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4 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

Novembermayseemfarawaynow,butplansforthenextelectionsarealreadywellun-derway.NowisthetimetostartresearchingthefieldofcandidatestodecidewhoyouwanttorepresentyourinterestswhentheLegislatureconvenesinFebruary2015,andwhoyouwanttorepresentNevadainWashington,DC. Thisyear,morethanever,it’svitaltoelectpeoplewhowillsupporttheinterestsandrightsofthebusinesscommunity.Nevadaneedspro-businessofficeholderstobalancetherisingtideofbig-governmentProgressiveswhoseemintentondestroyingoureconomyaswellasourwayoflife.Democratscontrolledbothhousesinthe2013NevadaLegislature,makingitextremelydifficultforRepublicanstoblockanti-businessmeasures.Ifbusinessownerswanttohaveanyinfluenceinthenextlegislativesession,weneedtoelectmoreconservativeRepublicansinNovember.Nowisthetimetoeducateandmobilizeyouremployees;yourbusinessandtheirjobsdependonit. AsIpointedoutinlastmonth’scommentary,NevadavoterswilldecideinNovemberwhethertoinstituteataxongrossreceipts.Ifitpasses(whichwouldbeadisasterforNe-vadabusinesses),thenextLegislaturewillhavetoanswerquestionsaboutthedetailsofsettingitup.Ifitfails,youcanbetthatDemocratswillputforthplentyofothermeasurestoraisemoneyattheexpenseofNevada’sbusinesses.Eitherway,weneedelectedofficialswhorealizethatjobsarecreatedbybusiness,notbygovernment,andthatexcessivetaxa-tionandover-regulationwillkilljobsinNevada. AlthoughthefinaldatefordeclaringcandidacyisMarch14,severalpromisingcandi-dateshavealreadyannouncedthatthey’rerunning.Herearejustafewofthem: Niger Innis, 4th Congressional District.InnisisaconservativeAfrican-AmericanandTeaPartymemberwhoservesasthespokesmanfortheCongressonRacialEquality.HehopestounseatRep.StevenHorsfordbyreachingouttominorityvotersinthe4thcongres-sionaldistrict,whichis54percentnon-white.HebelievesconservativevaluescanhelpfindsolutionstoAmerica’schallenges. Adam Laxalt, Attorney General.AnexperiencedattorneyandaNavyveteranwhoservedinIraq,Laxaltisanopponentoffederalinterferenceinstatemattersandhasprom-isedtosupportNevadabusinesses.Heiscommittedtofreemarketprinciplesandpledgestofightagainstthepoliciesthattiethehandsofjobcreators. Patricia Farley, Senate District 8.Farleyownsaconcrete,pavingandmasonrycom-panyandisfamiliarwiththechallengesofbusinessowners.AstheformerpresidentofAFAN,whichprovidesservicestopeoplewithAIDS,shebelievesthatwecanbecompassionateaswellasfiscallyresponsible,andwilllookforwaystomakeourgovernmentmoreefficient. Becky Harris, Senate District 9.Harrisisamilitaryspouse,practicingattorney,andhasassistedherhusbandwithhissmallbusinessforthelastnineyears.Herthreeareasofconcernareeducation,jobsandhousing.ShebelievestheseissuesmustbeaddressedinorderforNevadatohaveaprosperousfuture. Michael Roberson, Nevada Senate District 20. ElectedtotheSenatein2010,Rober-sonservedastheMinorityLeaderinthe2013session.Astaunchdefenderofconservativevaluesandbusinessprinciples,Robersonwasa2011recipientofthe“DefenderofLiberty”awardfromtheAmericanConservativeUnion(ACU). Foranupdatedlistofcandidates,visitthewebsiteoftheRepublicanpartyinyourareaofthestate.Thencontactthecandidatesfromyourdistrict,interviewthemand,ifyouagreewiththeirpositions,throwyoursupportbehindthem.Asthefilingdeadlineapproaches,Ihopemoreyoung,conservativeNevadanswilldecidetorunforoffice.Ourstatedesperatelyneedsthemtohelpussteeracoursetowardfiscalresponsibilityandtoprotecttheliveli-hoodsofNevadabusinessownersandtheemployeeswhodependonthem.

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

November 2014 Elections:Support Pro-Business Candidates Now

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The Commentary

5FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

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Contents

8 COVER Corporate Branding A How To Guide by Doresa Banning

12 FEATURE Banking On Nevada A New Day Dawning by Jennifer Rachel Baumer

17 INDUSTRY FOCUS Healthcare

28 BUILDING NEVADA Back to Basics Architects and Engineers in Nevada by Jean Lauf Walpole32 RED REPORT

Tracking Nevada’s Deals

4 Commentary by Lyle Brennan

22 Face to Face Miriano Ravazzolo, Travis Crowder, Shelley Berkley

23 Power of Attorney Are unpaid internships becoming a thing of the past? by Robert Rosenthal

24 Free Market Watch The Left’s New Agenda by Geoffrey Lawrence

26 Profit & Loss Profit and Loss Statements by Al Wagner

27 Around the State36 Commercial RE Report

Industrial

37 Business Indicators

38 The Last Word What do you enjoy most about being a business owner and/or executive?

DEPARTMENTS

ON THE COVER: (L TO R)

Randy SnowR & R PartnersDarcy NeighborsCIM Marketing PartnersKassi BelzMassMedia Corporate CommunicationsDave KirvinKirvin Doak CommunicationsStephanie KruseKPS | 3 Advertising and MarketingB.C. LeDouxThe Glenn Group

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8

CORRECTION: In the January Building Nevada story, the sale of Reno’s US Bank building was incorrectly attributed. The NAI Alliance Office Properties Group was the brokerage team responsible for the building’s sale and the correct sale amount was $5.98 million.

PHOTO BY:Chris Tucker

Photographed with permission atThe Neon Museum,Las Vegas, Nevada

7FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

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digital!Nowavailable,FREEforalimitedtime.

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8 NEVADA BUSINESS MAGAZINE FEBRUARY 2014

Cover Story

The Neon Museum in downtown Las Vegas (featured here and on cover) showcases the signs that have been pivotal in branding Southern Nevada as America’s Playground.

9FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

What differentiates similiar com-

panies,makingonestandout from

the pack? Why do potential cli-

entschooseoneover theother for

theirservices?Theanswerisinthe

brands.Branding,whilesecondna-

turetosome,remainsamysteryto

numerousotherbusinesses.Infact,

a common belief is that a compa-

ny’sbrand is its logo; this isn’t the

case. So what exactly is a brand?

What isbranding,andwhatdoes it

involve?

A HOW TO GUIDE

By Doresa Banning

Corporate Branding

10 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

about you. You want people to be loyal to

you. You want them to hold you close. You

have to help them along with that.”

Identifying the Brand It’s best to start the work of branding

before launching a company, experts say.

But the process can begin any time, and

the sooner it does, the better off a business

will be.

The first steps involve research, which

is crucial.

“A brand launch is a very unique and

interesting process. You get one chance

to do it correctly because you want to

come out of the chute in position correctly

against competition already in the market-

place,” said Stephanie Kruse, president

and chief strategist of KPS|3, a Reno-

based marketing, advertising, public rela-

tions and digital firm.

Research involves exploring and under-

standing staff, products/services (internal)

and studying both the target audience(s)

and competitors (external). For the internal,

determine the who, what, why and how of

a company, and identify what the business

isn’t. Ask questions like: What does the

company excel at? What is the vision for

operations? Can employees champion the

brand?

Figure out demographics, needs, be-

liefs and desires of a target audience. Fo-

cus groups and/or surveys may help. Gath-

ering this information outside of the com-

pany is essential.

Analyze competitors in terms of their

brands, offerings, product/service attri-

butes, pricing, messaging and more to

know what already exists in the market-

place. Where should the company’s brand

fall relative to your competitors’?

Understanding the internal, consumer

and competitive perspectives gives the

tools to hone in on a brand position, or

“the white space where a brand can make

a claim of distinction and live uniquely in

consumers’ minds,” LeDoux said.

“A brand is a company’s personality,

its unique essence, that ‘thing’ that al-

lows consumers to create an emotional

connection with a company and differ-

entiate it from other companies, in their

minds,” said B.C. LeDoux, president, cre-

ative director and partner of The Glenn

Group, an advertising, interactive and

public relations agency with its head-

quarters in Reno and a secondary office

in Las Vegas.

A brand is a promise that a company

will be, represent and do what it says it will.

It’s the foundation upon which every idea,

decision and action get tested.

“[A brand] resides in the hearts and

minds of customers, employees and pros-

pects. It’s the sum of their experiences

and perceptions about what your compa-

ny does,” said Kassi Belz, APR, president

of MassMedia, an advertising, marketing

and public relations firm headquartered in

Henderson with offices in Reno, Irvine and

Phoenix.

A brand is incredibly valuable, which

businesses often don’t realize.

“If you take Coca-Cola and add up all of

its assets—people, factories and recipes—

and assign a dollar figure to it and put a

dollar figure to its worldwide brand, I guar-

antee you the brand will be more valuable,”

said Randy Snow, chief strategic officer of

R&R Partners, a Las Vegas-headquartered

advertising and communications firm with

additional offices in Reno, Austin, Denver,

Los Angeles, Phoenix, Salt Lake City, and

Washington D.C.

Branding is the ongoing process of in-

tentionally positioning a company in a dis-

tinctive and favorable way in the minds,

hearts and souls of your target audience(s).

It’s critical in that it creates emotional and

rational connections with them and, ulti-

mately, drives sales.

“You want your brand position in your

customers’ minds,” Snow added. “You

want your promises to be front and cen-

ter. You want people to feel a certain way

BRANDING YOUR COMPANY Cover Story

• Truly understand your target audience(s). For instance, avoid building your brand around yourself as representative of that group if you’re not part of it.

• Conduct research instead of making assumptions, say, about your audience(s) or what current customers feel about your company. For example, talk to and question your customers about their feelings and beliefs instead of assuming you know what they are.

• Be open to the external feedback and research findings. Sometimes, what gets unearthed in the investigative process can be difficult to hear.

• Carve out what your company can be great at instead of trying to offer too much to too many people. A brand needs to be a niche.

• Create a budget for your branding efforts, and stick to it.

• Fall in love with and commit to your brand instead of frequently wanting to try a different one.

• Routinely communicate and reiterate your brand to your internal team.

• Be consistent in communicating and portraying your brand externally; deliver on your promise. Telling people you’re one way and acting another can kill your brand.

• Finally, keep in mind this statement from The Glenn Group’s LeDoux: “A strong brand with a distinct personality and message can make all the difference when it comes to standing out in a world of clutter and commodity.”

To facilitate a strong, effective brand, follow these expert-recommended must-dos:

BrandingEssentials

1

2

3

4

5

6

7

8

9

11FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

It’s vital that a business ensure the

brandpromise is true inallaspects.Cus-

tomerswilllearnandbevocalifit’snot.

“Ifthebrandisn’trootedintruth,noth-

ing else after thatmatters all thatmuch,”

Snowsaid.“Peoplewilldismissyou.Brand

isbelief,whichiswhytruthisthemostim-

portantthing.”

Evenbusinessesalreadyoperatingthat

haven’t purposefully engaged in branding

haveabrand.It’swhatcustomersthinkof

andbelieveabout thebusinessandoffer-

ings.Arelationshipbetweenthetwoexists,

the problem is the lack of control over it.

Thiscanputthecompanyinaperilouspo-

sitiontobein.

“Itcanbeagamblebecausethenyou’re

standingfornothingandlettingcustomers

andcompetitorsdeterminewhoyouare. I

don’tthinkthere’sabusinessouttherethat

wantstoleavetheirfatetosomeoneelse,”

saidDaveKirvin,co-partnerwithBillDoak

ofLasVegas-basedKirvinDoakCommu-

nications,apublicrelationsandmarketing

company.

Inmostofthesecases,it’seffectiveto

startwiththebrandthatexistsandtweak

or tend to it. But that, too, first requires

researchanddoing the foundationalwork

mentionedabove togeton trackwith the

desiredbranddirection.

“You really need to understand what

your clients and customers think about

yourcompanyalready,”Belzadvised.

Delivering the Brand Once the brand has been debated,

identifiedanddecidedupon,thenwhat?

“You can’t just say you’re X brand,”

Krusesaid.“Youhavetobeabletodeliver

it with the right staff, rightmanufacturing

process,customerservice,allofthethings

that allow you to deliver on your brand

promise.”

The next step is to develop a brand

platform, a document that specifies the

brand’sposition,purpose,mission,vision,

attributes,pillars,uniquesellingpointsand

understand and ex-

perienceabrandand

whatmakesitunique

and valuable,” said

LeDoux.

Nextcomesbrand-

ing internally. The

companymust “drive

the brand promise

down into the opera-

tionsof thecompany

so that the brand is

not an empty prom-

ise,” Kruse said.

Communicate the brand to everyone in-

ternally—employees, decision makers,

committee members, partners, directors,

etc.—togetthemonboardandboughtinto

value proposition. Then comes the diffi-

culttaskofdeterminingandestablishinga

brandingbudget.

“This platform becomes a North Star

for creating a visual and verbal identity,

experiential touchpoints andbrandproof

pointsthatallowconsumerstomoreeasily

Cover Story

CONTINUES ON PAGE 34

“If the brand isn’t rooted in truth, nothing else after that

matters all that much. People will dismiss you. Brand is

belief, which is why truth is the most important thing.”

— Randy Snow

nevadabusiness.com

TODAY!Subscribe

12 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

A NEW DAY DAWNING

Feature Story

Bankingdoesn’texistinavacuum;theindus-try isaffectedby theeconomicenvironment

which,inturn,canbedirectlyaffectedbyprac-

ticesandrealitieswithinthebankingindustry.

SoitshouldbegoodnewsthatNevadabank-

ersarefeelingoptimisticabout2014.

The banking industry has stabilized, ac-

cording to George E. Burns, commissioner,

Nevada Financial Institutions Division. Gen-

eral indicators show the industry is improv-

ing.Thereareimprovedloanportfolios,fewer

chargeoffsanddelinquenciesandimproved

earnings. “We’reoptimistic at thispoint that

thosebanks thathavesurvived thefinancial

crisiswillbegoodtogoforthefuture.”

Nevadastillleadsthenationwiththehigh-

estunemploymentnumbers,but thosenum-

bers are dropping, and in October numbers

indicateda1.8percentemploymentexpansion

overtheprevious12months.Inthesouth,Sum-

merlinCentreisgrowingupoutoftheground,

andcranesonTheStriparerenovatingtheSa-

haraHotelandCasino.“It’snicetoseecranes

flyingoverTheStripagain,”saidJohnWilcox,

Nevadaregionalexecutive,CityNationalBank.

Despite the optimism in the banking in-

dustry, Nevada continues to experience a

modest recovery. Businesses are beginning

tomoveagain,newbusinessesrelocatingto

thestate,existingbusinessesarecomingout

ofhibernationtogrowandexpand.Forbanks,

findingqualifiedborrowersisbecomingeasier

borrower-wisebuthardercompetition-wise.

Therearemorequalifiedborrowers than

thereweretwoyearsago.“People’sfinancial

statements are improving,” said Wilcox.

“We’veseenpeoplegetdebtofftheirbalance

sheets, seen them become much more

efficient, seen them accumulate cash, and

sowe’restartingtoseepeopleinvestintheir

growth,whichmeans they’ve got to have a

partnerinabanktocomealongbesidethem

tooffercapitaltofundthatgrowth.”

Nevadalostasignificantnumberofstate-

chartered banks to failures andmergers, but

competition is heating up between survivors.

“Themajorityoftheindustryisflushwithliquid-

ityandwe’re inaperiodofhistorically lowin-

terestrates,andthebestwayforbankstoim-

provetheirmarginsistolendmoney,”saidTerry

Shirey,CFO,NevadaStateBank.“Thereisnot

asmuchdemandforcreditrightnowaswesaw

priortotherecession,sogoodloansarehighly

soughtafterandthere’salotofcompetition.”

by Jennifer Rachel Baumer

13FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

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This helps stabilize the real estate market,

which helps the banks and borrowers in

manyways.Agoodexampleisthestart-up

businessesalternativelendinghasfundedin

downtownLasVegasandtheeconomicre-

surgencegoingonthere.”

Forthemostpart,manyofthealternative

lenderscomingintoNevadaareworkingwith

specific niche markets. “On the consumer

side, payday and title lenders are making

aprettygoodvolumeof loansandsuch to

thoseborrowersthathavebecomeunquali-

fiedinthetraditionalbanksensebecauseof

the financial crisis,” said Burns. Borrowers

whodon’tfitabankborrowingprofilemayfit

withasmall-dollar,short-termloanprovider.

Because of the high loss volume on such

loans, because the borrower’s credit isn’t

greatorhisemploymentisshaky,theloans

carryveryhighinterestrates.“That’snotreal

good forbanks forapublic imageor regu-

latorypointofview,andit’sunprofitablefor

theminmostinstances.That’sthenicheal-

ternativelendersasfarasconsumersgoand

they’refillingthatparticularniche.”

New Money in Town — Investors Aresurgenceofinvestorsmovingintothe

state has had an effect on Nevada banks.

“There’sbeenalotofcashaccumulatedover

thepastfiveyearsandwe’reseeinginvestors

cominginandbuyingmultiplepropertiesand

singlepropertiesatsignificantopportunities,

and that’s a sign that good things are hap-

pening, because those investors are smart.

They’renotgoingtocomeintoamarketun-

lesstheyknowtheycangetareturn,sothat’s

asignthingsaremovingintherightdirection,”

saidWilcox.“We’veseenlargeinvestorpools

andindividualinvestors;alotofmovementin

thelastsixmonths.”

Investors moving into the state have

helpedfueltherealestatepurchases,buying

bank-ownedproperties,saidHendricks.“The

increased demand helped increase real es-

tatevalues,whichhelpedexistingborrowers

andbanksshoreuploansthathavecollateral

New Concerns Despitetheapparenteconomicrecovery,

bankersarestilloperating inanenvironment

of uncertainty. The government shutdown in

thefallof2013followedbyconcernaboutdebt

ceilingandthehealthcarerolloutallhavethe

potentialtocauserecoverytostutterandstall.

“Todaywe’vegotabetterspiritofcoopera-

tionthanwehavehadinawhile,”saidWilcox.

“We’veseenabudgetpassedandI’mhoping

that’sasignofthingstocome.Becauseifwe

eliminatetheuncertaintyandpeoplecanplan

for their futures, thenweshouldcontinue to

seeprogressinthisrecovery.”

Notonlydoesuncertaintycausebusiness-

estohesitatebeforeexpandingorspending

moneyorseekingtoqualifyforaloan,recent

events like thegovernmentshutdownmeant

Small Business Administration (SBA) loans

were frozenandcouldn’t function; forbanks

therewasuncertaintyaboutwhentheycould

fundloansthathadbeenapprovedunderSBA

guidelines.

“Onebig concern for the industry is the

regulatoryenvironment,”saidGalloway.“Who

knowswhattherulesaregoingtobeandhow

they’regoingtobeenforced?Nobodyknows.

It’sanewgame.”

New Kids in Town— Alternative Lenders InNevada,bankershaven’tfoundalternative

lendersmovingintothemarkettobeasignifi-

cantissue.It’spossibleoncethemarketheats

up andmore borrowers are looking formore

loansandinterestratesgoupthattheremaybe

moreimpactfromthealternativelenders.

“Whencapitalisinjectedintothemarket,

itbenefitseverybody,”saidBruceHendricks,

CEO, Bank of Nevada. “Alternative lenders

areassistinginrepositioningfailedprojects.

Whichisgreatforthebusinessesthem-

selves. For qualifiedborrowers, it’s a buy-

er’smarketwhere twoor threebanksmay

be vying for the company’s business. In

this recoveringeconomy,whenabusiness

owneralreadyhasarelationshipwithabank

they’reapttostaywithit,saidGeneGallo-

way,presidentandCFO,PlazaBank.“Since

there’snota lotof in-migration in termsof

businesses, those of us who are growing

have to take clients from each other, and

that’salongerprocess.”

Addingtothecompetition,noteverybusi-

nessownerwhocanborrowmoneywantsto.

When it comes to bankers finding qualified

borrowers in the post-recession economy,

it’smoreacaseof laggingeconomicrecov-

eryandborrowershavingneedorcapacityto

borrow, rather than thenewregulatoryenvi-

ronment,saidBurns.

“Regulations are changing the industry,

some for good, some not so good for the

industry, in response to the financial crisis,”

saidBurns.“Butmostofitisjustbeingable

tofindpeoplewhohavetheneedtoborrow.

Businessesarelaggingandtheydon’tborrow

unlesstheyintendtoexpand.”

The need to borrowmay not be present

even if the ability to do so is. “If business

owners do have the need and the income

streams to support the borrowing, what are

theygoingtouseitfor?Togrow,orjusttotryto

coveroverheadexpenses?Althoughbankers

liketoblameregulationstoaverygreatdegree

for lending doubt out there, if they’re honest

withthemselves,theywouldsayit’sreallyjust

thedemandisn’tthere,”saidBurns.

Still, it’s improving. Nevada State Bank

grewloansabout$115millionin2013forthe

first time since 2008 and funded about $51

million in small business loans, which was

aboutflat fromtheprioryear,butconsumer

loansfundedwereabout$235million,up$67

millionfrom2012.“Alotofwhatwe’reseeing

and saw in2013wasa lot ofpeople taking

advantage of the low interest rates and low

homeprices toeither refinanceorpurchase

newhomes,”saidShirey.

Feature Story BANKING ON NEVADA

John

WilcoxCity National Bank

15FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

shortfallsandweareseeingimprovementin

appraisedvalue.”

Noteveryinvestormovingintothestateis

goingtowanttoworkwithalocalbank.Those

local investors who have relationships with

banksmayworkwiththatbankinadvanceto

positionthemselvesinthebestsituationthey

can for bank financing and personal equity,

whileother investorscome to the tablewith

financing already arranged or with cash in

hand,self-funded.

“To a large degree, the larger investors

havetheirownmoneyalreadyassembledfor

investment,”saidSullivan.“Somecomefrom

very large institutional investors from Wall

Street.Weareseeingsmaller investorswho

dolookforlocalfinancingandourbankhas

beenactiveinthissegment,bothforcommer-

cialandresidentialproperty.”

PlazaBankhastwolocations,inSouthern

CaliforniaandinNevada,andhasseensome

in-migrationofclientsfromOrangeCountyto

realestate,oneoftheeconomicsectorshard-

esthitbytheeconomicdownturn.Thatmarket

isbeginning tostabilizeandrecover,butac-

quisitionsanddevelopmentloansforcommer-

cialrealestatewereprimarylinesofbusiness

forsomebanksandthatmarketwillprobably

neverrecovertothelevelsithadhitin2007.

“The typical commercial real estate as-

set declined in value 40 percent or more,

andrentalratesalsodeclinedbyasignificant

amount,” saidJohnSullivan,president,First

SecurityBankofNevada.

Whichmeansbanksarelookingforother

linesofbusinesstopursuesotheycansup-

portoperationsandmakeaprofit.Banksare

lookingatmoreconsumerlending,smallbusi-

nessloansandSBAlendingwherethere’sa

government guarantee to help back up the

loans being made. They’re providing more

servicestotheircustomers,andthey’rebeing

Nevada.“We’vebeenabletohelpthembe-

causewe’reinbothmarkets,whichisunusual

foracommunitybank,”saidGalloway.

In the newpost-recession banking envi-

ronment,bankersmayactassilentpartners

for thebusinesses theyworkwith, investing

timeandenergyandworkingwith thebusi-

ness, meeting quarterly to review financials

andprogressandtogiveadvice.

Changes Oneofthebiggestpost-recessionchang-

es to affect banks is the neweconomic en-

vironment. For many state chartered banks,

theirprimaryeconomicdriverwascommercial

Feature Story

CONTINUES ON PAGE 25

Gene

GallowayPlaza Bank

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17FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

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Rod Woodbury, Southern Nevada Health District • Eric Olsen, Gordon Silver • Susan Reisinger, 21st Century Oncology • Andrew Cash, Desert Institute of Spine CareRandal Shelin, Desert Radiologists • Don Giancursio, UnitedHealthcare • Puneet Garg, Gordon Silver • Robert Freymuller, Summerlin Hospital

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18 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

M. DONALD KOWITZ:Theindustryseesthe

needstochangethedeliverysystemandto

make use of every dollar in themost effi-

cientandquality-effectiveway.Also,there’s

somuch information out there for health-

careconsumersthatisconfusingandinac-

curate,whichcausespeopletomakedeci-

sionthatmaynotbetherightones.

ROD WOODBURY: In public health we are

facing the economic challenges just like

everybodyelse.TheACAissomethingthat

wearegrapplingwithtryingtofigureoutthe

uncertaintiesthatcomewithitandhowthat

impactspublichealth.Lookingtothefuture,

howcanwebetterpartnerwithothermedi-

cal providers for medical resources that

theymaynothave.

SHERIF ABDOU: The challenge that we’re

facing is rather simple but monumental:

torepurposeourmoraldirectionstoserve

asapatientcareindustry.Thesystemthat

webuiltdoesnothavethepatientinit;it’s

notaboutwhat’sbest for thepatients. It’s

what’sbest economically for theorthope-

dicsurgeonsorforthepublicly-accredited

largemedical group, etc. The system that

weneedisaboutwhetherit’sgoodforthe

patientornot.Thatshouldbethefirstques-

tionthatweanswer.

WHAT’S THE STATUS OF THE ACA AT THIS POINT?KOWITZ: It’snot likewemissed theenroll-

ment projections by 10 to 15 percent; we

misseditby60to80percent.Everyweek

thereare improvementsbuteverytimewe

movepast those initialproblems there’sa

wholedifferentseriesofproblems.There’s

a task force that the governor has orga-

nized thatmeets three times aweek, and

itdoesmake incrementalchangesbut it’s

stillbeenverydisappointinghowtherollout

occurred.

REISINGER: I have some patients that are

verysmartthatjustdon’thavehealthinsur-

ance.Theydon’tunderstandtheneedforit

evada’s healthcare industry

continues to see an increasing

numberofchallenges.Withthe

rollout of the Affordable Care

Act (ACA)andtheongoing issueofphysi-

cian and specialist shortages, healthcare

executives in the Silver State are working

to adapt while ensuring quality care for

theirfellowNevadans.AgroupofNevada’s

healthcare leaders recentlymet at the of-

ficesofGordonSilvertodiscussthetrends

andobstaclesfacingtheirindustry.

Connie Brennan, publisher and CEO

of Nevada Business Magazine, served as

moderator for the event. These monthly

roundtablesaredesignedtobringtogether

leaders to discuss issues relevant to their

industries. Following is a condensed ver-

sionoftheroundtablediscussion.

WHAT ARE THE GREATEST CHALLENGES IN HEALTHCARE?RANDAL SHELIN: Our industry brings to

mindtheexpressio,“howtodomorewith

less.” Unfortunately, that is more appro-

priate now than ever before. Everyone in

healthcareneedstoworkcollaborativelyto

find efficient healthcare delivery systems

that letusstretchthose limitedhealthcare

dollarsandprovidenecessaryservicesfor

ourcitizens.

SUSAN REISINGER: There’s not a day that

goesbywhereIdon’tseedelayoftreatment

becauseofuninsuredpatients.Areallybig

challengeistoeducatepeopleonwhatthey

needtodonowthattheACAishere.

DON GIANCURSIO: The sustainability and

the consequences of how the ACA is be-

ing funded in terms of cuts to Medicare,

the cost that gets passed onto consum-

ers and the impact on job creation. All of

thosethingstogetheraregoingtobecon-

sequencesthatwe’regoingtostarttosee

anddealwithin2014.

PUNEET GARG:The further implementation

andadoptionof theAccountableCareOr-

ganizations (ACO) model, seeking to cut

costs and focus more on quality metrics.

Challengeswefaceinfurtherimplementa-

tionofthatmodelarephysicianintegration,

dataintegrationandsharingrisksamongst

the various entities, information mobility

andsecurityandhowtoproperly leverage

lowerlevelpersonnelandthetechnologyto

achievecomparablequality.

Industry Focus

N

HEALTHCARE

19FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

untiltheygetsick.Itreallycomesdownto

education.

GIANCURSIO: The carriers have given the

Exchange leadership ideas and direction

and suggestions on how to do this as ef-

ficientlyaspossible.Wherewearetodayis

notwhereweneedtobe.It’sveryfrustrat-

ing. The resources necessary to develop

newproducts,toreconfiguresytems,tobe

prepared,tohandletheonslaughtofenroll-

mentjustisn’tthere.Therehastobeamore

efficientwaytodoitthanthecurrentmodel;

whatwe’redoingrightnowisarchaic.Atthe

heartof it,we’re trying togetpeoplecov-

eredwhoareeligibleandit’sfrustratingthat

wecan’t.We’regoing tocontinueworking

ashardaswehavetowork,butit’sjustdis-

appointing. Ihave tobelieve that this time

next yearwewill have had a better result

becausetheywillhavehadenoughtimeto

figure out how to do the basic electronic

datatransferthatwehadexpected.

KEITH BRILL:Half thecountryanda lotof

themediaisopposedtoanythingthathas

todowithObamaCare,eventhemediathat

mightbemoreleftleaning.Therearebusi-

nessmenandstatepolicymakers trying to

workon thisbutyouhave themediacon-

stantlytalkingaboutthenegativesofit.The

realityispeoplestillthinkthismaynothap-

pen yet or it’s notworth their time at this

point.

SHELIN: The ACA is bringing back funda-

mental changes, which probably would

havehappenedwithmarketforcesanyway.

Inthepast,weworkedwithpay-for-volume

whereprovidersgotpaidforeachstudyor

testwedid.We’rechangingthatparadigm

to pay-for-value or quality and, ultimately,

that’stherightdecisionforthecountryand

we’removingtowardstherightdirection.As

webuild thesesystems tobetter integrate

our delivery system and to becomemore

efficientandbetterquality,it’sawinforthe

patientbecauseyoucanreducetheredun-

danciesandthecosts.Ultimately,Ithinkit

will prove to be a positive for the country

but itwillbeaverydisruptiveanddifficult

processtogetthere.

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20 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

HOW IS THE QUALITY OF HEALTHCARE IN THE SILVER STATE?ABDOU: The Commonwealth Fund ranks

Nevada at 42nd and United Health Founda-

tion ranks us at 46th for quality of health-

care. There’s mediocrity and accepting

of mediocrity is hardwired for healthcare

in Nevada and we need to grow our way

out of this. Patients, doctors, nurses, sys-

tems – we settle, we accept and we make

a lot of money from mediocrity. We need to

change that.

SHELIN: The basic fundamental tools for

quality care are here. We’ve got phenome-

nal physicians successfully recruiting doc-

tors coming out of Duke, John Hopkins,

Stanford – these are doctors that can go

anywhere in the country but they choose

to come to Nevada to practice. Ultimately,

it’s how we build the relationships because

we can provide great care but it’s how we

coordinate the care between the general

practitioners and specialists and how that

care is delivered.

BRILL: The overall question for quality of

care is difficult. There are a lot of excellent

doctors here but it takes a certain volume

of doctors providing quality care to bring

more doctors here. Doctors typically stay

where they train and we don’t have a lot

of specialty programs. Even those we do

have are not going to meet the needs of our

state. We need to really focus on the quality

of care we already do have.

HOW SEVERE IS THE SHORTAGE OF CARE PROVIDERS?ROBERT FREYMULLER: The shortage will

be exacerbated by our success with the

ACA. If you enroll 200,000 people in Med-

icaid, much less private insurance products,

there’s not going to be a primary care deliv-

ery system to accommodate those patients.

ABDOU: A lot of the shortage is self-in-

duced. If you change the economics, there

will be a 20 to 30 percent drop in volume,

not in new patients, but in repeat visits.

Doctors who have financial incentives in

tests are 12 times more likely to order the

tests for the same diagnosis than it is for

the other group that doesn’t have the finan-

cial motive. The economics have impacted

our actions for a very long period of time

and we have taken it for granted.

SHELIN: One reason for the loss of attrition

is the spouses. If they’re not happy then

the doctors aren’t happy. We encourage

the spouses to come in during the inter-

view process because the last thing we

want to do is go through the expense and

effort only to have them not be happy and

leave. Usually they’ll come here because

it’s a good economic opportunity, but then

after a while it’s the quality of life that the

spouse doesn’t like. But we’re building a

better sense of community than we’ve had

in the past. We’ve been such a transient

city for years and years that now we’re fi-

nally becoming a more stable community

where people stay here and call it home.

FREYMULLER: [It’s] not just quality of life,

but also spousal employment. Our robust

business climate where there are spousal

employment opportunities as we diversify

and grow will be key, along with education

for the families.

BRILL: Even at the physician level decid-

ing where you’re going to practice, every-

thing is at the personal level. If you’re not

from there or train there, you need to know

someone there. Once you get a critical

mass of doctors from outside our com-

munity, people start to talk. It’s just going

to take time for us to build up good doc-

tors from outside the community who will

then go talk to their graduating residents to

come here.

HAS A SHIFT IN WHO DELIVERS PATIENT CARE AFFECTED PERCEPTION OF THE INDUSTRY? ERIC OLSEN: Most patients want to see the

doctor, not the physician assistant (PA) or

nurse practitioner (NP). That’s changing.

With the economics, you have to have more

PAs and more NPs.

ABDOU: The first mission is the bridge be-

tween expectations and reality. What we

didn’t do well with the system integration

is we didn’t set the expectations for the

patient. If you go to hospital committees,

they would say to never let the nurse prac-

titioners see the patient because they are

lower level. We have built the expectation

that seeing the nurse practitioner is a lower

level and if you allow patients to be seen

by NPs then you’re a bad hospital, medical

group, etc., which is not true.

GIANCURSIO: You’re going to have supply

and demand constraints. As more people

come into the system, if we were hugely

successful with Medicaid expansion and

the individual exchange, you’re going to put

almost 600,000 people in the healthcare

system and they’re going to want to see

Industry Focus HEALTHCARE

21FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

somebody. If an individual has a routine

typeofcaretheymaybetotallyfineseeing

thePAbecausetheywanttheeasiestand

quickestwaytogetcare.

ANDREW CASH:It’saparadigmshiftinthe

patient’sexpectationsandperceptions.It’s

going to take time and it’s going to be a

one-on-onebasisastheyindividuallyshow

uptoaclinicorhospitalandlearnwhatthe

newexpectationsare.

BRILL: Clark CountyMedical Society and

NevadaStateMedicalAssociationtestified

sayingexpandingtherolesofNPsisgreat

andit’swhatourstateneedstoexpanda

team-based approach for collaboration

and to allow more access in rural areas.

Butour statehasdecided that’snot true,

whichisabigconcern.They’restilldefining

attheBoardofNursingwhatthescopeof

practiceisforanursepractitioner.Alotof

the languageof the law is still sayingyou

shouldnothaveacollaboration.Forquality

care, physician providers and leadership

needtomakesureeveryoneisonateam.

WILL INDIVIDUAL MEDICAL GROUPS SURVIVE THESE CHANGES?CASH: Private practice primary care doc-

torsarebountifulbutquicklydiminishing.I

don’tthinkthey’llbehereinfiveyears,they

justcan’tcompete.

ABDOU:Neithershouldthey.Theyhavesat-

urated the fragmented,dysfunctional sys-

tem.Ifyoucreateasystemyoucanholdit

accountable,youcanmeasureit.Bigmet-

ropolitan areas should be dominated by

systems. Hospitals should be included in

that,integratedwithphysiciangroupsand

others. That systemneeds to start devel-

opingandbuilding.Allofthequalitydata,

especiallysurgicaldata,isrelatedtoalone

practice inoneplacewith thesame team

foralongperiodoftime.Theywillproduce

abetteroutcome.

WHAT IS THE FUTURE OF HEALTHCARE?GIANCURSIO:Thehealthcareconsumer in10

yearsisgoingtobedifferentthanthehealth-

care consumer we’re talking about today.

They’regoingtobemoretech-savvyandtech-

nologyisgoingtobemoreapartofthehealth-

caredeliverysystem,whetherit’stele-health,

tele-medicine,electronicmedicalrecords,etc.

Educationisgoingtobecriticalandpeople’s

expectationsaregoingtobedifferent.

SHELIN: Theeconomicsarewe’regoingto

havephysicianextenders.Byusingtechnol-

ogyandleveragingthat,wecanhelpthem

dobetterjobsaswell.Wecanhelpthephy-

sician extenders do the right thing for our

patients the first time. They’re there and

we’re going to have to integrate them into

oursystemandmakesureweguide them

tousethetechnologicalservicesproperly.

FREYMULLER: Coordinationofcareissyn-

onymouswithqualityofcare.Ifyou’repart

ofasystemwitharobustITplatform,ifthe

healthinsuranceexchangescometogether

wheretheprimarycareandspecialistsare

gettingalertssotheycantakepreemptive

or proactive action with patients, that’s

where it’s going to pull together and the

qualitywillcomefromthat.

Industry Focus

Nevada Department of Transportation (NDOT) has published a freight assessment evaluating key Nevada economic indicators and the state’s approximately 110 million tons of annual truck, rail, air and pipeline freight commerce to identify areas for potential future growth and development. The assessment is available on NDOT’s website.

IN BRIEF

22 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

MIRIANO RAVAZZOLOCEO

MB America, Inc.

TRAVIS CROWDERChief Professional Officer

Boys & Girls Clubs of Mason Valley

SHELLEY BERKLEYCEO & Senior Provost

Touro University NevadaTouro Western Division

RENO YERINGTON LAS VEGAS

HOW DID YOU FIRST GET INTOWHOLESALE DISTRIBUTION OFCONSTRUCTION MACHINERY?I started in corporate Europe where

Igainedextensiveexperienceduring

thattime.ImovedtoNevadain2002,

astheCEOofamulti-nationalcompa-

ny,afterthatIworkedasaconsultant

for several years and then in 2010, I

becameCEOofMBAmerica,Inc.

WHAT DO YOU LIKE MOST ABOUT YOUR INDUSTRY?WhatIlikemostabouttheindustryis

thatconstruction fuelsoureconomy,

anditfeelsgoodtoparticipateinthe

developmentofthefield.

IF YOU COULD BE REMEMBERED FOR ONE THING, WHAT WOULD IT BE?Iwanttoberememberedfordoingthe

bestIcanforthesakeofthecompany

Irepresentandallthepeopleinvolved.

WHAT IS A LITTLE KNOWN FACT ABOUT YOURSELF?ThatIhavearealaccent.

HOW DID YOU FIRST GET INTOYOUR PROFESSION?IstartedworkingforBoys&GirlsClub

in Carson City when I was 20 years

old as an Athletic Director. It was

full-timeworkanditwasworkingwith

kidswhichwasaperfectstorm!

WHAT OTHER TYPES OF WORK DO YOU ENJOY?Ihostadaily radiomorningprogram

inourareaonKSVL92.3FM. I have

donesofornearlyfiveyearsnow!

IF YOU COULD STOP TIME, WHAT MOMENT WOULD YOU WANT TO RELIVE OVER AND OVER AGAIN?Theday Imetmybeautifulwifeof20

years!Iamsoblessed!

WHAT WAS THE TOUGHEST LESSON YOU’VE LEARNED IN YOUR CAREER?Patienceforsure.Westruggledforseveral

yearstogetwherewearetodayandIwish

Iwouldhaveknownthenthatitwouldfeel

this good to seewherewe have come.

Thatbeingsaid,goingthroughthosedif-

ficulttimesprovidesmewithadeepap-

preciationofwherewearetoday!

WHAT DO YOU LIKE ABOUTYOUR INDUSTRY?Iamexcitedtoleadaninstitutionthatis

educating Nevada’s future healthcare

and educational professionals. Touro

is thestate’sbestkeptsecretand Iam

workingtochangethat.

WHAT WAS THE TOUGHEST LESSON YOU’VE LEARNED IN YOUR CAREER?ThebestlessonI’velearnedisthat“when

onedoorclosesanotheropens.”That is

what Ifindsoexcitingabout thisoppor-

tunityatTouro.Iamabletotaketheex-

periencesI’vehadthroughoutmycareer

inpublicandcommunityserviceandhelp

taketheuniversitytothenextlevel–pro-

viding high quality education, expanded

outreachinthecommunity,andenhanced

programsandservicesthatdirectlyben-

efitthecitizensofNevada.

IF YOU HAD TO CHOOSE ANOTHER PROFESSION WHAT WOULD IT BE?ALasVegasloungeact–whynot!

WHAT MOMENT WOULD YOU WANT TO RELIVE OVER AND OVER AGAIN?Thebirthofmychildren.

Face to Face MOVERS & SHAKERS

23FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

mployers in Nevada and every state have historically used unpaid interns for a variety of reasons, it being taken for granted that the research, filing

and coffee-schlepping were necessary steps to career growth. Now, as 2014 gets underway, a series of closely-watched lawsuits may mean that the army of interns may not be back next sum-mer—or at least not in the same capacity. It all started in 2011 when Eric Glatt and Al-exander Footman brought a class action against Fox Searchlight Pictures Inc. and Fox Entertain-ment Group, Inc. (collectively “Fox”). The two had worked as unpaid interns on production of the film Black Swan in New York. Their lawsuit contended that Fox violated labor laws by classifying them as unpaid interns instead of paid employees. A Department of Labor fact sheet helped the court evalu-ate whether interns at for-profit businesses fall within an ex-ception to the employer-employee relationship. The fact sheet lays out six criteria for determining when an internship may lawfully be unpaid:

1. The internship is similar to training that would be given in an educational environment (and not merely on-the-job training that employees receive).

2. The internship experience is for the intern’s benefit.3. The intern does not displace regular employees (but is

closely supervised by existing staff).4. The employer derives no immediate advantage from

the intern (and on occasion the intern may actually impede operations).

5. The intern is not necessarily entitled to a job follow-ing the internship.

The employer and the intern understand that the intern is not entitled to wages during the internship. In June 2013, the court found that Fox received the ben-efits of the plaintiffs’ unpaid work, which consisted of largely routine tasks and would otherwise have required paid employ-ees. While there was no evidence plaintiffs were entitled to jobs at the end of their internships, and plaintiffs understood

they would not be paid, the court found that plaintiffs were still improperly classified as un-paid interns and instead were “employees.” The benefits plaintiffs may have received—such as knowledge of how a production office functions or references for future jobs—were the results of simply having worked as any other employee works, not of internships designed to be unique-ly educational and of little utility to the employer. In the wake of the Glatt case, which is now on appeal, Hearst Corp., Donna Karan, NBC Universal, Inc., Warner Music Group Corp., Conde Nast and Gawker Media LLC have been sued in very similar cases. After the lawsuit was filed against it, publishing giant Conde Nast an-

nounced it was ending its internship program. These lawsuits may mirror a larger societal shift in the ac-ceptability of using unpaid interns. Recently, Sheryl Sandberg drew criticism for posting unpaid internship positions for her not-for-profit foundation, LeanIn.Org. (Although in fairness, the criticism may be exacerbated by her wealth and the foun-dation’s aim.) The exposure to employers for using unpaid interns can prove quite costly: unpaid wages and overtime can be recov-ered for a period of two years (three years in the case of a willful violation), and a court may double the amount owed, as liquidated damages. What then are employers to do? In the short-term, employ-ers should analyze their intern hiring practices in light of the six criteria listed above to determine whether an internship can remain unpaid. In the near future, employers should consider proactively implementing written policies shaping unpaid internship programs to ensure compliance with those criteria. From a non-legal perspective, employers may also wish to more fully weigh the economic and publicity pros and cons of using unpaid interns. While it is too soon to tell what the Glatt case and oth-ers might mean for local businesses and their own internships programs, come next summer there may be a few more ex-ecutives schlepping their own coffee.

ARE UNPAID INTERNSHIPSBECOMING A THING OF THE PAST?Robert Rosenthal is an employment attorney at Howard & Howard in Las Vegas.

Power of Attorney

Robert

RosenthalHoward & Howard

E

24 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

apitalism did not create poverty—it inherited it,” ob-served individualist philosopher Ayn Rand. Over the past centuries, capitalism has eradicated the previous conditions of widespread famine and star-

vation and has elevated the living standards of the poor to a level previously unheard of, even for kings. Today, even low-income Americans commonly enjoy cell phones, automobiles, a clean liv-ing environment, modern medicine and access to the world’s col-lected knowledge through the internet. Despite this evidence of capitalist progress, President Obama warns of “a dangerous and growing inequality…[that is]…the de-fining challenge of our time.” Senate Majority Leader Harry Reid adds, “There is no greater challenge this country has faced than in-come inequality. And we must do something about it.” Obama, Democrat leaders and some Republicans, including Nevada Sen. Dean Heller, have called for government to smooth out this “inequality” by extending unemployment benefits while “progressives” are also pushing to raise the national minimum wage. The new agenda promotes an idea that society’s most successful individuals achieve that success only at the expense of those whose achievements are more modest, and that this produces a growing gap between the rich and the nominally poor. This gap, we are implicitly told, would shrink if only our oh-so-benevolent politicians enact rigid price controls on labor, send bu-reaucrats to meddle with the decisions of small business owners and send workers more checks for not working. This is literally the plan. Yet, the central message behind the new agenda — that capitalism somehow favors only a handful of people — is demonstrably false. Consider data from the nonpartisan Congressional Budget Of-fice, which shows that, between 1979 and 2009, households in the bottom income quintile saw after-tax income growth of 44.8 per-cent. Middle-class households saw growth of 35.8 percent, while those in the top quintile saw after-tax income grow 72.8 percent. Those figures mean that living standards have increased for every-one, even if at slightly different rates. Even these objective figures, however, mask the ongoing move-ment of households from one income quintile to the next. Very rarely does an individual remain in the same income group throughout life.

The Census Bureau estimates that within just three years 38 percent of those in the bottom income quintile climb to a different quintile. Over the same three years, one-third of those in the top quintile fall to a lower quintile as new up-and-comers push them out. And, more than half of households in the middle three income quintiles move to a different quintile within three years. The fact is, statistics that only look at the difference in earning growth between the various income groups obscure the individual-istic nature of capitalism and create the impression that we all be-long to defined income classes that are in constant conflict. If, then, one’s position on the income scale isn’t determined by one’s position in previous years, what are the determining factors? Primarily, it’s the decision to work. David Henderson at the National Center for Policy Analysis ana-lyzed 2006 Census data and found that 81.4 percent of households in the top income quintile had two or more people working, while only 2.2 percent of those households had no one working. For households in the bottom quintile, only 12.6 percent had two or more people working, while in 39.2 percent of the households, nobody was working. So, if working is the key to income growth, then how do Sen. Heller and Democrat leaders argue that extending unemployment benefits —paying workers to not work — will help the economy? It won’t. The Organization for Economic Co-Operation and Development (OECD) Employment Outlook concludes, “It is well established that generous unemployment benefits can increase the duration of unemployment spells and the overall level of unemploy-ment.” The best economic “stimulus” would be curtailing the cur-rent disincentive to seek gainful employment. The Left’s narrative on the minimum wage is even more off the mark. Such a legal wage floor increases the difficulty of finding entry-level employment. That’s why economists Richard Burkhauser and Joseph Sabia found “no evidence that minimum wage increases… lowered state poverty rates” when they examined 28 states that increased mini-mum wages between 2003 and 2007. As Arizona congressman Jeff Flake says, “A minimum wage in-crease is good politics but bad economics.” And that, after all, appears to be what the new agenda is all about — a short-sighted effort to exploit general economic illiteracy for electoral advantage.

THE LEFT’S NEW AGENDA

Geoffrey Lawrence is deputy policy director at the Nevada Policy Research Institute.

MINIMUMWAGEHIKESANDUNEMPLOYMENTBENEFITSAREN’TTHEKEYTOPROSPERITY

Free Market Watch

C“

COMMENTARY

25FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

CONTINUED FROM PAGE 15

morecreative.“Allofwhichisgoodnewsfor

businessesworkingwithbanks,”saidBurns.

Thebankingindustryasawholeisdedi-

catingmoreresourcestoriskmanagement,a

changedriveninpartbynewregulationsbut

muchofitalsoself-imposed,saidShirey.

Bankersareworkingharderandsmarter.

Theycannolongersimplyadvertisetheirlow-

est rates and create loans. Today they dig

deeperthantheinitialrequestforfundstodis-

coverthetrueneedsoftheborrowerandad-

dressthoseneeds,whichsometimesrequire

asolutionthat’sdifferentthanwhattheclient

anticipatedinthebeginning.

“Sobankinghaschangedinthatwehave

to be real consultants in terms of coming

alongside clients and potential clients and

makingsureweunderstandwhattheirneeds

areandmeetthoseneedsasopposedtojust

respondingto‘whatareyourratesandwhat

doyoucharge?’”Wilcoxsaid.

Asforinterestrates,conventionalwisdom

says if theymoveatall in2014,they’llgoup,

thoughprobablyonlyslightly.It’salsonotreally

aquestionofifthey’llgoupthisyear,butwhen.

Creating a Future Thehope for 2014’sbanking industry is

continuedstabilizationandforbankstocon-

tinue improving regulatory status of safety

and soundness,meaning improving capital

levelsandincreasingthevolumeofqualified

loans.

ShireysaidNevadaStateBankwouldlike

toseemoredemandforcreditasaresultof

economic growth. “That’s what really fuels

demandforcredit–peoplegrowingbusiness-

es.We’dlovetoseemoreofthat,whichwould

helptheeconomyandthebankingindustry.”

“Nevadabanksareamongthebestcapi-

talizedinthenationbecauseofrequirements

puton those thathavesurvived through the

financialcrisis,”saidBurns.“Theyareincreas-

ingloangrowth,theaveragewas11percentin

2013,whichiswellabovethe4percentaver-

agenetloangrowthnationwide.Thereisre-

coverygoingon.Asbanksgobacktolending

andprovidingnewservice lines, theirprofit-

abilityimproves.”

“Banks are much more cautious about

lending,”saidSullivan.Thedayswhenbanks

would lend 80 percent of appraised value,

assuming the values would increase by 10

percent ormore per year, are gone, as are

practiceslikelendingonpropertiesthatdon’t

producecashflow,likespeculativecommer-

cialbuildingsandrawland.

“Yes,thereareopportunitiesbutthereal-

ityisthere’salotofcompetitionfromalotof

sources,”saidHendricks.“Competitionfrom

traditionalbanksandalternativelenders.”

“The basic principles of banking always

apply,”saidGalloway.

Feature Story

26 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

rofit and loss statements are a great tool to monitor the profitability and health of a company. At first glance they seem fairly simple; however, there are some important things to remember when work-

ing with these statements. There is real life, and there are taxes. They look alike but one is an orange and the other is a tangerine. The profit and loss statement typically looks at a company’s profitability from a tax perspective. Therefore, there are some important things to keep in mind when taking a brief analysis of the profit and loss statement. First, there is the income section. From a tax perspective, this is what is taxable and what is not. Obviously, any sales or fees charged are considered income. Money put into the company from owners’ contributions or borrowed money is not considered income. This is a common mistake that many new businesses make; counting capital contribution as income. Another common misconception occurs when looking at money that came in and then went directly out to a particular expense. Many assume that money is not taxed, justifying that, “I broke even, so I don’t need to report it.” All money from sales or fees charged is considered income; the money paid out is an expense. What is not taxed are owner contributions, sale of stock to shareholders and borrowed money for equipment for future growth and expenses. Second on a profit and loss statement is the cost of goods section. This section shows what it costs to provide the ser-vice or to purchase/make the product sold. If the company is a manufacturing company, the cost of the materials, labor, shipping and such would be included as the cost of goods. The third section includes expenses. There are two basic types of expenses, real and phantom. The best example of a real expense would be utility bills, payroll or any other type of expense that does not build the asset side of the balance sheet. Phantom expenses are expenses such as depreciation. Depreciation is not an expense that comes out of the bank account. Rather, it is an expense that is taken over time for an asset purchased, such as a computer. Some expenses are a hybrid of real and phantom. An ex-ample would be a mortgage payment on a piece of property. The tax expense would be the interest deduction, the phan-tom expense would be the depreciation and the principal

payment goes to the balance sheet to lower the liability. From a real life point of view, the mortgage payment is an expense. From a tax point of view, it is split. The profit and loss statement serves mainly as a snapshot of where the company stands from a tax point of view. When the profit and loss statement as a whole, it is important to have an understanding of and pay attention to ratios on the statement. For example, a wholesaler’s cost of goods would generally run between 45 to 55 percent of the total sales. Any deviation from that should be explainable through the inventory values on the balance sheet. If the inventory values remain the same and the cost of goods is higher, it’s time to begin asking questions to account for the difference. The ratios are different for each industry and can also assist the Internal Revenue Service determine if an audit is needed. Another useful aspect of profit and loss ratios is that they help company managers make more informed decisions. For example: If the rents are running around 20 percent of the gross income; are there any steps to get that particular ex-pense under control? The Internal Revenue Service has in-dustry standard ratios as a guideline and any deviation above the norm triggers an audit. This doesn’t mean you will not be entitled to the deduction; they will just want to take a look at it for accuracy. The last thing to consider is how the report is calculated: cash or accrual basis? Cash basis income is reported when re-ceived, and expenses are reported when paid. All individuals and sole proprietors report on a cash basis and it’s the easiest way to look at the profit and loss statement. It also gives a pretty good picture of where the company stands on a par-ticular date. An accrual basis reporting reports the income when billed and expenses when occurred. The accrual basis makes the tax return a little more complex. The accrual basis report gives a better understanding of what the companies short term future looks like since all the income expected and all the expenses expected are on the report. Profit and loss statements appear, on the surface, to be a simple overview of a company’s financial story however, a closer look reveals that these statements are very complex. When read correctly they can be an asset for any business in determining the financial future.

P

Profit & Loss

PROFIT AND LOSS STATEMENTSBy Al Wagner, President, Trinity Tax Consultants, Inc.SOUNDSSIMPLE.ISIT?

27FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

Las Vegas Named Among Top 10 Housing Markets in the Country

According to data compiled by HomeVestors and Local Market Monitor, Las Vegas is among the top 10 housing markets in the country for investing in single family homes. According to Local Market Monitor’s president, Ingo Winzer, job growth, particularly in lower paying jobs, population growth and low home prices are factors that have made investments in single homes as rental properties attractive to investors.

UNR’s Colleges of Business and Education Ranked Top Online Graduate Programs

The University of Nevada, Reno’s Col-lege of Business and College of Educa-tion both received recognition from the U.S. News & World Report ranking them among the top 100 schools in the country. The College of Business’s online gradu-ate program was ranked 75th in its cat-egory. The College of Education’s online graduate program was ranked 36th in its category.

Sunrise Health Hospitals and H2U Partner to Open Health Centers for Employees

Sunrise Health Hospitals and Health to You (H2U) have partnered to open three H2U health centers for hospital employee and dependents, approximately 8,855 individuals. MountainView and Southern Hills centers opened in Janu-ary with the final clinic at the Sunrise and Sunrise Children’s Hospital campus set to open in March.

Around the State

28 NEVADA BUSINESS MAGAZINE FEBRUARY 2014

Gregory

DeSartGeotechnical & Environmental Services, Inc.

BUILDINGNEVADA

29FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

BACK TOBASICS

By Jeanne Lauf Walpole

ARCHITECTSANDENGINEERSINNEVADA

Itmaynotusher in theboomingeconomy

thatNevadanswerebaskinginjustashort

decade ago, but architects and engineers

around theSilverState say they expect to

seetheappearanceofalightattheendof

therecessiontunnelthisyear.“Theoutlook

looksquitegood.Therewasalmostastopin

commercialconstructionandwe’reseeingit

pickupinalmosteveryaspect,”saysRobert

Finnegan, president of Finnegan Erickson

AssociatesinLasVegas.“Peoplearedoing

morespecificspaces.Also,theresortsare

doingvery largeremodels.”Asthetourism

markethasembracedoverallentertainment

coupled with the ubiquitous gambling, re-

sortshavehadtorespondtothisexpecta-

tionbyaddingmoreoptionssuchasspas,

retailshoppingandupdatedrestaurants.To

keepupwiththefiercecompetitionresorts

mustconstantlyupgradetomaintainthere-

quiredfreshlook.

CraigGalati, principal andpresidentof

LucchesiGalatiArchitects(LGA),sayshis

firmexperiencedsomewhatofarecovery

in 2013 and he expects that to continue

this year. “We’ve seen an increase in in-

quiries.Wehaveasix-monthbacklog,”he

explains.

Changeisintheairforrecessionsurvivors

becausetheymightbemorelikelytobelieve

someofthepositiveeconomicfiguresnow

being bandied about. “We keep hearing

newsthattheeconomyisbetter,”saysGreg

Erny of Architects+ in Reno. “Despite the

positive indicators thatmight be out there

though,everybodyisstillverycautious.”

Changemay also be in the air because

peoplehavebecomeusedtoaneconomic

situationthatisfarremovedfromtheyears

of explosive growth in Nevada. “A lot of

times recessions happen because people

pull back,”Galati says. “Thingsare known

now. People have figured out how to deal

withthings.”

Positive Indicators The Reno/Sparks NAI Industrial Market

Report for the fourth quarter of 2013 has

certainlyputsmilesonmanybusinessfaces

byreportingavacancyrateof9.1percentfor

theNorthernNevadaindustrialmarket.This

isthefirstquartertheratehasbeenbelow10

percentsince2008.Rateswellinexcessof

10percentwerecommonduringthedown-

turn.The reportalsoshowsgrossabsorp-

tionof1,668,673squarefeet,netabsorption

of1,449,351squarefeetwith41transactions

representinga16percentincreaseoverthe

five-yearaverage.

The news from Southern Nevada is

similarlyencouragingwithreportsfromthe

UniversityofNevada,LasVegas’sCenterfor

Business&EconomicResearchforecasting

that unemployment numbers will continue

to drop and revenueswill go up this year.

Building Nevada

Robert

FinneganFinnegan Erickson Associates

30 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

Although Nevada’s unemployment rate is

stillhighwhencomparedtootherstates,it’s

expected todip to 6.9percentby the end

of thisyear.Visitorvolume inClarkCounty

isexpectedtoreach43.7millionandgross

gaming revenues are projected to top out

at 9.8 billion this year. The county is also

expected to add around 1,600 additional

hotelroomsthisyear.

Although many building professionals

believeacornerisbeingturned,theydon’t

expecttheskylineoverNevadatobepep-

peredwithdozensofcranesperchedatthe

sitesofbrandnewhighrisesanytimesoon.

“There are renovations, demolitions and

upgradeswithlessnewconstruction,”says

KurtGoebel,seniorvicepresidentandenvi-

ronmentaldivisionmanagerinLasVegasfor

ConverseConsultants.

Therecoveryappearstobesomewhatbi-

ased,atleastfornow,onupgradesofexist-

ingpropertiesratherthannewconstruction

fromthegroundup.“Ownersaresayingthey

putoffdoinganythingandnowtheyhaveto

dosomethingtomeetnewlevels.It’sareal

healthycompetition,”Finnegansays.

WithofficesinReno,ElkoandClarkCoun-

ty, Converse has found work all over the

stateincludingthefollowingprojects:

•Sparks—Brownsfields community-wide

site assessment for hazardous sub-

stancesandpetroleumsites;

•Lyon County—EPA brownsfields com-

munity-wide assessment for petro-

leumproductsites;

•ClarkCounty—Asbestos,leadandmate-

rials surveyof theClarkCountyDe-

tentionCenter

•City of North Las Vegas—West Side

School rehabilitation and abatement

project design and asbestos abate-

mentoversightand;

•Henderson—Materials testing and in-

spectionservices forconstructionof

FedExGround.

Other construction projects that are ex-

pectedtoprovideworkincludetheShopsat

Summerlin,Bill’sGamblin’Hall(formerlythe

BarbaryCoast),ResortsWorld(formerlyEch-

elonPlace)andtheUnionVillageinSouthern

Nevadaalongwiththe$50-millionrenovation

ofJohnAscuaga’sNuggetinSparks.

So far the work seems to be coming in

from both public and private sources, ac-

cording to the engineers and architects.

“We do a fair amount of public work and

alsosomeprivatework,”Galatisays.“Most

oftheprivateistenantimprovements.”

Typicalof theprivatework is Investment

CounselCompany’s recent renovationand

expansion in Las Vegas. “We just finished

theirspace.Theytookanother4,000square

feetanddidaremodelonthewholespace,”

Galatisays.Hisfirmisalsoworkingonanew

15,000-square-footparishcenterforSt.An-

thonyofPaduaCatholicChurch.

Some new private construction indi-

cates a revival in the interest for retire-

menthousing. “We’reworkingona400-

unit luxuryadulthighriseinHenderson,”

Finnegan says. “We’re really bullish on

this. Housing is the reason. There are

more things todohere [inSouthernNe-

vada]andit’seasiertogetaroundthanin

Phoenix,” he says. Finnegan is happy to

reportthatthe30+employeesinhiscom-

pany are busy withmore than 100 proj-

ectsonthebooks.

“Owners are saying they put off doing anything and now they have to do something

to meet new levels. It’s a real healthy competition.”

—Robert Finnegan

The Grand Bazaar Shops by Juno Property Group

31FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

Building Nevada One of the best indicators of a turn-

around incommercialconstruction is that

many engineering and architectural firms

are in a hiring phase for the first time in

years.Theysaytheamountofworkcom-

inginnowwillsupportadditionalworkers.

ConverseConsultantsdropped to20em-

ployees from a high of 50, but is looking

to fill twomorepositions.Geotechnical &

EnvironmentalServices,Inc.isdownto32

workers from a high of around 60, but is

lookingtohiremore,accordingtoGregory

DeSart,presidentofGeotechnical.

Partoftheproblemofbalancingthenum-

berofemployeeswith theamountofwork

is the loss of workers that came with the

recession.Ernyexperienced theexodusof

architects from the state in hispositionas

chairmanoftheNevadaStateBoardofAr-

chitecture.“We’veseenasignificantlossof

licensed architects, but it’s coming back,”

hesays.DeSartjusthopestofindqualified

people for his open positions. “The talent

justleftwiththejobs.There’sstillashortage

ofgoodengineers,”hesays.

The Future As they contemplate the future with re-

newed optimism, architects and engineers

hope that the current uptick will lead to

continuedgrowthaswegoforward.“Inmy

opinionthere’sastrongdegreeofpsychol-

ogyandthere’smoreconcreteenergy.Peo-

plegettiredofnegativityandwanttocreate

theirownreality.It’ssomewhatofasnowball

effect.There’smorediscussionaboutposi-

tivethings,”Goebelsays.

Italsoseemsthattheenthusiasmandbe-

liefinthefutureofNevadaisback,although

maybenotatquitethesamefeveredpitchas

duringtheboomyears.“IstillthinkNevada

hasa tremendousamountofpotentialand

untappedresources.There’smorediversity

thanwhatwerealize.This isacritical time

andwehavetomakesureNevadaremainsa

destinationstate,”Goebelsays.

Construction professionals point out a

numberofspecificindustriesthatcanbeuti-

lizedtocreategreaterdiversityandgrowth.

Theseincludemedicaltourism,hightech,al-

ternativeenergy, retirementhousing,manu-

facturinganddistributionalongwiththetra-

ditionalpillarsofgamingandtourism.DeSart

believesthattheconstructionofInterstate11,

whichisintheplanningstages,willbeofbig

benefittothestatebyconnectingPhoenixto

LasVegasstartingattheMexicanborderand

continuingontoCanada.“Thisroadwillbe

hugeforusinthefuture,”hesays.

Erny expresses concerns about the

threat of government regulation and the

continued scarcity of investment dollars

that could jeopardize economic growth.

FormanyyearsNevadahasbenefitedfrom

the flight ofbusinesses fromoverly taxed

andregulatedCalifornia.“Ibelievethemar-

ketshouldseek itsownlevelandthe less

governmentthebetter,”hesays.

Lessons Learned Galatiacknowledgesthatduringtheboom

yearsmostbusinesseswerefatandhappy.

Timesaredefinitelydifferentnow,however,

and a noticeable learning curve is in place

regardingpriorattitudes.“Idon’t thinkwe’ll

everthrowcautiontothewindandsaythat

we’rerecession-proof,”Goebelsays.Inaddi-

tiontoemployingamorecautiousapproach

to their projects, construction profession-

alssay theyare trying toworksmarterand

withgreaterefficiencies.“Wearemuchmore

awareofhowwespendourmoney.Welook

atevery level toget thebestvalue,butnot

necessarilythecheapest,”DeSartsays.

“Thequalitypieceisevenmoreimportant.

Weareawareofneedingtogivehypergood

servicetoourclients,”DeSartadded.

Despitetheroughroadstraveledinrecent

years,architectsandengineerssaythatthe

lightsarestillburningbrightlyinNevadaand,

attheendoftheday,thecharacteristicsthat

madeitadestinationformanywillcontinue

toservethestatewellinthefuture.

“One of the most important things is

that as businesseswe support eachother

and keep common sense as a core value.

Weneed to rememberour rootsandwhat

makesusunique,”Goebelsays.

Craig

GalatiLucchesi Galati Architects

SAY WHAT

According to a recent Rasmussen Report survey of 1,000 likely voters, 58 percent of respondents said that the cost of healthcare will rise under the new law. Additionally, 26 percent believe the quality of care will get better under the new law and 74 percent said it was at least somewhat likely that the new law will cost more than first estimated.

32 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

Lease, RetailADDRESS1381W.SunsetRd.,89014TENANTCaféZupasLANDLORD RemingtonCommercial1.LLCDETAILS3,720SF;$1,013,886for10yearsTENANT’S REPJasonOtterandBrendanKeatingofTheEquityGroupLANDLORD’S REPStanWasserkrug,IntercapitalAssetManagement

Lease, RetailADDRESS2556WigwamPkwy.,89074TENANT24HourFitnessUSA,Inc.LANDLORDCentraPecosLegacy,LLCDETAILS42,010SF;$2,520,600forfiveyearsLANDLORD’S REPScotMakerofColliersInternational

N

Sale, RetailADDRESSRanchoVerdeApartmentsParcel3,89106BUYERMadisonDevelopmentGroup,LLCSELLERRanchoVerdeApartments,LLCDETAILS1.2acres;$850,000APN139-28-402-004BUYER’S REPDanHubbardofCushman&WakefieldCommerceSELLER’S REPClarkCountyDevelopmentUSA,LLC

NW

Project, Vacant LandADDRESSHuckleberryPark,NorthwestLasVegasDEVELOPERFocusPropertyGroupDETAILSTheProvidencemasterplannedcommunitybrokegroundforitsthirdpark.HuckleberryParkwilljoinThePromenadeandKnickerbockerParkinnorthwestLasVegas,covering1,200acres.HuckleberryParkwillfeatureaneventsfield,outdoorstagearea,dogparksofvarioussizes,sportsandplayareaswithadditionalroomforfuturedevelopments.The$2millionprojectisbeingbuiltinsuchawaythatitwillprotectthenaturalenvironmentwhileofferingresidentsampleoptionsforfitnessandoutdoorrecreation.Theparkisscheduledtoopeninlate2014.

Loan, Multi-FamilyADDRESS2316SpringGroveDr.,89108TENANTTerraceCourtDETAILS68units;$3.9millionrefinanceforfiveyears,30yearamortizationTENANT’S REP ThomasJ.PowellandMichaelDobinsofNorthMarq

H

Sale, OfficeADDRESS3039W.HorizonRidgePkwy,89052BUYERDenco,LLCSELLERVantageatHorizonRidge,LLCDETAILS6,754SF;$1,725,000APN177-35-510-029BUYER’S REPWilliamSkupaandGinoVincentofMINTPropertyGroup,Ltd.SELLER’S REPJosephDeSimoneofFirstFederalRealtyDesimone

Sale, Vacant LandADDRESSStephanieSt.andWigwamPkwy.89074BUYERLVCSDSaddleLLCSELLERWGStephanieLLCDETAILS4.61acres;$1.5millionAPN178-15-310-011BUYER’S REPBrianSorrentinoofROICommercialRealEstateSELLER’S REPCathyJonesandPaulMiachikaofSunCommercialRealEstate,Inc.

Sale, IndustrialADDRESS151GallagherCrestRd.,89074BUYERDesignsforHealth,Inc.SELLERSuperBrands,LLCDETAILS42,292SF;$3.3millionAPN178-15-510-003BUYER’S REPDeanWillmore,SIORofcolliersInternationalSELLER’S REPBenMillisofNewmarkGrubbKnightFrank

Lease, OfficeADDRESS2340CorporateCircle,89074TENANTQuestSoftware,Inc.LANDLORDTechPark6,LLCDETAILS7,800SF;$975,294forfiveyearsTENANT’S REPAmericanNevadaRealtyLANDLORD’S REPTaberThillofColliersInternational

O

Sale, Multi-FamilyADDRESS3665NeedlesHwy,Laughlin89029BUYEROmninentCrown,LPSELLERConAmGroupDETAILS536units;$12.9millionAPN264-28-211-001

S

Project, RetailADDRESS325ConventionDr.,89109DETAILSTheLasVegasMarriotthascompletedits$4.3millionprojectupdatingthehotel.Theguestroomrenovationsincludednewlocksystems,in-roomsafesandadditionaloutlets.Furniture,lightinganddécorhavealsobeenupdated.Additionally,theLasVegasMarriottadded600SFofnewmeetingspacetoitssecondfloor.Laterthisyear,allotherexistingmeetingspaceswillundergorenovations.

Project, RetailADDRESSLasVegasBlvd.andFlamingoRd.,89109DETAILSTheGrandBazaarShops,scheduledtoopeninFall2014,willfeaturecloseto55,000SFofoutdoorshopping,restaurantsandentertainmentrightattheheartoftheLasVegasStrip.PioneeredbyLaurenceSiegelofJunoPropertyGroup,theconceptwasinspiredbythevariousopen-airmarketsfromaroundtheworld.OtherpartnersofthisprojectarePerellaWeinbergPartnersAssetBasedValueStrategy,GlimcherCapitalGroupandCaesarsEntertainment.TheGrandBazaarShopswillfeatureover150shops.

Sale, Multi-FamilyADDRESS10200GilesSt.,89183BUYERThePraediumGroupSELLERLVPYLELLCDETAILS320units;$41.9millionAPN177-28-301-022BUYER’S REPCBRichardEllisSELLER’S REPHendricks-Berkadia

Sale, RetailADDRESSTropicanaCentreat3035to3375E.TropicanaAve.,89121BUYERArilexTropicanaAssociatesLLCSELLERGreggWilliamsDETAILS589,191SF;$39.8millionAPN162-25-501-008SELLER’S REPJoeBonifattoandFrankMarrettiofColliersInternational

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

DEAL TRACKER

33FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

89166

89149

89129

89134

8914489138 89128 89108

89131

89130

89085 89087

89165

89115

89156

8911089101

89104 89142

89122

8901189014

89074 89015

89002

89005

89012

89052

89044

89084

89031

89032

89030

89081

89086

89143

89145

89117 89146

8910

2

8918

389

109

89147 89103

89118 8911989120

89121

8913989139

89141

89178

89179

89161

8913

5

8914

8

8914

8

89107 8910

6

N

NW

SW

H

BC

E

N

S

Lease, RetailADDRESS2880BMeadeAve,Suite360,89102TENANTVeriFoneInc.LANDLORDEdenLasVegas,LLCDETAILS6,226SSF;$180,456for2yearsLANDLORD’SREPLeoBiedermannofCushman&WakefieldCommerce

Lease, RetailADDRESS6344W.SaharaAve.,89146TENANTInternationalChurchofTheFourSquareGospelLANDLORDWestSaharaAssociatesDETAILS16,400SF;$488,392for5yearsLANDLORD’SREPJosephAndersonandNeilDelaCruzofMDLGroup

WC

Sale, RetailADDRESSSparksGalleriaShoppingCenter89436BUYERPineTreeCommercialRealty

DETAILS633,498SF;$26.2millionBUYER’SREPMichaelCleemanofCohenRealEstateSELLER’SREPRickKaiserofCohenRealEstate

Sale, IndustrialADDRESS400WesternRd.,Reno,89506BUYERECOWindowsSELLERHawleyTrustDETAILS61,152SF;$1,750,000APN082-600-04BUYER’SREPDanOster,SIORofNAIAllianceSELLER’SREPDaveSimonsen,SIOR,CCIMandJ.MichaelHoeck,SIORofNAIAllianceIndustrialProperties

Sale, IndustrialADDRESS7788WhiteFirSt.,Reno,89523BUYERAJRocket,LLCSELLERF&JPropertiesLLC.DETAILS2.056acresand11,000SF;$1.8millionAPN212-050-19SELLER’SREPScottShanks,SIORandDominicBrunetti,CCIMofNAIOfficePropertiesGroup

Lease, IndustrialADDRESS3132-3152HighlandAve.,89109TENANT3152HighlandDrive,LLCLANDLORDHughesFamilyLLC&CouryFamilyLLCDETAILS47,656SF;$805,000forthreeyearsTENANT’S REPCurtisBunceofDiversifiedRealtyGroupLANDLORD’S REPAmyOgdenandDanielleSteffenofCushman&WakefieldCommerce

SW

Sale, IndustrialADDRESS4325W.PatrickLn.,89118BUYERVegasCloseoutsLLCSELLERLeumiB,LLCDETAILS7,104SF;$625,000APN162-31-712-000BUYER’SREPJamesGriffisofMDLGroupSELLER’SREPEricLarkinofMusserCapitalRealEstateAdvisors

Red Report

34 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

rials.Allcommunicationmodesshouldbe

managedsothebrandstaysintact.

“Youhavetoprotectyourbrand,and

youhavetoholditaboveallelse,”Kirvin

said. “Sometimes that means making

hard decisions. Sometimes that means

sayingno,inourcase,partingwayswith

clients who don’t fit. Sometimes that

means really recognizing who you are

not.”

It helps to have someone internally

who oversees the brand daily,monitoring

andensuringit’sbeingmaintainedandad-

dressinganyrelatedissues.

Don’t Damagethe Brand ... “If there is an employee not living

the brand or if someone tries to use or

change your logo, that’s addressed im-

mediately,”saidNeighbors.

thebrand.Tellthemhowtoincorporatethe

brand into theirwork daily. Consider cre-

ating a guide that specifies the pertinent

dosanddon’ts.Forexample,for individu-

alsprovidingcustomerserviceviaphone,

detailwhatthebrandvoiceshouldbeand

howtheyshouldrespondtocommoncus-

tomerquestions,problemsorstatements.

Also, ensure the brand is reflected in

corporatepoliciesandproceduresinterms

of hiring, job descriptions, expectations,

client interactions, compensation, perfor-

mancereviewsandthelike.Havefrequent

conversations with employees about the

company’svaluesandbrand.

“Everyone has to knowwhat the end-

gameis,whattheultimategoalis.Youhave

tohaveacommitment,”saidDarcyNeigh-

bors, founder andCEOofCIMMarketing

Partners and author of the book, “Mar-

keting Fusion: 7 Elements to Ignite Your

Growth.”CIM is a Las Vegas-basedmar-

keting,advertisingandpublicrelationsfirm

that focuses on the professional services

industry.

Next is creative implementation of the

brand. This is where the logo and other

suchelementsthatportraythebrand—tag-

line,colorscheme,jingleandmore—come

intoplay.Theseareusedtoevokethebrand

feeling intargetaudiences.Otherexternal

communications—marketing,socialmedia,

advertisingandpublic relations—canhelp

portraythebrandandsolidifyitsposition.

A business’ employees, from theCEO

to the janitor, should live andbreathe the

brandalways,asbrandscan take time to

developandrequireregularsupporttotake

hold.Abrandshouldbecommunicatedin

everyaspectofoperations,fromstaffinter-

actionswithclientsandsocialmediames-

sagestocustomerserviceandprintmate-

Cover Story BRANDING YOUR COMPANY

CONTINUED FROM PAGE 11

CallKendleKendle Walters, vice president of Nevada Business Magazine, can help younavigate branding, marketing and image-building for your company. With aMasters in Media Studies, Kendle has over 10 years of marketing experienceand is more than qualified to assist in taking your business to the next level.

YOUR MARKETING RESOURCE

Contact Kendle702.267.6328 orkendle@nevadabusiness.com

35FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

Cover Story

If a brand is not being routinely de-

liveredupon,itcansendmixedmessag-

es. This creates confusion in theminds

of potential and current customerswho

couldthenruntoacompetitor.Thesay-

inggoes,“aminuteonthelips,foreveron

thehips.”Brandsaredamaged inmuch

the same way; it can happen rapidly,

muchquicker than it took toestablish it

andcantakealongtimetorepair,ifitcan

berepairedatall.

“Whenpeoplegetawayfromaconsis-

tentbrand,itbecomesverydilutedandnot

synchronized,” Neighbors added. “That’s

whenthingsfallapart.”

Ideally,anestablished,triedandtested

brand is preferred before a crisis arises,

whichcanrangefromadisgruntledpatron

to a defective product. Further, generally,

avoidrebrandingormodifyingabrandmid-

crisis,asittypicallydoesn’twork.Rareex-

ceptionsexist,ofcourse,whereit’seffec-

ness,attitudesandpropensitytobuy,with

respect to company andproducts/servic-

es,haschanged.Ifabrandisn’tachieving

requiredobjectives,simplyadjustit.

“Mostofthetimeitisworking.[Theorga-

nizations]arejustnottrackingit,”saidBelz.

Brands are only as effective as the or-

ganizationthat isadministiringthem.With

therightplanningandresearchatthebegin-

ning, implementation and follow-through a

brandisoneofthebestandmosttried-and-

truemethodsofacompany’ssuccess.

SAY WHAT

The “Welcome to Fabulous Las Vegas” sign is now powered by solar energy. The effort to install three solar trees with a total of 18 photovoltaic cells to exclusively power the sign was led by Green Chips and the Clean Energy Project.

tive to, say, announce new management,

new approaches and/or a new brand.

Those cases tend to be successful when

theexistingbrandisseverelydamagedor

off-base.

Howacrisis ishandledcan reveal the

company’s brand, so stay true to it dur-

ing thatphase.Additionally,when insuch

asituation,ensureallemployeeshavethe

keymessagingpointsandknowthestory.

Otherwise,disseminationofconflictingin-

formationcouldcreateabranddisasteron

topoftheoriginalproblem.

After a brand has been in place for a

while, periodically measure its effective-

nesstodeterminethebrandismakingthe

desiredimpact.Mostoftencompaniessee

positive results from a branding program

prettyquickly.Analyzesalesorotherper-

formance indicators or survey the public

and/or customers to havean ideaof how

thebrandisworking.Learniftheiraware-

www.christuckerlv.com | 702.501.6879

DESIGNMODERN

LOGO | CORPORATE | AD DESIGN

36 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

Afterarecordbreakingthirdquarter,vi-

brantactivitycarriedintothefourthquarter

resulting in very strong numbers and an-

othersignificantdrop invacancy.Theyear

beganwithvacancyabove13.5percentand

again this quarter, landlord’s prayerswere

answeredandthevacancyratedroppedbe-

low10percentforthefirsttimesincethe1st

quarterof2008.Themarket issquarely in

thehealthyrangeat8.11percentexcluding

subleasespace.Neverless,itwillbedifficult

tocarrythismomentumduetolowavailabil-

ityhowever,allsignsarebullish.

For the year, fifteen transactionswere

completedwithusersinexcessof100,000

square feet. This number is significantly

higher than prior years. A total 48 trans-

actionswerecompletedinQ42013witha

grossabsorptionof1,638,272square feet

almost150percentofthefiveyearaverage

and almost double last year. The average

transactionsizewasdownslightlyfromQ3

butarespectable40,000squarefeet.

Netabsorptionforthequarterwasaro-

bust1,607,714square feet,5 timeshigher

than 2012. Rental rates are beginning to

seeupwardpressurerisinganaverage$.01

persquarefootpermonthinthelastquar-

ter.Thishascertainlybeenan impressive

yearoverallwith a return to respectability

andprosperity.

Barring any economic blindside, the

yearshouldseecontinuedstrongactivity,

lowervacancy,higherrentsandmorecon-

struction than has been seen since 2007.

With an abundant pool of investors now

lookingatRenoasanalternativetohigher

pricedmarketsthetimeisnowtodispose

ofassetsshouldonewanttoplacetheiras-

setsinotherareas.

In2013,theLasVegasindustrialmarket

reported the highest net absorption since

2007. The vacancy rate at theendof 2013

was 13.8 percent, which represents a de-

cline of 0.4 percent from the prior quarter.

Comparedtoayearago(Q42012),theva-

cancyratereportedanevenmoresubstan-

tialdeclineof2.6percent.Withnocomple-

tionsduringthefourthquarter,inventoryre-

mainedflatat107.5millionsquarefeetwhen

comparedtothethirdquarterof2013.How-

ever,duringtheyear,approximately934,000

squarefeetwasaddedtothemarket,which

ismorethan2010,2011and2012combined.

The industrial sector reported approxi-

mately 398,200 square feet of positive net

absorptionduringthefourthquarterof2013.

Netabsorptionfortheyearwasover3.6mil-

lionsquarefeet,whichissignificantlyhigher

thantheroughly897,100squarefeetofnet

move-insreportedin2012.

Theamountof industrialspaceactively

under construction reached 1.2 million by

thecloseofthefourthquarterof2013,which

is the highest it has been since the third

quarterof2008.Anumberofprojectscon-

tinuedtomakeprogressduringthequarter,

includingFedExatSouth15AirportCenter

(296,000 square feet), Konami Gaming’s

expansion (193,400 square feet), Nicholas

& Company (182,900 square feet), VadaT-

ech (70,000 square feet) and the Shetakis

Wholesalersaddition(65,600squarefeet).

The industrial sector is now reporting

overonemillionsquarefeetofdevelopment

activityforthefirsttimesincethethirdquar-

ter of 2008. There are relatively few large

propertiesleftonthemarket,whichisprov-

ingtobeachallengeforselectedcompanies

consideringlargeinvestmentsinthearea.

Commercial RE Report

INDUSTRIALSUMMARYFOURTHQUARTER2013

SOUTHERN NEVADA NORTHERN NEVADA

37FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

he“third”estimate for thirdquarter2013showsU.S.realgrossdomesticproductincreasingatanannualizedrateof4.1percent,animprovementoverthe3.6percentgrowthreported

inthe“second”estimate.Higher levelsofper-sonal consumption expenditures and nonresi-dential fixed investment were responsible fortheupwardrevision.Residentialinvestment,netexports,andstateandlocalgovernmentspend-ing also made positive contributions. Federalgovernmentspendingmadenegativecontribu-tions.Housingstartswereupsubstantiallyyear-over-year,andhousingpricescontinuedtorise.Auto/trucksalesand retail saleswerealsoupyear-over-year.Consumerconfidenceandcon-sumersentimentroseforthemostrecentdata. The Nevada economy evidenced mostlypositivesignalsforthemostrecentdata.Sea-sonally adjusted, statewide employment in-creasedby9,500jobsfromOctobertoDecem-ber, and itwas up 1.8 percent year-over-year.Taxablesalescontinuedtoshowstronggrowth,up6.2percentfromlastyear.Totalairpassen-gerswere up 0.7 percent over the same timeperiod.Gamingrevenuealsoexperiencedgainsforthemonth,up11.9percentfromNovember2012. ForClarkCounty,seasonallyadjustedem-ployment rose from October to November by4,900 jobsandwasup2.4percent year-over-year. Total passengers at McCarran Airportwere up 1.1 percent from a year earlier. No-vembervisitorvolumewasup4.4percentfromayearago.Gamingrevenuewas12.7percenthigher in November than a year earlier. ClarkCounty’s taxable sales for October were 8.3percentabove those fromayearearlier.Resi-dential construction permits increased fromSeptember toOctober.Commercial construc-tionpermitsremainedatalowlevel. ThemostrecentdatashowmostlypositivesignalsforWashoeCountyaswell.Seasonallyadjusted,Reno-Sparks’employmentincreasedby1,000jobsfromOctobertoNovember.Totalemploymentisupfromayearago,by0.9per-cent. The seasonally adjusted Reno-Sparks’unemploymentratefellfrom9.2percentto9.0percent.Comparedtoayearearlier,Novembervisitorvolumewasup9.6percent.Totalairpas-sengersweredown5.3percent fromOctober2012.GamingrevenuesforNovemberwereup14.7percentfromayearearlier.Residentialcon-structionpermitsfellinOctober,whilecommer-cialconstructionpermitsremainedlow. TheU.S.economyexperiencedapickupingrowth for thirdquarter2013.Aweaknationaleconomy is affecting Nevada in the form ofslowinggrowthintourism.Despitetheslowingtourism, taxablesalescontinue tomakegainsatthestatelevel.Nevada’semploymentisalsoshowingrelativelystableyear-over-yeargains.

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.

*Change in percentage rate, **Reflects the Reno-Sparks MSA which includes Washoe and Storey Counties, ***Recent growth is an annulized rate

Ryan T. KennellyUNLV Center for Business

and Economic Research

GROWTH

DATE LATESTUNITS PREVIOUS YEAR AGO RECENT YEAR AGO COMMENTS

1,175.8

9.0

3.894

875.97

4.044

92.55

4.368

850.5

9.2

2.876

756.95

637

33

3.727

63.13

3.472

193.8

9.0

0.508

59.47

63

18

0.262

13.79

0.321

136.877

6.7

233.9

235.2

118.4

106.2

432.3

16.31

1.091

15,839.3

102.202

-34.252

1,848.36

-2.83

2.65

1,166.3

9.3

4.071

955.33

3.805

90.60

4.619

845.6

9.2

2.976

839.75

569

42

3.473

61.51

3.736

192.8

9.2

0.541

59.79

176

23

0.284

13.84

0.370

136.803

7.0

233.8

234.9

118.0

105.7

429.4

15.15

0.889

15,679.7

101.812

-39.328

1805.81

-2.95

2.57

1,154.5

10.0

3.667

782.63

4.015

93.26

4.463

830.3

10.2

2.656

671.61

595

14

3.687

64.04

3.325

192.0

10.0

0.465

51.85

60

20

0.277

13.95

0.293

134.691

7.9

231.1

231.3

116.3

105.6

412.9

15.26

0.842

15,534.0

99.025

-46.422

1426.19

-3.01

1.56

0.8%

-0.3%

-4.4%

-8.3%

6.3%

2.2%

-5.4%

0.6%

0.0%

-3.4%

-9.9%

12.0%

-21.4%

7.3%

2.6%

-7.1%

0.5%

-0.2%

-6.2%

-0.5%

-64.2%

-21.7%

-7.4%

-0.4%

-13.3%

0.1%

-0.3%

0.0%

0.2%

0.3%

0.4%

0.7%

7.7%

22.7%

4.1%

0.4%

-12.9%

2.4%

0.12%

0.08%

1.8%

-1.0%

6.2%

11.9%

0.7%

-0.8%

-2.1%

2.4%

-1.0%

8.3%

12.7%

7.1%

135.7%

1.1%

-1.4%

4.4%

0.9%

-1.0%

9.2%

14.7%

5.0%

-10.0%

-5.3%

-1.1%

9.6%

1.6%

-1.2%

1.2%

1.7%

1.8%

0.5%

4.7%

6.9%

29.6%

2.0%

3.2%

-26.2%

29.6%

0.18%

1.09%

Up Over Year Ago

Reduced

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Down from Year Ago

Down from Year Ago

Up Over Year Ago

Reduced

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Low and Volatile

Up Over Year Ago

Down from Year Ago

Up Over Year Ago

Up Over Year Ago

Reduced

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Low and Volatile

Down from Year Ago

Down from Year Ago

Up Over Year Ago

Up Moderately

Reduced

Up Moderately

Up Moderately

Up Moderately

Up Over Year Ago

Up Over Year Ago

Up Over Year Ago

Up Strongly

Up Moderately

Up Over Year Ago

Year-Over-YearDeficit Decrease

Up Strongly

Less Negative

Up Over Year Ago

000s, SA

%, SA

$billion

$million

million persons

million gallons

million persons

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

89.06=100, SA

2005=100, SA

$billion, SA

million, SA

million, SA

2009$billion, SA

97.01=100

$billion, SA

monthly close

%, NSA

%, NSA

2013M11

2013M11

2013M10

2013M11

2013M10

2013M10

2013M09

2013M11

2013M11

2013M10

2013M11

2013M10

2013M10

2013M10

2013M10

2013M11

2013M11

2013M11

2013M10

2013M11

2013M10

2013M10

2013M10

2013M10

2013M11

2013M12

2013M12

2013M11

2013M11

2013Q3

2013Q3

2013M11

2013M11

2013M11

2013Q3

2013M12

2013M11

2013M12

2013M11

2013M11

DATA

Employment

Unemployment Rate*

Taxable Sales

Gaming Revenue

Passengers

Gasoline Sales

Visitor Volume

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

38 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014

What do you enjoy most about being abusiness owner and/or executive?

“The MDL Group supports every owner, executive and employee in giving back to the community. For example, I’m serving as CALV president, which allows me to interact with all kinds of people from within and beyond the real estate industry.”

“Each day presents opportunities to serve others and to find new and innovative ways to make my clients’ visions become realities.”

“Being able to connect with and gain feedback from our customers, then take that information and use it with my own ideas to create a new concept of products and services of which all customers can then enjoy.”

“The thing I love the most about being a business owner of Hofbräuhaus Las Vegas is seeing a vision come to life. There is nothing better than knowing you are providing an authentic experience for your guests that also doubles as a passion.”

“As a mother of two small children, I love owning my own business because of the flexibility, freedom and opportunity it allows. Working hard to build and grow my own business and creating my own success is extremely fulfilling.”

Alicia R. Ashcraft | Managing Partner, Ashcraft & Barr | LLP

Jeremy Stamis | President/Director, Jerry’s Nugget Casino

Hayim Mizrachi, CCIM | President, Commercial Alliance Las Vegas and President and Principal, MDL Group

Stefan Gastager | President, Hofbräuhaus Las Vegas

Jim Brock | Founder,Simple Computer Repair

Lauren Eldik | Owner, Studio Clicks Photography

“When I have a thought or an idea about a product or service, I can put it into action without asking for permission.”

Last Word

39FEBRUARY 2014 NEVADA BUSINESS MAGAZINE

40 NEVADA BUSINESS MAGAZINE FEBRUARY 2014

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nsbank.com/SBA | 866.784.8031

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