As promised… Here are the homes sold this month so far in Northern Nevada by Harcourts NV1 Realty.
This market is on fire right now. If you are looking to sell drop me a line. Interest rates are the lowest they have been since 2013 and there is not much out there to buy. As you all know I work with both Sellers and Buyers. In this market working with both keeps me knowing what the other side of the fence is going through.
RENO, Nev. — A street newly nicknamed Startup Row intersects this city’s old strip of casinos touting Money Maker Jackpots and Crazy Cash Slot Tournaments.
While old-fashioned slot machines are whirring nearby, this stretch of road has become a home for smartphone app makers, cloud computing developers and companies like one that set up shop here recently to build tiny sensors that allow devices to connect to the Internet.
For most of America, Reno stirs images of worn-out casinos, strip clubs and quick divorces. But it is trying to change that reputation and reduce its reliance on gambling by taking advantage of its location and low taxes to gain a solid footing in the new economy. Instead of poker payouts, Reno now boasts of e-commerce ventures, an Apple data center and a testing ground for drones. It also hopes to attract a large factory to build batteries for Tesla’s electric vehicles.
“People believe in this town, and they’re tired of being presented as this joke,” said Abbi Whitaker, a local business owner who helped create a marketing campaign to reshape Reno’s image. “When you’re at rock bottom there’s a good chance to reinvent how you go up.”
A Slow Turnaround
Reno, Nev., which is heavily dependent on the gambling industry, had a more severe downturn than other parts of the country. But as the area attracts new employers with its convenient location and low taxes, the economy is starting to recover.
Reno exemplifies how cities not far from California, including Boise, Idaho, and Tucson, are trying to poach the state’s technology culture to help diversify their economies, marketing themselves as places where taxes are lower and environmental regulations are less onerous. They hope that when the next recession strikes, they will not sink to the same depths as they did in the last one.
Reno is among the best situated, less than a four-hour drive from San Francisco and in a state with no corporate or inventory taxes. It gained appeal as an outpost of Silicon Valley nearly adecade ago after a Microsoft licensing unit and an Amazon distribution warehouse moved in. California refugees were buying homes, lured by the relatively low cost of living and the 30-minute drive to Lake Tahoe.
Then came the Great Recession, walloping Reno’s gambling industry, and its housing and job markets. At the end of the recession in 2009, homes had lost nearly half the value they had in the beginning of 2006, and median prices continued to fall. At its depths in September 2010, Reno’s unemployment rate was 13.4 percent compared with the national average, 9.5 percent, according to Moody’s Analytics.
But now, after several years scraping along the bottom in almost every measure of economic health, Reno appears poised to turn the corner, according to economists who study the region. Housing prices are slowly starting to rise. The unemployment rate has declined to 7.1 percent. New technology companies are arriving, and older ones are expanding, including Zulily, an e-commerce company for women and children’s clothing and home décor, which announced plans in May to double its warehouse and hire 600 people.
Most of all, civic boosters are on edge waiting for Tesla, Elon Musk’s electric vehicle company, to announce the location of its new battery factory that is expected to employ more than 6,000 people. Tesla has said it is considering Nevada, Texas, California, Arizona and New Mexico.
Reno is not far from one of the few lithium deposits in the country, it is relatively close to Fremont, Calif., where the vehicles will be assembled, and its industrial park has tens of thousands of acres of land for the auto company’s new expansive factory. Tesla officials did not respond to requests for comment.
“There are solid reasons to be optimistic about Reno,” said Greg Bird, an economist at Moody’s Analytics. “We’re starting to really see the data turn for them.”
Reno competes for new businesses with Salt Lake City and major cities in Arizona, all of which are convenient for online retailers to set up shipping locations for customers in California and the rest of the West. In Tucson, Duralar Technologies, a global nanotechnology company, announced in March that it planned to set up its United States headquarters there.
Boise has increased its marketing to lure new technology companies and has drawn several start-ups in recent years, said Clark Krause, executive director of the Boise Valley Economic Partnership. The organization emphasizes its outdoor lifestyle on its website.
It is not a simple climb back from the depths of the recession for these cities. Nearly all are constrained by a shortage of skilled workers to fill the jobs created by companies their economic development offices are trying to attract.
“We have the same challenges everyone else does when it comes to finding enough talent to grow as much as we could,” Mr. Krause said.
In Reno, where many workers traditionally have been employed in some aspect of the gambling industry, the work force is less educated than in more populous cities, economists said. Tesla, for instance, might have to recruit from elsewhere to find enough trained workers for its battery plant, should it decide to build here.
“We’re not going to wait for the gaming industry to come back,” said Mike Kazmierski, president of the Economic Development Authority of Western Nevada. “It’s not going to. So what are our strengths, and how do we capitalize on them?”
Mr. Kazmierski is encouraging Reno to prepare for the new kinds of companies his team is wooing. A major part of his strategy is just up the hill from Reno’s casino strip: the University of Nevada, Reno. The campus of 18,000 students has traditionally not played a major role in the city’s economy and is physically separated from the rest of town by Interstate 80. Students often earn their degrees and leave.
But now, the university is starting to work with Mr. Kazmierski’s team to make sure students are trained in specific skills or even the languages needed by companies looking to settle in Reno. The university created an on-campus office space this spring for an Australian drone company that decided to open a research outlet in Reno, one of a handful of locations the federal government has selected for testing unoccupied aerial vehicles.
Mr. Kazmierski outlined his vision on a recent morning driving down Reno’s casino strip, past the Showboat Inn, the pay-by-the-week motels and signs advertising $5.99 prime rib and fries. Towering old casino buildings could be turned into student dormitories or condos. Storefronts could house technology companies. The new drone research building could host an incubator space for businesses.
For companies, the region’s chief draw is its lack of taxes. But the location has other advantages. Reno is less than a two-day drive to anywhere in the West, an advantage for shipping companies.
And there is no shortage of land ready for development. Outside town, along miles of scrubby desert, large manufacturing centers, distribution centers and office parks already have moved in, and more are on the way. The area is so expansive that wild horses roam among the warehouses. Surveyor stakes mark new developments, and fire hydrants sprout seemingly in the middle of nowhere.
Three years ago Reno and the neighboring town Sparks averaged four tours a month for prospective companies. Mr. Kazmierski said that had increased to 10, with scouts from 14 companies visiting in May.
“The most challenging obstacle to get over is our image,” he said. “That image of a second-tier kind of Vegas is embedded in their heads.”
Visiting executives are surprised to learn that the Truckee River cuts through downtown, where a restaurant scene is emerging. Bike paths wind through the city and beyond, and urban gardeners raise chickens in their backyards. A new downtown boutique hotel has no casino. Instead, its main feature is its 164-foot climbing wall.
The Reno Collective, along Startup Row, offers a shared work space to foster entrepreneurialism. On a recent day the office was filled by young people tapping on laptops, some sitting on exercise balls, and one with a dog curled around her feet.
In the same building, Eric Jennings set up his company, Pinoccio, two years ago, making tiny radio sensors for enabling Internet connectivity.
“There’s such a low barrier to entry here,” Mr. Jennings said. “If you’re passionate about something you can just take it on.”
A national think tank study cited Reno-Sparks as the most up-and-coming entrepreneurial community in the United States in its population size.
The Ewing Marion Kauffman Foundation published “The Most Entrepreneurial Metropolitan Areas (MSAs)?” in November, 2013. The Reno-Sparks MSA ranked #1 for per capita startups having five to 49 employees from 1990-2011 compared to other MSAs of similar size.
The founders of Pinoccio, a microcontroller designed to build and link projects to each other and the web, started their business in Reno 18 months ago. Chief Technology Officer Eric Jennings says, “We chose Reno as one of the locations for our Pinoccio offices because of its competitive cost of living, quality of life, strong ties to the engineering school at the University and its proximity to the Bay Area.”
The Kauffman study identified the Reno-Sparks area as the “the most consistent standout” nationally. While this area’s per capita start-up rate was affected by the Great Recession, the area was still above average even during the years 2007-2011.
The study also underscores the economic significance of Reno-Sparks’ educational resources and institutions, and workforce development programs.
“Reno has an unsurpassed quality of life that attracts entrepreneurs. From our Tier One University, world renowned recreation and our new Midtown entertainment and retail area just south of the river to abundant, cutting edge business support services, entrepreneurs find all the features they need to excel,” said Reno Council Member Sharon Zadra, who is also a board member of the Economic Development Authority of Western Nevada (EDAWN).
The Kauffman Foundation’s research shows that all new job creation in the United States is the result of entrepreneurial startups. In researching trends, the Foundation found that startups tend to employ younger workers. There is a correlation to a supply of young, talented, educated workers and startup creation rates.
Reno is the first city in the west among cities across the country involved in the Kauffman Foundation project “1 Million Cups”. It’s an education based forum that brings local early-stage startups together for mentoring and other advice on Wednesday mornings at Swill Coffee and Wine. There are Startup Weekends, TEDx events, venture funding programs and acceleration funds through the City of Reno to support entrepreneurship.
Reno Council Member Hillary Schieve, who spearheads a Technology and Innovation Committee at the City of Reno said, “This is such an honor coming from one of the most highly respected foundations in the country, however I am not surprised as our entrepreneurial and startup community in Reno is exploding with talent all across the board. The examples of Midtown and places like the Reno Collective speak volumes to what a community like Reno can accomplish on a national scale.”
“This is a testament of the positive work by all our community and business leaders who have worked tirelessly to kick start the region’s economy by pulling together and spreading the message that the Reno-Sparks business and economic climate is indeed unique and diverse,” said Sparks Mayor Geno Martini. “For the Foundation to take notice validates what so many of us know, and foreshadows what I believe is yet to come.”
“This is no real surprise to me,” said Sparks City Councilman Ed Lawson. “The Reno-Sparks metropolitan area is showing real signs of bursting with innovative and entrepreneurship, and there are tangible signs of an economic turnaround that can no longer go unnoticed. To have the Ewing Marion Kauffman Foundation take notice indicates that the economic rebound in our region is real.”
“It is exciting to see Reno ranked so high in the Kauffman report as an entrepreneurial metropolitan area. The report shows Reno has ranked consistently high on a per capita basis for startups from five to 49 employees. This should be no surprise to anyone who has been engaged in the entrepreneurial community here in the past few years,” said Mike Kazmierski, CEO of EDAWN. “This community was built by entrepreneurs and is very friendly to entrepreneurs. The recent efforts by EDAWN, UNR and many other groups in the region to support and connect the entrepreneurs in our region have further accelerated the excitement and energy of our start-up community.”
The MSA study ranked Reno-Sparks among areas with populations of about 250,000 to 500,000 people. It considered statistics from the U.S. Census Bureau and the Bureau of Economic Analysis in coming to its conclusions.
The Foundation, which is headquartered in Kansas City, Missouri, focuses its more than $2 billion in assets on supporting innovative and research-based programs that increase entrepreneurship and educational achievements.