Officials: Businesses not sold on Nevada

CARSON CITY -- Too many business owners think about Nevada only as a place to gamble, not as a place where they could relocate their businesses, two economic development officials told legislators Wednesday.

To attract their attention, Nevada must spend far more advertising the business benefits the state offers or companies will go elsewhere, the development duo said.

Somer Hollingsworth, president of Nevada Development Authority, and Chuck Alvey, president of Economic Development Authority of Western Nevada, were addressing an interim legislative committee studying transportation and infrastructure issues.

Nevada has been losing companies to "giveaway" states that offer free land, buildings and other incentives if owners will move their businesses there, Hollingsworth added.

"The latest was Hewlett-Packard," he said.

New Mexico gave the computer company $73 million in incentives and tax breaks to open a customer service and tech support facility in Rio Rancho, an Albuquerque suburb. Hewlett-Packard officials said they eventually would employ 1,800 full-time workers with an annual payroll of $54 million, according to the Rio Rancho Observer newspaper.

Nevada should not try to compete with giveaway states such as Arizona, Texas, Utah and New Mexico, Hollingsworth said. But it should advertise how it consistently ranks among the most business-friendly states and has no corporate income or personal income taxes.

"We have to sell the point we are not just about tourism and gambling," he said. "Once they get here, they become spokespeople for us."

Assemblyman Kelvin Atkinson, D-North Las Vegas, who is the committee chairman, agreed that the state needs to advertise its business advantages. But he held out no promises that the Legislature can fund it because the state will face another budget shortfall, perhaps as much as $3.4 billion.

"None of us knows what will happen next session," Atkinson said. "Everything costs money. Advertising to attract business is going to cost money, but we will have to look at it."

But Sen. Maurice Washington, R-Sparks, questioned whether Nevada is losing its reputation as a business-friendly state because of legislators' decisions to increase taxes in 2003 and 2009. He said legislators may implement a corporate profits tax and an expanded sales tax on services next year.

"Doesn't that put us in a bad light?" asked Washington, who won't be serving in the Legislature next year because of term limits. "Nevada as a business friendly state has been tarnished a little."

Alvey said he didn't think the tax increases have hurt Nevada's image with business owners.

"Compared to California, they see Nevada as a huge opportunity," he said.

If there are going to be tax increases, then Alvey said businesses favor broad-based taxes that hit all businesses equally, not those on a specific industry.

Hollingsworth said companies have grown savvy about the incentives giveaway states will offer.

"When they offer cash and buildings and land, it is hard to pass up," Hollingsworth said. "It is instant gratification for them."

He added that many business leaders have spent 25 or 30 years coming to Las Vegas for recreation, but they know nothing about the business opportunities in Nevada.

"We never get a chance to compete for a lot of companies," Alvey added. "We talk to them all the time. 'Reno?' they say. 'That's a place for a vacation.' "

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.