Grow from within

Industrial companies that decide to locate in northern Nevada get most of the ink, but slow-but-steady growth of existing customers provides a majority of the job growth in the region.

The Economic Development Authority of Western Nevada says at least 887 basic jobs jobs that bring fresh dollars into the region's economy have been created by expansions of existing companies since last July 1.

That represents 56 percent of the total of 1,595 new basic jobs tracked by EDAWN in the past 10 months and quiet addition of 887 new jobs is more than Wal-Mart brought to the area with its much-publicized distribution center east of Sparks.

The growth trend appears to have some momentum.

When volunteers with EDAWN's Business Builders program go out to interview executives of companies in the region, they often hear about expansion plans.

Recent interviews with executives in advance manufacturing and logistics companies, for instance, found that more than 60 percent of them have expansion plans and those plans would account for 1,334 new jobs in the region's economy during the next three years.

Donna Crooks, EDAWN's business expansion manager, says existing companies with expansion plans generally cite the same reasons a good tax climate, a business-friendly environment, a great location for logistics that draw new employers to northern Nevada.

The impact of new basic jobs ripples through the economy as fresh dollars into the economy drive everything from construction of new homes to retail sales.

One of the most immediate impacts has been felt in the industrial real estate arena.

EDAWN estimates that expanding companies have leased about 2.4 million square feet of industrial space in the past 10 months a figure that represents 83 percent of the total space leased by basic employers.

A year ago, expansion projects accounted for only half the space that was leased by basic employers, and the figure was as low as 17 percent two years ago.

"It's huge, and it has grown over the years," says Paul Perkins, a senior vice president in the industrial properties group of NAI Alliance in Reno.

Some industrial users have accounted for big chunks of that space. Tire Rack, for instance, will move into 310,000 square feet at Tahoe Reno Industrial Center as it expands from a smaller operation in Sparks. PetSmart plans to move into an 873,000-square-foot distribution center, also at TRIC, as it expands from a smaller center at Stead.

But the growth isn't limited to big companies with high profiles. Smaller companies, too, are adding jobs three here, a dozen there and leasing more industrial or office space as a result.

Tim Ruffin, an office broker and managing partner of Colliers International in Reno, says demand from expanding firms has significantly boosted demand for office space in the region this year.

A big burst of industrial construction throughout the region in recent months may have the secondary effect of encouraging even more companies to undertake expansion projects, says Dean Krieger, managing partner in the Reno office of Lee & Associates, a commercial real estate companies.

Some companies, Krieger says, appear to have delayed expansion because a tight market for industrial space pushed rents upward.

As new space comes on line and tenants have more bargaining power, it's possible that some expansion plans may be taken off the shelf.

As it learns of expansion plans, EDAWN works as closely with those companies as it does with newcomers who are scouting the region.

For instance, Crooks says, EDAWN recently worked with local officials to repair a road that was shaking sensitive equipment hauled from the plant of an expanding manufacturer.

"We are a resource for them," she says.