views expressed are those of the authors and do not necessarily represent those of the University of Nevada, Las Vegas or the Nevada System of Higher Education.

Sources: Nevada Department of Taxation; Nevada Department of Employment, Training, and Rehabilitation; UNR Bureau of Business and Economic Research; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/Tahoe International Airport; Las Vegas Convention and Visitors Authority; Reno-Sparks Convention and Visitors Authority; U.S. Department of Commerce; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Federal Reserve System.

*Growth data represent change in the percentage rate, **Reflects the Reno-Sparks MSA which includes Washoe and Storey Counties, ***Recent growth is an annualized rate

Stephen M. Miller, DirectorJinju Lee, Economic Analyst

UNLV Center for Businessand Economic Research

GROWTH

DATE LATESTUNITS PREVIOUS YEAR AGO RECENT YEAR AGO COMMENTS

1377.8

4.7

5.047

933.00

4.742

107.15

1001.6

4.5

3.665

790.98

818

33

4.311

73.56

3.851

239.4

3.4

0.804

77.77

423

59

0.346

15.92

0.488

149.128

3.9

250.9

257.3

132.8

108.9

506.8

17.23

1.173

18507.2

124.103

-46.348

2816.29

-0.94

0.93

1375.8

4.8

4.951

1044.08

4.548

102.89

1001.2

4.7

3.586

904.58

1546

34

4.360

71.51

3.909

238.7

3.5

0.804

73.10

478

42

0.325

14.98

0.427

148.971

4.0

250.5

256.9

132.0

108.7

504.3

17.18

1.337

18324.0

123.450

-43.186

2718.37

-1.10

1.01

1340.2

5.1

4.820

895.43

4.561

104.54

975.6

5.3

3.470

764.32

1347

41

4.198

71.94

3.886

230.8

4.2

0.818

67.10

549

47

0.318

15.45

0.484

146.728

4.3

244.0

251.7

129.0

107.5

475.4

16.80

1.225

17995.2

120.374

-44.803

2470.30

-1.53

1.25

0.1%

-0.1%

1.9%

-10.6%

4.3%

4.1%

0.04%

-0.2%

2.2%

-12.6%

-47.1%

-2.9%

-1.1%

2.9%

-1.5%

0.3%

-0.1%

-0.0%

6.4%

-11.5%

40.5%

6.2%

6.2%

14.4%

0.1%

-0.1%

0.1%

0.2%

0.6%

0.2%

0.5%

0.3%

-12.3%

4.1%

0.5%

7.3%

3.6%

0.2%

-0.1%

2.8%

-0.4%

4.7%

4.2%

4.0%

2.5%

2.7%

-0.8%

5.6%

3.5%

-39.3%

-19.5%

2.7%

2.3%

-0.9%

3.7%

-0.8%

-1.7%

15.9%

-23.0%

25.5%

8.7%

3.0%

0.9%

1.6%

-0.4%

2.8%

2.2%

2.9%

1.3%

6.6%

2.6%

-4.2%

2.8%

3.1%

3.4%

14.0%

0.6%

-0.3%

Up Over Year Ago

Reduced

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Reduced

Up Over Year Ago

Up Over Year Ago

Down From Year Ago

Low and Volatile

Up Over Year Ago

Up Over Year Ago

Down From Year Ago

Up Over Year Ago

Reduced

Down From Year Ago

Up Over Year Ago

Down From Year Ago

Low and Volatile

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Recent Decrease

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Robust Increase

Up Over Year Ago

Down From Year Ago

Strong Growth

Increased

Year-Over-YearDeficit Increase

Increased

Up Over Year Ago

Down From Year Ago

000s, SA

%, SA

$billion

$million

million persons

million gallons

000s, SA

%, Smoothed SA

$billion

$million

units permitted

permits

million persons

million gallons

million persons

000s, SA

%, Smoothed SA

$billion

$million

units permitted

permits

million persons

million gallons

million persons

million, SA

%, SA

82-84=100, SA

82-84=100, SA

05.12=100, SA

2009=100, SA

$billion, SA

million, SA

million, SA

2012$billion, SA

97.01=100

$billion, SA

monthly close

%, NSA

%, NSA

2018M06

2018M06

2018M05

2018M06

2018M05

2018M05

2018M06

2018M06

2018M05

2018M06

2018M06

2017M11

2018M06

2018M05

2018M06

2018M06

2018M06

2018M05

2018M06

2018M05

2018M05

2018M05

2018M05

2018M06

2018M07

2018M07

2018M06

2018M06

2018Q2

2018Q1

2018M06

2018M06

2018M06

2018Q2

2018M07

2018M06

2018M07

2018M07

2018M07

DATA

Employment

Unemployment Rate*

Taxable Sales

Gaming Revenue

Passengers

Gasoline Sales

Employment

Unemployment Rate*

Taxable Sales

Gaming Revenue

Residential Permits

Commercial Permits

Passengers

Gasoline Sales

Visitor Volume

Employment **

Unemployment Rate*

Taxable Sales

Gaming Revenue

Residential Permits

Commercial Permits

Passengers

Gasoline Sales

Visitor Volume

Employment

Unemployment Rate

Consumer Price Index

Core CPI

Employment Cost Index

Productivity Index

Retail Sales Growth

Auto and Truck Sales

Housing Starts

Real GDP Growth***

U.S. Dollar

Trade Balance

S and P 500

Real Short-term Rates*

Treasury Yield Spread

Note: NSA = Not Seasonally Adjusted, SA = Seasonally Adjusted

Business IndicatorsNEVADA

CLARK COUNTY

WASHOE COUNTY

UNITED STATES

T

46 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE APRIL 2018

“Nevada is certainly still a tax friendly state, especially as compared to states like California where we moved from. The lack of state income taxes alone make Nevada more friendly than most other states.”

Jeff RizzoFounder & CEORIZKNOWS and The Slumber Yard

“Nevada absolutely still offers a tax-friendly haven relative to other states. It’s why companies continue to flock here, and incredibly talented entrepreneurs are beginning successful businesses here.”

Brian LoyPresident | Sage Financial Advisors “The answer is yes. I run my

business in 11 Western states. Nevada has no state income tax, which means that all retirement income is tax-free at the state level. The Commerce Tax is intended for education, but not for business friendliness. It should be revised to reflect net sales, not gross sales. Overall, I give us a B+ for tax friendliness”

Jared FisherOwner & CEO | Escape Adventures

How did you meet your significantother?

Do you think Nevada is still a tax friendly state?

“Absolutely! Living in Nevada with no state income tax is a big deal. Especially for Californians who are sick and tired of paying considerably more income tax on their hard earned income.”

Mike MixerExecutive Managing DirectorLas Vegas, Colliers International

Last Word

Download Our Planning Calendar Online Now! | NevadaBusiness.com

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