Official: Varied business base will help Las Vegas flee recession

If you long for a job with a big high-tech company or a major new factory, Mike Skaggs is the guy who could help fulfill your dreams.

As executive director of the Nevada Commission on Economic Development, Skaggs' primary mission involves attracting new companies to diversify the Silver State's commercial base away from its longtime reliance on gaming and hospitality.

For Skaggs, economic development was an accidental but happy discovery, a detour from a planned career in advertising. Since he began his economic-diversification career in Texas in the 1960s, he's helped turn around flagging economies from the Lone Star State to British Columbia, with stops in Albuquerque, N.M., and Phoenix along the way.

Now, Skaggs, who took over his post in January 2008, faces what he calls his toughest challenge yet: Helping revive a moribund Nevada economy, with its nation-leading unemployment.

Question: What's the first job you ever held?

Answer: I grew up on a ranch south of Amarillo (Texas), so my first job was when I was about 12 years old, doing whatever they told me to. It's interesting to work around cowboys, because they don't talk. They just watch you make stupid errors. When you say, "Why didn't you tell me," they say, "Well, you've gotta learn it some way."

What I learned was how self-reliant they are. You don't call someone to fix things -- you just fix them. They're good problem-solvers and hysterically bad communicators. They act like words cost $50 a piece.

Question: How did you get into economic development?

Answer: I took an internship with the big New York ad agency Foote, Cone & Belding between my junior and senior years at Texas Tech. After college, I went into the Army. When I came back to Texas, I got a job working for a smaller ad agency. Because of Foote, Cone & Belding, I had all these dreams and aspirations. It was kind of like that (AMC) show "Mad Men." That was the period. So when I came back to Texas, I was hoping I'd get a really cool account, like a beer or cigarette company. Instead, one of my first accounts involved submersible pumps. I was crushed.

But another one of my accounts was the Lubbock Board of Development. I handled the account for eight months, then joined their staff full time. Within six months, I had located a Texas Instruments plant with 6,000 employees in Lubbock.

Question: Did everyone think you were a superstar?

Answer: That was the problem. My boss called me into his office and said, "What do you do next?" I said, "I have to make sure the plant ramps up with people, etc." He said, "No, I mean, what do you do next for a job? We've driven unemployment down below 1 percent and we don't need you." He was starting to feel insecure.

What I was beginning to understand was the idea of being of service for an occupation. This is a really unique way to make a living. The people you help never even know you exist. You work behind the scenes to attract companies and help them get open. A year later, you'll glance over at the side of the road, and there's a new plant with 1,000 cars in the parking lot. It's very gratifying work. I got hooked on it.

Here in Nevada, we have more than 180,000 people out of work. We have to attract businesses to create jobs as soon as possible, but for the long-term good, we need to embrace higher education and the research capabilities of the state to develop strategies to build careers. For me, it's probably the biggest turnaround I've been involved with, because the numbers are so dramatic and unemployment is so high. We've been working six days a week since I stepped in this office, because it's a hard job.

Question: You've drawn up economic-development plans across the Western United States and Canada. Which was your most challenging job?

Answer: This assignment probably is. Economic development is not an assumed function of government here. It's never been at the forefront of state strategies, because we had a different economy that kept us prospering. The understanding of economic development here is really not at a very high level, whereas in places like Texas and Oklahoma, it's ingrained. As agriculture became more mechanized and needed less labor in the '50s and '60s, they embraced business development. They've been at it a long time.

This commission was created in '83 in response to a downturn, but we bounced back pretty quickly back then. I think this is the first time the state has hunkered down to create and implement a complete economic-development strategy. But that also makes it probably my most rewarding job, because a lot of things were blank sheets of paper when I got here. There was some work framed as strategy, but they could never attract the funding to do it all. Now, as long as we can justify that certain strategies will pay off, the funds will be available.

Question: How do we compare as a business destination to those other Western markets?

Answer: Las Vegas is pretty special. There are very few global cities. You can count them on limited fingers and toes, and Vegas happens to be one of them. Gaming brought us international prominence, and McCarran (International Airport) was able to develop a lot of direct routes offshore because of gaming. Those same routes and air corridors are available for business-development purposes.

There's also a proposition in the works to establish a World Trade Center in Las Vegas, and that is exactly what we need -- a focal point for global trade in Las Vegas -- because the city has an international brand. And solar energy has reinforced that. In solar energy, I think Las Vegas has found its sweet spot to really change dramatically in terms of being a more diverse economy.

Question: Why is it so hard to diversify our economy? People have talked about it for years, and we do lure different types of businesses here and there, but a big chunk of our revenue still comes from hospitality.

Answer: It's resources. When our agency first started, a jet-fuel tax was its funding source. That was eventually removed, so the agency starts with zero dollars every year and has to fight to get money for economic development. We get quite a bit of tourism traffic from the East Coast, but we don't have enough marketing money to get on the radar of East Coast companies who need to branch out and serve the growing West. We really have to put more money into focusing on the fact that we are a business site, particularly in renewable energy. That sector will be a springboard that launches us into a different global perception.

Question: How do you plan to boost your resources?

Answer: We need to continue efforts to build public-private partnerships. We've got to build a higher-level consortium between what state dollars we can put on the table and what private dollars can be expended in concert with that so that we engage the development community in our marketing activities.

Question: If you had a magic wand, what would you change about Nevada? What's the one thing we need to help us attract big-name businesses?

Answer: We need to build this new identity as a business site and we have to communicate it. It does come back to that very fundamental principle: It doesn't do any good to have a store if you don't put an open sign out. We have been quite restricted in that. Our peer organization in Arizona has a $50 million budget. But they also have issues in regard to personal and corporate income taxes. We're trying to figure out the most appropriate way we can put more money into an aggressive ad campaign, and we're going to have to look as an agency at what we throttle back on in other arenas to do that. These are not easy decisions.

Question: What has been your biggest career accomplishment?

Answer: It's when I pull this one off. I know this one's going to work. I've been here before. I went through a real estate bust in Dallas, an oil bust in Oklahoma, a savings-and-loan bust in Phoenix. Granted, this one's ugly, but look at the high-level conversation we're having about the need for economic development. That would never have happened had we not gone through this painful experience. I've talked with construction executives, legislators, the business community -- we are all on the same page with this one. We will make this happen, because we don't have a choice.

I've got neighbors who've been out of work for six months, and who come over on weekends and ask me if anything's going on. We have a very personal role in securing a better future for the people who live in this state. The people at this agency take that very seriously. Public service is a real thing. The people who get into these positions do it because they believe in serving people. They're honest and they work hard. Now, we see this great, collaborative conversation going on between elected officers of the state and legislators. They're all ready to make major advancements in economic development. And they're darn creative, so there'll be a lot of new solutions that will surprise us all.

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