Home Economy How Nevada is pushing to create jobs beyond casinos

How Nevada is pushing to create jobs beyond casinos

by SuperiorInvest

Before the pandemic brought daily life to a halt, Joe Kiele supported himself through the industry that dominates Nevada’s economy. He waited tables at a steakhouse inside a casino in Reno.

Four years later, Kiele, 49, remains in Reno, but now spends his workday inside a factory. Instead of worrying about the doneness of a customer’s ribeye, he trains people on the proper handling of industrial chemicals.

His employer, Redwood Materials, is building a huge complex on a lonely stretch of desert. There, the company has begun recycling batteries removed from discarded smartphones and other electronic devices. It extracts critical minerals such as nickel, lithium, copper and cobalt, and uses them to make components for electric vehicle batteries.

It’s no coincidence that the plant is just eight miles from a major customer: a Tesla car factory.

Kiele’s shift from restaurant server to chemical operator parallels a transformation long advocated by Nevada leaders seeking to make their economy more diverse, reducing their reliance on the hospitality industry for employment. In recent years, they have tried to secure investments from companies committed to the transition to green energy.

The Redwood Materials plant, which occupies about 300 acres and is expected to require an investment of about $2 billion over the next decade, stands as a monument to Nevada’s aspirations. For employees, the factory is proof that there are ways to pay bills besides delivering letters and delivering food.

“We are not based on consumerism,” Kiele said. “We are dealing with the industry.”

This is not the first time Nevada has sought to expand its economy. The state has a history of betting its destiny on the rewards that arise from a single industry.

In the years after the Civil War, the newly formed state focused on silver and gold mining. Over the intervening decades, Nevada’s economy prospered and stumbled in line with the value of the mineral extracted from its parched land.

The legalization of gambling in 1931 (an effort to overcome the Depression) spurred the construction of casinos. Conventional wisdom said that the game was so irresistible that the business was effectively immune to economic crises. But that understanding crumbled during the Great Recession about 15 years ago. Then the pandemic added urgency to the mission to diversify.

The most visible result of that campaign is the emergence of Las Vegas as a hub in the national distribution system for e-commerce.

Nearly 14 million square feet of warehouse space is currently under construction in the Las Vegas metropolitan area, among 40 million square feet planned for the next two to three years, an increase of nearly a quarter of existing capacity. said John Stater, researcher. manager at Colliers, the commercial real estate investment management firm.

“We’re building warehouse space at a pace I couldn’t have imagined,” he said.

The trend is driven by geography. Las Vegas is connected by Interstate 15, which runs from Southern California north to Salt Lake City. Smaller highways link Las Vegas to Interstate 10, which runs between Los Angeles and Phoenix. Some 39 million people live within half a day’s journey.

During the chaos of the pandemic, manufacturing products from Asia overwhelmed the twin ports of Los Angeles and Long Beach. Warehouses in Southern California suffered malfunctions, a cause of delays in the American freight delivery system. That encouraged retailers to look for alternative places to store their products.

Las Vegas attracted with large developable lots. Most of the new warehouses are being built on the fringes of the metropolitan area, north of Las Vegas, in a scrub-covered desert that stretches into treeless mountains.

There, Prologis, a San Francisco real estate investment trust, is building aggressively and recently purchased a 900-acre undeveloped tract.

Just a few years ago, Prologis executives were excited about the idea of ​​building 200,000-square-foot warehouses and leasing them to major brands. On a recent afternoon, excavators moved dirt at a soon-to-be-completed 680,000-square-foot warehouse for Moen, the maker of kitchen and bathroom fixtures.

“We are very optimistic about continued growth,” said Lisa Brady, vice president of Prologis.

Crocs, the shoe company, is preparing to open a distribution center in a new million-square-foot warehouse. There, about 400 initial workers who will earn a starting wage of $18 an hour will begin handling orders.

More than 93,000 people work in transportation and warehousing in the state, an increase of one-fifth since before the pandemic, according to data analyzed by David Schmidt, chief economist for the Nevada Department of Employment, Training and Rehabilitation. That compares with 364,000 jobs in leisure and hospitality.

Some economists argue that warehouses are a dubious alternative to casino work, since many people burn out within a few years, while salaries tend to be lower. But the Nevada Governor’s Office of Economic Development, which is courting the investment, maintains that entry-level work can lead to supervisory positions that pay much more than typical jobs in leisure and hospitality.

“I see this as a stepping stone to the future,” said Bob Potts, the agency’s deputy director.

A longer-term goal focuses on replicating the business activities of people like Martin Schiller, founder and CEO of a biotech company called Heligenics.

Dr. Schiller’s resume included a teaching stint at Johns Hopkins when he arrived 14 years ago to start a medical institute at the University of Nevada, Las Vegas. In a lab there, he pioneered a way to perfect existing drugs by bombarding them with tens of thousands of genetic mutations, mapping how cells develop resistance.

“We’re hackers,” Dr. Schiller said.

On a recent afternoon, he and his team evaluated data from a trial of a variety of interferon used to treat multiple sclerosis, as they moved toward Food and Drug Administration approval for a new therapy.

At first, Las Vegas felt isolated, but then Dr. Schiller came to appreciate some advantages. College gave him time to develop his technique and launch his business, free of the publish-or-perish culture that governs much of academia. The city rented him space in a museum to establish his first laboratory. He built his current offices and laboratory on a shoestring budget of $4 million.

“In San Francisco, that would require $20 million,” he said.

Reno has long operated in the shadow of Las Vegas, but of late the city has thrived through reinvention. The Tahoe-Reno Industrial Center has become a showcase, anchored by the Tesla factory and a Panasonic plant that makes batteries for electric vehicles.

Redwood Materials, founded by Tesla co-founder JB Straubel, began limited-scale production in late 2022. The company employs 661 people at its Nevada plant, with a goal of creating 1,600 jobs by the end of the decade. .

Redwood’s liaison to state and local government is Don Tatro, a former state senator whose grandfather ran the Carson City Nugget, a casino south of Reno. Many of the new employees have experience in leisure and hospitality. His new job (creating parts for electric vehicles) comes with a sense of mission.

“There’s a lot of security in this,” said Grace Uhart, 27, who began her career in the front office of the Venetian resort in Las Vegas and now oversees culinary and housekeeping services at Redwood. “We would have to resolve the business we are in.”

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