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‘Drinking from the firehose’: New GOED director talks about challenges

Updated April 3, 2023 - 12:14 pm

Tom Burns described his first two months as the new executive director of the Governor’s Office of Economic Development as “drinking from a firehose.”

The relatively small office, created in 2011 by the Legislature, is focused on attracting new businesses and helping existing ones expand in an effort to develop the state’s workforce with high-paying jobs.

Burns, who started his role Jan. 30, was appointed by Gov. Joe Lombardo because of his “private sector experience and leadership in the business community,” according to a news release. Burns succeeds Michael Brown, who announced he would be stepping down after former Gov. Steve Sisolak lost his re-election bid.

It’s not the first time Burns has led a business organization in the state. He served as chair of the Vegas Chamber in 2020, a time when its members were faced with pandemic-related closures and setbacks. He’s also a certified public accountant and worked at insurance firm Cragin & Pike for 32 years, 12 of which were as its president.

In his new role, Burns is tasked with diversifying Nevada’s economy at a time when the state’s casinos are reporting record gaming win while consumers face persistent inflation.

He spoke with the Review-Journal about plans to help diversify the state’s economy. This interview has been edited for length and clarity.

Review-Journal: How has the job been since you started? Do you see your past experience helping you in your new role?

Burns: It’s drinking from the firehose — there’s a lot of things you take on in this job that come from very various disciplines and different industries. And couple that with the Legislature hitting session six days into my job, which just adds another spinning plate to my job. With Cragin & Pike, I was very active in the local business community, both from an industry standpoint, and then I was very active in local government from being in the chamber and then also getting involved in the construction industry at a pretty high level. So I served on the board of a number of local trade associations for the construction industry. That led me to having some pretty diversified views of what was going on locally. In those industries, as well as also involved on a statewide basis with the chamber.

How is the current economic state of Nevada and how would you describe its economic diversity?

Historically, Nevada had been highly, highly dependent on hospitality. Over the last 12 years or so, Northern Nevada has done a very good job of diversifying its economy. It kind of had its hospitality industry suffer a little more than Southern Nevada’s hospitality industry, and that gave rise to some necessity, as well as opportunity, on the (Interstate)-80 corridor. They have the large (Tahoe-Reno Industrial Center) that became available. Southern Nevada has lagged a little bit. Some of that is because hospitality is so dominant that it’s tougher to come off of the dependency on that. We are making strides. There’s a lot of exciting things going on right now with a lithium loop, essentially the raw material out of the ground into developing the battery into producing the electric vehicle. And ultimately, recycling it and putting it back into the environment. We are the only state in the nation that can have that conversation.

What can Nevada do to take advantage of the growing electronic vehicle sector?

Certainly producing or pursuing lithium opportunities. As far as EV batteries, having the ability to process lithium is something that we’d like to have larger conversations around (and) other clean energy solutions. One of the big challenges we have here in Southern Nevada is public lands and the amount the federal government owns. Large tracts of public land aren’t available for us to use to attract manufacturers so we’re working with our federal delegation to move forward and help us out along those ways. We have the ability to have manufacturing that takes place here that is generational. They’ve opened up a new facility for Redwood Materials in Northern Nevada and of course, they’ve had the facility for Tesla and Panasonic for a number of years. I think those are places where a grandparent can be dropping off their grandchild at that facility saying, “I used to work in that place.”

Can you explain why Nevada issues tax abatements?

We’re not the only ones going after these companies to move into their states — it’s a pretty competitive landscape out there. If you look at the tools and resources that we compete against on a regular basis — Utah, Arizona and Texas — they not only give more robust abatements away, but they have cash to give away. They have closing funds. Abatements, in our case, are a discount on future taxes. We don’t write checks to anybody. When a company moves here from another place, they incur a lot of cost to move. There’s a lot of inconvenience that goes with that, and so somebody’s going to help them with those costs. That’s the thought process there is to have those inconveniences and real expenses offset. They’re not going to pay all of their taxes for the first period of time they’re here, usually five years. But they are going to be paying some so there’s still incremental taxes to be paid.

There has been criticism over the nondisclosure agreement between the state and Tesla ahead of its approval to receive $330 million in tax abatements. What is your response?

We followed the state statutes; that’s what we’re obligated to do. I also say that GOED has been rated the most transparent economic development agency in the U.S. by watchdog group Good Jobs First. There are certainly portions of the NDAs that are trade secrets, and those should remain trade secrets because if they got out to their competitors that would put them in a disadvantage.

GOED released its five-year strategy plan that said Nevada should continue to build its transportation industry by adding two in-land ports, with one in Southern Nevada and another in Northern Nevada. Can you explain what an in-land port is, and how it helps Nevada’s transportation industry?

An in-land port would be taking goods and services that come into, let’s say, the Port of Long Beach, transporting them directly here to go through customs and then be repurposed to other parts of the country. The jobs that would go to offloading and repurposing those goods and services to the Intermountain Region would happen here. Right now, all of those goods and services travel through our state, but they don’t stop here. So folks use our roads and use our natural resources, and Nevada doesn’t get any doesn’t get any financial benefit from that. It’s a pretty high priority. We have had conversations with the Long Beach port and will continue those, and right now, we’re working with a couple of locations to provide land to move that project.

What can GOED do to help address concerns about Nevada’s education and medical sector?

Those are things that we really need to work on as a community. Certainly, I’m in favor of education for our children. I’ve raised my kids here; I went to school here. As a community, we need to move forward and address those items as a whole. I think there’s good conversation around that. For medical services, we’re also seeing some movement with Roseman University announcing they’re going to have their first medical school class. We have Touro University in Las Vegas and the UNLV medical school are all big, positive events in that space. I think if you talk to any community in the United States, nobody’s saying they’re over staffed with people in the medical field. So this is a nationwide conversation, not just a Las Vegas conversation, but one that I think we’re taking pretty seriously.

With inflation and rising interest rates, do you think Nevada could handle a recession?

Anytime you have a blip in the national economy, it’s going to affect the local economy. A lot of economists feel that it’s really difficult for an economy to go into recession, given almost zero unemployment. So usually to go into recession, you have to suffer from some abnormal unemployment. We’re not at that number, even with Nevada being the highest in the country in the unemployment rate. There are more jobs available than are people in unemployment. It is hard to go into a recession when you have that, even with other economic uncertainty. You’ll notice that unemployment in the construction industry here in Southern Nevada is still an all-time low. If you talk to construction companies, their biggest challenge is that they don’t have enough human capital resources to do their jobs. And so, I’m not of the opinion that interest rates in and of itself have caused us a big choking point.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on Twitter.

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