New business grows scarce in LV Valley


The country's economic downturn hampered efforts to diversify Southern Nevada's economy in the last year.

Numbers from local agencies designed to attract new businesses to the Las Vegas Valley reported dips in the number of companies moving to the area, and recorded drops in the economic impact of corporate growth here.

The Nevada Development Authority, a nonprofit that lures companies to Las Vegas, helped bring in or expand 30 companies and 1,401 new jobs in fiscal 2007, which ended June 30. That's down from 56 companies and 2,725 new jobs in fiscal 2006.

At the city of Henderson's Division of Economic Development, the number of companies recruited or expanded stayed flat at 18, though jobs created by relocations and expansions increased from 770 to 1,190. Economic impact fell substantially, likely because the companies that moved here leased space instead of constructing new projects, said Bob Cooper, the division's head.

Officials from both groups attributed the decline in business and economic impact to the slowing economy.

"When I look at the numbers, I'm not thrilled with them," said Somer Hollingsworth, president and chief executive officer of the Nevada Development Authority. "But we ought to be happy to have even these numbers, because it's a nightmare out there. Companies are just really nervous about what the future is."

Added Cooper: "In the past year, everybody went into hiatus and tried to figure out how bad it was going to be. Certainly, you always want to exceed what you did last year, but we know we're not in total control. It's a little frustrating. You can do all this work, but people are just moving a little slower."

Where the agencies succeeded in fiscal 2007, they've targeted companies unrelated to finance and real estate. The NDA worked with GE Transportation in the spring as the company opened an 80,000-square-foot, 66-employee train-engine repair factory in North Las Vegas, and the city of Henderson scored with back-office operations, computer services and distributors.

Canadian software developer FDM4 took Henderson officials up on their pitch to open a design and support operation in April.

The 60-employee business, based in North Bay, Ontario, transferred 10 of its workers to Henderson, where it now has 7,200 square feet of space in Anthem. President Mike Cutsey said he'll hire 20 local workers in the next couple of years in positions such as sales, programming and customer support.

What drew FDM4? Despite the economy, the company's customers still need FDM4's expertise in online apparel sales, Cutsey said. And a good chunk of those clients live in California. With the U.S. dollar weakening and real estate values here dropping, spring proved the ideal time to parlay the company's Canadian dollars into housing purchases and office leases in the United States. And Nevada, with its lower taxes and easy accessibility through McCarran International Airport, allows FDM4 to access California markets with fewer expenses than it would incur if it opened inside the Golden State, Cutsey said.

"We're affected by the economy, but we're running out of space no matter what," he said. "We had to make decisions. We have to support our customers. We know the economy is going to come around eventually. It's not going to tank forever. You might as well get in while you can afford it, and get a great lease."

Both Cooper and Hollingsworth said they expect brighter futures.

Henderson officials drew up a new battle plan about eight months ago, when they foresaw today's downturn.

They retained companies that track down leads for economic development agencies, and those companies have heavily telemarketed the city. They've also led the city to recruit in new geographic areas, including the Midwest, New York, Boston and Canada. Plus, Henderson officials launched HendersonMeans Business.com to promote diversification efforts online.

The drive to make new contacts led to a trip last week to Southern California, where Cooper and other officials met with prospects, including metal manufacturers, high-tech companies and distributors. On tap are trips to San Francisco, where Cooper plans to meet with energy companies, and Toronto.

"We're not sitting back and saying, 'Woe is us,' " Cooper said. "The economy is not good and the phone is not ringing. It's incumbent on us to be creative and try new things."

Once the economy recovers, Hollingsworth said, he foresees a return to the NDA's performances before 2006, when the agency recruited 50 to 60 businesses a year. The nonprofit should be especially competitive in areas such as manufacturing and green energy, he added. He's especially excited about one prospect -- he declined to identify the industry -- that could bring as many as 1,000 jobs here.

"When we come out of the recession," he said, "I think Las Vegas will absolutely explode."

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

DEVELOPMENT DOWNTURN

The Nevada Development Authority saw a noticeable decline in the number of new and expanded businesses it assisted in the Las Vegas area in fiscal 2007.
 Fiscal 2006Fiscal 2007
New companies4327
Expansions133
Number of jobs1,4012,725
Economic impact$215.5 million$352 million

The city of Henderson’s Division of Economic Development assisted fewer businesses in relocating to the area, but the number of jobs its clients created surpassed 2006 numbers by a significant margin:
 Fiscal 2006Fiscal 2007
New companies119
Expansions79
Number of jobs7701,190
Economic impact$79.1 million$63 million

SOURCES: Nevada Development Authority, city of Henderson Division of Economic Development