Expert: Reno's gaming reputation battles logistics advantages

Greater Reno-Tahoe continues to battle its historic image as a gaming town even as it develops a new reputation as a key logistics hub, says a consultant who works closely with companies as they search for new sites.

"Outside of distribution, pretty much Reno is not thought about," says Dennis Donovan, a partner with Wadley Donovan Gutshaw Consulting of Bridgewater, N.J. "It just doesn't automatically appear on the radar screen. But the reality is that Reno is a very good location, particularly for manufacturing and serving the western region with shared services and customer service."

Donovan, who has worked in site selection since 1974 and is familiar with the needs of Fortune 500 companies as well as smaller middle-market firms, will bring an outsider's perspective about the region's prospects to a meeting hosted by the Economic Development Authority of Western Nevada and Governor's Office of Economic Development next week.

Despite the downturn in gaming revenues and extensive marketing efforts to reposition Reno-Tahoe the past few years Reno still is perceived by outsiders as a gaming town, Donovan says. But it's also known by business leaders as an excellent distribution center for western region operations.

Northern Nevada's primary drawing card, Donovan says to site selection executives, is that its location and logistics infrastructure allow market penetration to most of the western United States with second-day ground delivery and most of California with first-day delivery.

"Its transportation resources are second to none, and its transportation costs are a huge advantage for manufacturing and distribution," Donovan says. "Serving California from a Reno location adds low cost and high quality because of the logistics, and the labor market is excellent. The educational attainment of the workforce is well above the national average, it is non-union, and there is a decent pool (of labor) there. There are some shortages, but there is a good pool for branch manufacturing and distribution."

Other positive factors that Donovan promotes to site selectors include northern Nevada's low cost of land and availability of building sites, strong educational institutions, low tax structure, and a small but growing cluster of research-based organizations.

It also has an economic development engine that focuses on three legs of a "crucial triangle" of business startup, retention and expansion and recruitment, he says.

"Taken all together, Reno is a real value proposition for business, bottom line," he says.

But several factors can deter possible expansions or relocations to the region, he notes.

First, in strong economic times northern Nevada simply does not have a large enough base of skilled manufacturing workers, such as fabricators, CNC machinists and tool and die makers.

"The manufacturing trades could curtail the ability of Reno to grow," Donovan says. "Reno has less than 7 percent of its workforce in manufacturing. Many California companies have largely glanced over Reno if they are looking to move or place new capacity. Reno needs to increase its skilled worker base. It has a good core available now, but it needs to add more to it."

Compared to other regions, northern Nevada also lacks a large cluster of information technology professionals. And despite the growing cluster of research-oriented organizations, anchored by the Desert Research Institute, northern Nevada still has a relatively small pool of scientists and engineers to staff large high-tech enterprises. Many companies looking to northern Nevada by needs must be small- to mid-size organizations.

Important infrastructure needs include the extension of the USA Parkway extension to Dayton and the Southeast Connector in Reno to stay ahead of traffic bottlenecks, Donovan says.

He praised the efficiency and services of Reno-Tahoe International Airport, but says a black mark against the airport is its lack of direct non-stop service to the East Coast.

"That limits the ability to recruit East Coast companies to Reno," Donovan says.

There is a serious lack of venture capital throughout the state, and though power costs are lower than in California, they are high than many other states, he adds. Despite its drawbacks, Donovan says Reno still pencils out for many site selectors.

"Reno is a viable location. It is a lot more than gaming. When you combine transportation with the labor market, education and business costs, it makes a pretty compelling case."

The EDAWN/GOED breakfast runs from 7 to 9 a.m. May 15 at the Tuscany Ballroom at the Peppermill. Cost is $25 for investors and $30 for non investors.

Register for the event at edawn.org/aboutedawn/events or contact Shiela Imsdahl at 829-3704 (imsdahl@edawn.org).