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1FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
Banking onNevada p12
Healthcare p17
Architects and Engineers p28
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4 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
Novembermayseemfarawaynow,butplansforthenextelectionsarealreadywellun-derway.NowisthetimetostartresearchingthefieldofcandidatestodecidewhoyouwanttorepresentyourinterestswhentheLegislatureconvenesinFebruary2015,andwhoyouwanttorepresentNevadainWashington,DC. Thisyear,morethanever,it’svitaltoelectpeoplewhowillsupporttheinterestsandrightsofthebusinesscommunity.Nevadaneedspro-businessofficeholderstobalancetherisingtideofbig-governmentProgressiveswhoseemintentondestroyingoureconomyaswellasourwayoflife.Democratscontrolledbothhousesinthe2013NevadaLegislature,makingitextremelydifficultforRepublicanstoblockanti-businessmeasures.Ifbusinessownerswanttohaveanyinfluenceinthenextlegislativesession,weneedtoelectmoreconservativeRepublicansinNovember.Nowisthetimetoeducateandmobilizeyouremployees;yourbusinessandtheirjobsdependonit. AsIpointedoutinlastmonth’scommentary,NevadavoterswilldecideinNovemberwhethertoinstituteataxongrossreceipts.Ifitpasses(whichwouldbeadisasterforNe-vadabusinesses),thenextLegislaturewillhavetoanswerquestionsaboutthedetailsofsettingitup.Ifitfails,youcanbetthatDemocratswillputforthplentyofothermeasurestoraisemoneyattheexpenseofNevada’sbusinesses.Eitherway,weneedelectedofficialswhorealizethatjobsarecreatedbybusiness,notbygovernment,andthatexcessivetaxa-tionandover-regulationwillkilljobsinNevada. AlthoughthefinaldatefordeclaringcandidacyisMarch14,severalpromisingcandi-dateshavealreadyannouncedthatthey’rerunning.Herearejustafewofthem: Niger Innis, 4th Congressional District.InnisisaconservativeAfrican-AmericanandTeaPartymemberwhoservesasthespokesmanfortheCongressonRacialEquality.HehopestounseatRep.StevenHorsfordbyreachingouttominorityvotersinthe4thcongres-sionaldistrict,whichis54percentnon-white.HebelievesconservativevaluescanhelpfindsolutionstoAmerica’schallenges. Adam Laxalt, Attorney General.AnexperiencedattorneyandaNavyveteranwhoservedinIraq,Laxaltisanopponentoffederalinterferenceinstatemattersandhasprom-isedtosupportNevadabusinesses.Heiscommittedtofreemarketprinciplesandpledgestofightagainstthepoliciesthattiethehandsofjobcreators. Patricia Farley, Senate District 8.Farleyownsaconcrete,pavingandmasonrycom-panyandisfamiliarwiththechallengesofbusinessowners.AstheformerpresidentofAFAN,whichprovidesservicestopeoplewithAIDS,shebelievesthatwecanbecompassionateaswellasfiscallyresponsible,andwilllookforwaystomakeourgovernmentmoreefficient. Becky Harris, Senate District 9.Harrisisamilitaryspouse,practicingattorney,andhasassistedherhusbandwithhissmallbusinessforthelastnineyears.Herthreeareasofconcernareeducation,jobsandhousing.ShebelievestheseissuesmustbeaddressedinorderforNevadatohaveaprosperousfuture. Michael Roberson, Nevada Senate District 20. ElectedtotheSenatein2010,Rober-sonservedastheMinorityLeaderinthe2013session.Astaunchdefenderofconservativevaluesandbusinessprinciples,Robersonwasa2011recipientofthe“DefenderofLiberty”awardfromtheAmericanConservativeUnion(ACU). Foranupdatedlistofcandidates,visitthewebsiteoftheRepublicanpartyinyourareaofthestate.Thencontactthecandidatesfromyourdistrict,interviewthemand,ifyouagreewiththeirpositions,throwyoursupportbehindthem.Asthefilingdeadlineapproaches,Ihopemoreyoung,conservativeNevadanswilldecidetorunforoffice.Ourstatedesperatelyneedsthemtohelpussteeracoursetowardfiscalresponsibilityandtoprotecttheliveli-hoodsofNevadabusinessownersandtheemployeeswhodependonthem.
By Whose Authority?For more information on my Commentary and to see some of the backup research, or if you wonder why I take the position I take, go to www.LyleBrennan.com.
November 2014 Elections:Support Pro-Business Candidates Now
Nevada Business Journal, Nevada Business Magazine and Nevada Business are divisions of Business Link, LLC. 375 N. Stephanie St.,Bldg. 23, Suite 2311, Henderson, NV 89014. It is listed in Standard Rates and Data, #20A-Business-Metro, State and Regional. TopRank Nevada – Annual Statewide Book of Lists is a publication of Nevada Business Magazine.
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PUBLISHERLyle E. Brennan • [email protected]
PUBLISHER / CEOConnie Brennan • [email protected]
MANAGING EDITORTarah Richardson • [email protected]
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CONTRIBUTING WRITERSDoresa Banning • Jennifer Rachel Baumer • Shelley BerkleyTravis Crowder • Geoffrey Lawrence • Miriano Ravazzolo Robert Rosenthal • Al Wagner • Jeanne Lauf Walpole
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The Commentary
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6 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
Contents
8 COVER Corporate Branding A How To Guide by Doresa Banning
12 FEATURE Banking On Nevada A New Day Dawning by Jennifer Rachel Baumer
17 INDUSTRY FOCUS Healthcare
28 BUILDING NEVADA Back to Basics Architects and Engineers in Nevada by Jean Lauf Walpole32 RED REPORT
Tracking Nevada’s Deals
4 Commentary by Lyle Brennan
22 Face to Face Miriano Ravazzolo, Travis Crowder, Shelley Berkley
23 Power of Attorney Are unpaid internships becoming a thing of the past? by Robert Rosenthal
24 Free Market Watch The Left’s New Agenda by Geoffrey Lawrence
26 Profit & Loss Profit and Loss Statements by Al Wagner
27 Around the State36 Commercial RE Report
Industrial
37 Business Indicators
38 The Last Word What do you enjoy most about being a business owner and/or executive?
DEPARTMENTS
ON THE COVER: (L TO R)
Randy SnowR & R PartnersDarcy NeighborsCIM Marketing PartnersKassi BelzMassMedia Corporate CommunicationsDave KirvinKirvin Doak CommunicationsStephanie KruseKPS | 3 Advertising and MarketingB.C. LeDouxThe Glenn Group
Anthem.com/mobile Find a doctor when you’re on the go.
Anthem Blue Cross and Blue Shield is the trade name of Rocky Mountain Hospital and Medical Service, Inc. Life and disability products underwritten by Anthem Life Insurance Company. Independent licensees of the Blue Cross and Blue Shield Association. ®ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. 43118NVBENABS 1/14
8
CORRECTION: In the January Building Nevada story, the sale of Reno’s US Bank building was incorrectly attributed. The NAI Alliance Office Properties Group was the brokerage team responsible for the building’s sale and the correct sale amount was $5.98 million.
PHOTO BY:Chris Tucker
Photographed with permission atThe Neon Museum,Las Vegas, Nevada
7FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
HOUSEADdroid/iphoneapp
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digital!Nowavailable,FREEforalimitedtime.
DownloadtodayintheAppStoreorinGooglePlay!Nevada Business Magazine’s MobileEdition
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8 NEVADA BUSINESS MAGAZINE FEBRUARY 2014
Cover Story
The Neon Museum in downtown Las Vegas (featured here and on cover) showcases the signs that have been pivotal in branding Southern Nevada as America’s Playground.
9FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
What differentiates similiar com-
panies,makingonestandout from
the pack? Why do potential cli-
entschooseoneover theother for
theirservices?Theanswerisinthe
brands.Branding,whilesecondna-
turetosome,remainsamysteryto
numerousotherbusinesses.Infact,
a common belief is that a compa-
ny’sbrand is its logo; this isn’t the
case. So what exactly is a brand?
What isbranding,andwhatdoes it
involve?
A HOW TO GUIDE
By Doresa Banning
Corporate Branding
10 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
about you. You want people to be loyal to
you. You want them to hold you close. You
have to help them along with that.”
Identifying the Brand It’s best to start the work of branding
before launching a company, experts say.
But the process can begin any time, and
the sooner it does, the better off a business
will be.
The first steps involve research, which
is crucial.
“A brand launch is a very unique and
interesting process. You get one chance
to do it correctly because you want to
come out of the chute in position correctly
against competition already in the market-
place,” said Stephanie Kruse, president
and chief strategist of KPS|3, a Reno-
based marketing, advertising, public rela-
tions and digital firm.
Research involves exploring and under-
standing staff, products/services (internal)
and studying both the target audience(s)
and competitors (external). For the internal,
determine the who, what, why and how of
a company, and identify what the business
isn’t. Ask questions like: What does the
company excel at? What is the vision for
operations? Can employees champion the
brand?
Figure out demographics, needs, be-
liefs and desires of a target audience. Fo-
cus groups and/or surveys may help. Gath-
ering this information outside of the com-
pany is essential.
Analyze competitors in terms of their
brands, offerings, product/service attri-
butes, pricing, messaging and more to
know what already exists in the market-
place. Where should the company’s brand
fall relative to your competitors’?
Understanding the internal, consumer
and competitive perspectives gives the
tools to hone in on a brand position, or
“the white space where a brand can make
a claim of distinction and live uniquely in
consumers’ minds,” LeDoux said.
“A brand is a company’s personality,
its unique essence, that ‘thing’ that al-
lows consumers to create an emotional
connection with a company and differ-
entiate it from other companies, in their
minds,” said B.C. LeDoux, president, cre-
ative director and partner of The Glenn
Group, an advertising, interactive and
public relations agency with its head-
quarters in Reno and a secondary office
in Las Vegas.
A brand is a promise that a company
will be, represent and do what it says it will.
It’s the foundation upon which every idea,
decision and action get tested.
“[A brand] resides in the hearts and
minds of customers, employees and pros-
pects. It’s the sum of their experiences
and perceptions about what your compa-
ny does,” said Kassi Belz, APR, president
of MassMedia, an advertising, marketing
and public relations firm headquartered in
Henderson with offices in Reno, Irvine and
Phoenix.
A brand is incredibly valuable, which
businesses often don’t realize.
“If you take Coca-Cola and add up all of
its assets—people, factories and recipes—
and assign a dollar figure to it and put a
dollar figure to its worldwide brand, I guar-
antee you the brand will be more valuable,”
said Randy Snow, chief strategic officer of
R&R Partners, a Las Vegas-headquartered
advertising and communications firm with
additional offices in Reno, Austin, Denver,
Los Angeles, Phoenix, Salt Lake City, and
Washington D.C.
Branding is the ongoing process of in-
tentionally positioning a company in a dis-
tinctive and favorable way in the minds,
hearts and souls of your target audience(s).
It’s critical in that it creates emotional and
rational connections with them and, ulti-
mately, drives sales.
“You want your brand position in your
customers’ minds,” Snow added. “You
want your promises to be front and cen-
ter. You want people to feel a certain way
BRANDING YOUR COMPANY Cover Story
• Truly understand your target audience(s). For instance, avoid building your brand around yourself as representative of that group if you’re not part of it.
• Conduct research instead of making assumptions, say, about your audience(s) or what current customers feel about your company. For example, talk to and question your customers about their feelings and beliefs instead of assuming you know what they are.
• Be open to the external feedback and research findings. Sometimes, what gets unearthed in the investigative process can be difficult to hear.
• Carve out what your company can be great at instead of trying to offer too much to too many people. A brand needs to be a niche.
• Create a budget for your branding efforts, and stick to it.
• Fall in love with and commit to your brand instead of frequently wanting to try a different one.
• Routinely communicate and reiterate your brand to your internal team.
• Be consistent in communicating and portraying your brand externally; deliver on your promise. Telling people you’re one way and acting another can kill your brand.
• Finally, keep in mind this statement from The Glenn Group’s LeDoux: “A strong brand with a distinct personality and message can make all the difference when it comes to standing out in a world of clutter and commodity.”
To facilitate a strong, effective brand, follow these expert-recommended must-dos:
BrandingEssentials
1
2
3
4
5
6
7
8
9
11FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
It’s vital that a business ensure the
brandpromise is true inallaspects.Cus-
tomerswilllearnandbevocalifit’snot.
“Ifthebrandisn’trootedintruth,noth-
ing else after thatmatters all thatmuch,”
Snowsaid.“Peoplewilldismissyou.Brand
isbelief,whichiswhytruthisthemostim-
portantthing.”
Evenbusinessesalreadyoperatingthat
haven’t purposefully engaged in branding
haveabrand.It’swhatcustomersthinkof
andbelieveabout thebusinessandoffer-
ings.Arelationshipbetweenthetwoexists,
the problem is the lack of control over it.
Thiscanputthecompanyinaperilouspo-
sitiontobein.
“Itcanbeagamblebecausethenyou’re
standingfornothingandlettingcustomers
andcompetitorsdeterminewhoyouare. I
don’tthinkthere’sabusinessouttherethat
wantstoleavetheirfatetosomeoneelse,”
saidDaveKirvin,co-partnerwithBillDoak
ofLasVegas-basedKirvinDoakCommu-
nications,apublicrelationsandmarketing
company.
Inmostofthesecases,it’seffectiveto
startwiththebrandthatexistsandtweak
or tend to it. But that, too, first requires
researchanddoing the foundationalwork
mentionedabove togeton trackwith the
desiredbranddirection.
“You really need to understand what
your clients and customers think about
yourcompanyalready,”Belzadvised.
Delivering the Brand Once the brand has been debated,
identifiedanddecidedupon,thenwhat?
“You can’t just say you’re X brand,”
Krusesaid.“Youhavetobeabletodeliver
it with the right staff, rightmanufacturing
process,customerservice,allofthethings
that allow you to deliver on your brand
promise.”
The next step is to develop a brand
platform, a document that specifies the
brand’sposition,purpose,mission,vision,
attributes,pillars,uniquesellingpointsand
understand and ex-
perienceabrandand
whatmakesitunique
and valuable,” said
LeDoux.
Nextcomesbrand-
ing internally. The
companymust “drive
the brand promise
down into the opera-
tionsof thecompany
so that the brand is
not an empty prom-
ise,” Kruse said.
Communicate the brand to everyone in-
ternally—employees, decision makers,
committee members, partners, directors,
etc.—togetthemonboardandboughtinto
value proposition. Then comes the diffi-
culttaskofdeterminingandestablishinga
brandingbudget.
“This platform becomes a North Star
for creating a visual and verbal identity,
experiential touchpoints andbrandproof
pointsthatallowconsumerstomoreeasily
Cover Story
CONTINUES ON PAGE 34
“If the brand isn’t rooted in truth, nothing else after that
matters all that much. People will dismiss you. Brand is
belief, which is why truth is the most important thing.”
— Randy Snow
nevadabusiness.com
TODAY!Subscribe
12 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
A NEW DAY DAWNING
Feature Story
Bankingdoesn’texistinavacuum;theindus-try isaffectedby theeconomicenvironment
which,inturn,canbedirectlyaffectedbyprac-
ticesandrealitieswithinthebankingindustry.
SoitshouldbegoodnewsthatNevadabank-
ersarefeelingoptimisticabout2014.
The banking industry has stabilized, ac-
cording to George E. Burns, commissioner,
Nevada Financial Institutions Division. Gen-
eral indicators show the industry is improv-
ing.Thereareimprovedloanportfolios,fewer
chargeoffsanddelinquenciesandimproved
earnings. “We’reoptimistic at thispoint that
thosebanks thathavesurvived thefinancial
crisiswillbegoodtogoforthefuture.”
Nevadastillleadsthenationwiththehigh-
estunemploymentnumbers,but thosenum-
bers are dropping, and in October numbers
indicateda1.8percentemploymentexpansion
overtheprevious12months.Inthesouth,Sum-
merlinCentreisgrowingupoutoftheground,
andcranesonTheStriparerenovatingtheSa-
haraHotelandCasino.“It’snicetoseecranes
flyingoverTheStripagain,”saidJohnWilcox,
Nevadaregionalexecutive,CityNationalBank.
Despite the optimism in the banking in-
dustry, Nevada continues to experience a
modest recovery. Businesses are beginning
tomoveagain,newbusinessesrelocatingto
thestate,existingbusinessesarecomingout
ofhibernationtogrowandexpand.Forbanks,
findingqualifiedborrowersisbecomingeasier
borrower-wisebuthardercompetition-wise.
Therearemorequalifiedborrowers than
thereweretwoyearsago.“People’sfinancial
statements are improving,” said Wilcox.
“We’veseenpeoplegetdebtofftheirbalance
sheets, seen them become much more
efficient, seen them accumulate cash, and
sowe’restartingtoseepeopleinvestintheir
growth,whichmeans they’ve got to have a
partnerinabanktocomealongbesidethem
tooffercapitaltofundthatgrowth.”
Nevadalostasignificantnumberofstate-
chartered banks to failures andmergers, but
competition is heating up between survivors.
“Themajorityoftheindustryisflushwithliquid-
ityandwe’re inaperiodofhistorically lowin-
terestrates,andthebestwayforbankstoim-
provetheirmarginsistolendmoney,”saidTerry
Shirey,CFO,NevadaStateBank.“Thereisnot
asmuchdemandforcreditrightnowaswesaw
priortotherecession,sogoodloansarehighly
soughtafterandthere’salotofcompetition.”
by Jennifer Rachel Baumer
13FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
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14 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
This helps stabilize the real estate market,
which helps the banks and borrowers in
manyways.Agoodexampleisthestart-up
businessesalternativelendinghasfundedin
downtownLasVegasandtheeconomicre-
surgencegoingonthere.”
Forthemostpart,manyofthealternative
lenderscomingintoNevadaareworkingwith
specific niche markets. “On the consumer
side, payday and title lenders are making
aprettygoodvolumeof loansandsuch to
thoseborrowersthathavebecomeunquali-
fiedinthetraditionalbanksensebecauseof
the financial crisis,” said Burns. Borrowers
whodon’tfitabankborrowingprofilemayfit
withasmall-dollar,short-termloanprovider.
Because of the high loss volume on such
loans, because the borrower’s credit isn’t
greatorhisemploymentisshaky,theloans
carryveryhighinterestrates.“That’snotreal
good forbanks forapublic imageor regu-
latorypointofview,andit’sunprofitablefor
theminmostinstances.That’sthenicheal-
ternativelendersasfarasconsumersgoand
they’refillingthatparticularniche.”
New Money in Town — Investors Aresurgenceofinvestorsmovingintothe
state has had an effect on Nevada banks.
“There’sbeenalotofcashaccumulatedover
thepastfiveyearsandwe’reseeinginvestors
cominginandbuyingmultiplepropertiesand
singlepropertiesatsignificantopportunities,
and that’s a sign that good things are hap-
pening, because those investors are smart.
They’renotgoingtocomeintoamarketun-
lesstheyknowtheycangetareturn,sothat’s
asignthingsaremovingintherightdirection,”
saidWilcox.“We’veseenlargeinvestorpools
andindividualinvestors;alotofmovementin
thelastsixmonths.”
Investors moving into the state have
helpedfueltherealestatepurchases,buying
bank-ownedproperties,saidHendricks.“The
increased demand helped increase real es-
tatevalues,whichhelpedexistingborrowers
andbanksshoreuploansthathavecollateral
New Concerns Despitetheapparenteconomicrecovery,
bankersarestilloperating inanenvironment
of uncertainty. The government shutdown in
thefallof2013followedbyconcernaboutdebt
ceilingandthehealthcarerolloutallhavethe
potentialtocauserecoverytostutterandstall.
“Todaywe’vegotabetterspiritofcoopera-
tionthanwehavehadinawhile,”saidWilcox.
“We’veseenabudgetpassedandI’mhoping
that’sasignofthingstocome.Becauseifwe
eliminatetheuncertaintyandpeoplecanplan
for their futures, thenweshouldcontinue to
seeprogressinthisrecovery.”
Notonlydoesuncertaintycausebusiness-
estohesitatebeforeexpandingorspending
moneyorseekingtoqualifyforaloan,recent
events like thegovernmentshutdownmeant
Small Business Administration (SBA) loans
were frozenandcouldn’t function; forbanks
therewasuncertaintyaboutwhentheycould
fundloansthathadbeenapprovedunderSBA
guidelines.
“Onebig concern for the industry is the
regulatoryenvironment,”saidGalloway.“Who
knowswhattherulesaregoingtobeandhow
they’regoingtobeenforced?Nobodyknows.
It’sanewgame.”
New Kids in Town— Alternative Lenders InNevada,bankershaven’tfoundalternative
lendersmovingintothemarkettobeasignifi-
cantissue.It’spossibleoncethemarketheats
up andmore borrowers are looking formore
loansandinterestratesgoupthattheremaybe
moreimpactfromthealternativelenders.
“Whencapitalisinjectedintothemarket,
itbenefitseverybody,”saidBruceHendricks,
CEO, Bank of Nevada. “Alternative lenders
areassistinginrepositioningfailedprojects.
Whichisgreatforthebusinessesthem-
selves. For qualifiedborrowers, it’s a buy-
er’smarketwhere twoor threebanksmay
be vying for the company’s business. In
this recoveringeconomy,whenabusiness
owneralreadyhasarelationshipwithabank
they’reapttostaywithit,saidGeneGallo-
way,presidentandCFO,PlazaBank.“Since
there’snota lotof in-migration in termsof
businesses, those of us who are growing
have to take clients from each other, and
that’salongerprocess.”
Addingtothecompetition,noteverybusi-
nessownerwhocanborrowmoneywantsto.
When it comes to bankers finding qualified
borrowers in the post-recession economy,
it’smoreacaseof laggingeconomicrecov-
eryandborrowershavingneedorcapacityto
borrow, rather than thenewregulatoryenvi-
ronment,saidBurns.
“Regulations are changing the industry,
some for good, some not so good for the
industry, in response to the financial crisis,”
saidBurns.“Butmostofitisjustbeingable
tofindpeoplewhohavetheneedtoborrow.
Businessesarelaggingandtheydon’tborrow
unlesstheyintendtoexpand.”
The need to borrowmay not be present
even if the ability to do so is. “If business
owners do have the need and the income
streams to support the borrowing, what are
theygoingtouseitfor?Togrow,orjusttotryto
coveroverheadexpenses?Althoughbankers
liketoblameregulationstoaverygreatdegree
for lending doubt out there, if they’re honest
withthemselves,theywouldsayit’sreallyjust
thedemandisn’tthere,”saidBurns.
Still, it’s improving. Nevada State Bank
grewloansabout$115millionin2013forthe
first time since 2008 and funded about $51
million in small business loans, which was
aboutflat fromtheprioryear,butconsumer
loansfundedwereabout$235million,up$67
millionfrom2012.“Alotofwhatwe’reseeing
and saw in2013wasa lot ofpeople taking
advantage of the low interest rates and low
homeprices toeither refinanceorpurchase
newhomes,”saidShirey.
Feature Story BANKING ON NEVADA
John
WilcoxCity National Bank
15FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
shortfallsandweareseeingimprovementin
appraisedvalue.”
Noteveryinvestormovingintothestateis
goingtowanttoworkwithalocalbank.Those
local investors who have relationships with
banksmayworkwiththatbankinadvanceto
positionthemselvesinthebestsituationthey
can for bank financing and personal equity,
whileother investorscome to the tablewith
financing already arranged or with cash in
hand,self-funded.
“To a large degree, the larger investors
havetheirownmoneyalreadyassembledfor
investment,”saidSullivan.“Somecomefrom
very large institutional investors from Wall
Street.Weareseeingsmaller investorswho
dolookforlocalfinancingandourbankhas
beenactiveinthissegment,bothforcommer-
cialandresidentialproperty.”
PlazaBankhastwolocations,inSouthern
CaliforniaandinNevada,andhasseensome
in-migrationofclientsfromOrangeCountyto
realestate,oneoftheeconomicsectorshard-
esthitbytheeconomicdownturn.Thatmarket
isbeginning tostabilizeandrecover,butac-
quisitionsanddevelopmentloansforcommer-
cialrealestatewereprimarylinesofbusiness
forsomebanksandthatmarketwillprobably
neverrecovertothelevelsithadhitin2007.
“The typical commercial real estate as-
set declined in value 40 percent or more,
andrentalratesalsodeclinedbyasignificant
amount,” saidJohnSullivan,president,First
SecurityBankofNevada.
Whichmeansbanksarelookingforother
linesofbusinesstopursuesotheycansup-
portoperationsandmakeaprofit.Banksare
lookingatmoreconsumerlending,smallbusi-
nessloansandSBAlendingwherethere’sa
government guarantee to help back up the
loans being made. They’re providing more
servicestotheircustomers,andthey’rebeing
Nevada.“We’vebeenabletohelpthembe-
causewe’reinbothmarkets,whichisunusual
foracommunitybank,”saidGalloway.
In the newpost-recession banking envi-
ronment,bankersmayactassilentpartners
for thebusinesses theyworkwith, investing
timeandenergyandworkingwith thebusi-
ness, meeting quarterly to review financials
andprogressandtogiveadvice.
Changes Oneofthebiggestpost-recessionchang-
es to affect banks is the neweconomic en-
vironment. For many state chartered banks,
theirprimaryeconomicdriverwascommercial
Feature Story
CONTINUES ON PAGE 25
Gene
GallowayPlaza Bank
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17FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
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Rod Woodbury, Southern Nevada Health District • Eric Olsen, Gordon Silver • Susan Reisinger, 21st Century Oncology • Andrew Cash, Desert Institute of Spine CareRandal Shelin, Desert Radiologists • Don Giancursio, UnitedHealthcare • Puneet Garg, Gordon Silver • Robert Freymuller, Summerlin Hospital
LEFT TO RIGHT
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18 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
M. DONALD KOWITZ:Theindustryseesthe
needstochangethedeliverysystemandto
make use of every dollar in themost effi-
cientandquality-effectiveway.Also,there’s
somuch information out there for health-
careconsumersthatisconfusingandinac-
curate,whichcausespeopletomakedeci-
sionthatmaynotbetherightones.
ROD WOODBURY: In public health we are
facing the economic challenges just like
everybodyelse.TheACAissomethingthat
wearegrapplingwithtryingtofigureoutthe
uncertaintiesthatcomewithitandhowthat
impactspublichealth.Lookingtothefuture,
howcanwebetterpartnerwithothermedi-
cal providers for medical resources that
theymaynothave.
SHERIF ABDOU: The challenge that we’re
facing is rather simple but monumental:
torepurposeourmoraldirectionstoserve
asapatientcareindustry.Thesystemthat
webuiltdoesnothavethepatientinit;it’s
notaboutwhat’sbest for thepatients. It’s
what’sbest economically for theorthope-
dicsurgeonsorforthepublicly-accredited
largemedical group, etc. The system that
weneedisaboutwhetherit’sgoodforthe
patientornot.Thatshouldbethefirstques-
tionthatweanswer.
WHAT’S THE STATUS OF THE ACA AT THIS POINT?KOWITZ: It’snot likewemissed theenroll-
ment projections by 10 to 15 percent; we
misseditby60to80percent.Everyweek
thereare improvementsbuteverytimewe
movepast those initialproblems there’sa
wholedifferentseriesofproblems.There’s
a task force that the governor has orga-
nized thatmeets three times aweek, and
itdoesmake incrementalchangesbut it’s
stillbeenverydisappointinghowtherollout
occurred.
REISINGER: I have some patients that are
verysmartthatjustdon’thavehealthinsur-
ance.Theydon’tunderstandtheneedforit
evada’s healthcare industry
continues to see an increasing
numberofchallenges.Withthe
rollout of the Affordable Care
Act (ACA)andtheongoing issueofphysi-
cian and specialist shortages, healthcare
executives in the Silver State are working
to adapt while ensuring quality care for
theirfellowNevadans.AgroupofNevada’s
healthcare leaders recentlymet at the of-
ficesofGordonSilvertodiscussthetrends
andobstaclesfacingtheirindustry.
Connie Brennan, publisher and CEO
of Nevada Business Magazine, served as
moderator for the event. These monthly
roundtablesaredesignedtobringtogether
leaders to discuss issues relevant to their
industries. Following is a condensed ver-
sionoftheroundtablediscussion.
WHAT ARE THE GREATEST CHALLENGES IN HEALTHCARE?RANDAL SHELIN: Our industry brings to
mindtheexpressio,“howtodomorewith
less.” Unfortunately, that is more appro-
priate now than ever before. Everyone in
healthcareneedstoworkcollaborativelyto
find efficient healthcare delivery systems
that letusstretchthose limitedhealthcare
dollarsandprovidenecessaryservicesfor
ourcitizens.
SUSAN REISINGER: There’s not a day that
goesbywhereIdon’tseedelayoftreatment
becauseofuninsuredpatients.Areallybig
challengeistoeducatepeopleonwhatthey
needtodonowthattheACAishere.
DON GIANCURSIO: The sustainability and
the consequences of how the ACA is be-
ing funded in terms of cuts to Medicare,
the cost that gets passed onto consum-
ers and the impact on job creation. All of
thosethingstogetheraregoingtobecon-
sequencesthatwe’regoingtostarttosee
anddealwithin2014.
PUNEET GARG:The further implementation
andadoptionof theAccountableCareOr-
ganizations (ACO) model, seeking to cut
costs and focus more on quality metrics.
Challengeswefaceinfurtherimplementa-
tionofthatmodelarephysicianintegration,
dataintegrationandsharingrisksamongst
the various entities, information mobility
andsecurityandhowtoproperly leverage
lowerlevelpersonnelandthetechnologyto
achievecomparablequality.
Industry Focus
N
HEALTHCARE
19FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
untiltheygetsick.Itreallycomesdownto
education.
GIANCURSIO: The carriers have given the
Exchange leadership ideas and direction
and suggestions on how to do this as ef-
ficientlyaspossible.Wherewearetodayis
notwhereweneedtobe.It’sveryfrustrat-
ing. The resources necessary to develop
newproducts,toreconfiguresytems,tobe
prepared,tohandletheonslaughtofenroll-
mentjustisn’tthere.Therehastobeamore
efficientwaytodoitthanthecurrentmodel;
whatwe’redoingrightnowisarchaic.Atthe
heartof it,we’re trying togetpeoplecov-
eredwhoareeligibleandit’sfrustratingthat
wecan’t.We’regoing tocontinueworking
ashardaswehavetowork,butit’sjustdis-
appointing. Ihave tobelieve that this time
next yearwewill have had a better result
becausetheywillhavehadenoughtimeto
figure out how to do the basic electronic
datatransferthatwehadexpected.
KEITH BRILL:Half thecountryanda lotof
themediaisopposedtoanythingthathas
todowithObamaCare,eventhemediathat
mightbemoreleftleaning.Therearebusi-
nessmenandstatepolicymakers trying to
workon thisbutyouhave themediacon-
stantlytalkingaboutthenegativesofit.The
realityispeoplestillthinkthismaynothap-
pen yet or it’s notworth their time at this
point.
SHELIN: The ACA is bringing back funda-
mental changes, which probably would
havehappenedwithmarketforcesanyway.
Inthepast,weworkedwithpay-for-volume
whereprovidersgotpaidforeachstudyor
testwedid.We’rechangingthatparadigm
to pay-for-value or quality and, ultimately,
that’stherightdecisionforthecountryand
we’removingtowardstherightdirection.As
webuild thesesystems tobetter integrate
our delivery system and to becomemore
efficientandbetterquality,it’sawinforthe
patientbecauseyoucanreducetheredun-
danciesandthecosts.Ultimately,Ithinkit
will prove to be a positive for the country
but itwillbeaverydisruptiveanddifficult
processtogetthere.
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20 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
HOW IS THE QUALITY OF HEALTHCARE IN THE SILVER STATE?ABDOU: The Commonwealth Fund ranks
Nevada at 42nd and United Health Founda-
tion ranks us at 46th for quality of health-
care. There’s mediocrity and accepting
of mediocrity is hardwired for healthcare
in Nevada and we need to grow our way
out of this. Patients, doctors, nurses, sys-
tems – we settle, we accept and we make
a lot of money from mediocrity. We need to
change that.
SHELIN: The basic fundamental tools for
quality care are here. We’ve got phenome-
nal physicians successfully recruiting doc-
tors coming out of Duke, John Hopkins,
Stanford – these are doctors that can go
anywhere in the country but they choose
to come to Nevada to practice. Ultimately,
it’s how we build the relationships because
we can provide great care but it’s how we
coordinate the care between the general
practitioners and specialists and how that
care is delivered.
BRILL: The overall question for quality of
care is difficult. There are a lot of excellent
doctors here but it takes a certain volume
of doctors providing quality care to bring
more doctors here. Doctors typically stay
where they train and we don’t have a lot
of specialty programs. Even those we do
have are not going to meet the needs of our
state. We need to really focus on the quality
of care we already do have.
HOW SEVERE IS THE SHORTAGE OF CARE PROVIDERS?ROBERT FREYMULLER: The shortage will
be exacerbated by our success with the
ACA. If you enroll 200,000 people in Med-
icaid, much less private insurance products,
there’s not going to be a primary care deliv-
ery system to accommodate those patients.
ABDOU: A lot of the shortage is self-in-
duced. If you change the economics, there
will be a 20 to 30 percent drop in volume,
not in new patients, but in repeat visits.
Doctors who have financial incentives in
tests are 12 times more likely to order the
tests for the same diagnosis than it is for
the other group that doesn’t have the finan-
cial motive. The economics have impacted
our actions for a very long period of time
and we have taken it for granted.
SHELIN: One reason for the loss of attrition
is the spouses. If they’re not happy then
the doctors aren’t happy. We encourage
the spouses to come in during the inter-
view process because the last thing we
want to do is go through the expense and
effort only to have them not be happy and
leave. Usually they’ll come here because
it’s a good economic opportunity, but then
after a while it’s the quality of life that the
spouse doesn’t like. But we’re building a
better sense of community than we’ve had
in the past. We’ve been such a transient
city for years and years that now we’re fi-
nally becoming a more stable community
where people stay here and call it home.
FREYMULLER: [It’s] not just quality of life,
but also spousal employment. Our robust
business climate where there are spousal
employment opportunities as we diversify
and grow will be key, along with education
for the families.
BRILL: Even at the physician level decid-
ing where you’re going to practice, every-
thing is at the personal level. If you’re not
from there or train there, you need to know
someone there. Once you get a critical
mass of doctors from outside our com-
munity, people start to talk. It’s just going
to take time for us to build up good doc-
tors from outside the community who will
then go talk to their graduating residents to
come here.
HAS A SHIFT IN WHO DELIVERS PATIENT CARE AFFECTED PERCEPTION OF THE INDUSTRY? ERIC OLSEN: Most patients want to see the
doctor, not the physician assistant (PA) or
nurse practitioner (NP). That’s changing.
With the economics, you have to have more
PAs and more NPs.
ABDOU: The first mission is the bridge be-
tween expectations and reality. What we
didn’t do well with the system integration
is we didn’t set the expectations for the
patient. If you go to hospital committees,
they would say to never let the nurse prac-
titioners see the patient because they are
lower level. We have built the expectation
that seeing the nurse practitioner is a lower
level and if you allow patients to be seen
by NPs then you’re a bad hospital, medical
group, etc., which is not true.
GIANCURSIO: You’re going to have supply
and demand constraints. As more people
come into the system, if we were hugely
successful with Medicaid expansion and
the individual exchange, you’re going to put
almost 600,000 people in the healthcare
system and they’re going to want to see
Industry Focus HEALTHCARE
21FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
somebody. If an individual has a routine
typeofcaretheymaybetotallyfineseeing
thePAbecausetheywanttheeasiestand
quickestwaytogetcare.
ANDREW CASH:It’saparadigmshiftinthe
patient’sexpectationsandperceptions.It’s
going to take time and it’s going to be a
one-on-onebasisastheyindividuallyshow
uptoaclinicorhospitalandlearnwhatthe
newexpectationsare.
BRILL: Clark CountyMedical Society and
NevadaStateMedicalAssociationtestified
sayingexpandingtherolesofNPsisgreat
andit’swhatourstateneedstoexpanda
team-based approach for collaboration
and to allow more access in rural areas.
Butour statehasdecided that’snot true,
whichisabigconcern.They’restilldefining
attheBoardofNursingwhatthescopeof
practiceisforanursepractitioner.Alotof
the languageof the law is still sayingyou
shouldnothaveacollaboration.Forquality
care, physician providers and leadership
needtomakesureeveryoneisonateam.
WILL INDIVIDUAL MEDICAL GROUPS SURVIVE THESE CHANGES?CASH: Private practice primary care doc-
torsarebountifulbutquicklydiminishing.I
don’tthinkthey’llbehereinfiveyears,they
justcan’tcompete.
ABDOU:Neithershouldthey.Theyhavesat-
urated the fragmented,dysfunctional sys-
tem.Ifyoucreateasystemyoucanholdit
accountable,youcanmeasureit.Bigmet-
ropolitan areas should be dominated by
systems. Hospitals should be included in
that,integratedwithphysiciangroupsand
others. That systemneeds to start devel-
opingandbuilding.Allofthequalitydata,
especiallysurgicaldata,isrelatedtoalone
practice inoneplacewith thesame team
foralongperiodoftime.Theywillproduce
abetteroutcome.
WHAT IS THE FUTURE OF HEALTHCARE?GIANCURSIO:Thehealthcareconsumer in10
yearsisgoingtobedifferentthanthehealth-
care consumer we’re talking about today.
They’regoingtobemoretech-savvyandtech-
nologyisgoingtobemoreapartofthehealth-
caredeliverysystem,whetherit’stele-health,
tele-medicine,electronicmedicalrecords,etc.
Educationisgoingtobecriticalandpeople’s
expectationsaregoingtobedifferent.
SHELIN: Theeconomicsarewe’regoingto
havephysicianextenders.Byusingtechnol-
ogyandleveragingthat,wecanhelpthem
dobetterjobsaswell.Wecanhelpthephy-
sician extenders do the right thing for our
patients the first time. They’re there and
we’re going to have to integrate them into
oursystemandmakesureweguide them
tousethetechnologicalservicesproperly.
FREYMULLER: Coordinationofcareissyn-
onymouswithqualityofcare.Ifyou’repart
ofasystemwitharobustITplatform,ifthe
healthinsuranceexchangescometogether
wheretheprimarycareandspecialistsare
gettingalertssotheycantakepreemptive
or proactive action with patients, that’s
where it’s going to pull together and the
qualitywillcomefromthat.
Industry Focus
Nevada Department of Transportation (NDOT) has published a freight assessment evaluating key Nevada economic indicators and the state’s approximately 110 million tons of annual truck, rail, air and pipeline freight commerce to identify areas for potential future growth and development. The assessment is available on NDOT’s website.
IN BRIEF
22 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
MIRIANO RAVAZZOLOCEO
MB America, Inc.
TRAVIS CROWDERChief Professional Officer
Boys & Girls Clubs of Mason Valley
SHELLEY BERKLEYCEO & Senior Provost
Touro University NevadaTouro Western Division
RENO YERINGTON LAS VEGAS
HOW DID YOU FIRST GET INTOWHOLESALE DISTRIBUTION OFCONSTRUCTION MACHINERY?I started in corporate Europe where
Igainedextensiveexperienceduring
thattime.ImovedtoNevadain2002,
astheCEOofamulti-nationalcompa-
ny,afterthatIworkedasaconsultant
for several years and then in 2010, I
becameCEOofMBAmerica,Inc.
WHAT DO YOU LIKE MOST ABOUT YOUR INDUSTRY?WhatIlikemostabouttheindustryis
thatconstruction fuelsoureconomy,
anditfeelsgoodtoparticipateinthe
developmentofthefield.
IF YOU COULD BE REMEMBERED FOR ONE THING, WHAT WOULD IT BE?Iwanttoberememberedfordoingthe
bestIcanforthesakeofthecompany
Irepresentandallthepeopleinvolved.
WHAT IS A LITTLE KNOWN FACT ABOUT YOURSELF?ThatIhavearealaccent.
HOW DID YOU FIRST GET INTOYOUR PROFESSION?IstartedworkingforBoys&GirlsClub
in Carson City when I was 20 years
old as an Athletic Director. It was
full-timeworkanditwasworkingwith
kidswhichwasaperfectstorm!
WHAT OTHER TYPES OF WORK DO YOU ENJOY?Ihostadaily radiomorningprogram
inourareaonKSVL92.3FM. I have
donesofornearlyfiveyearsnow!
IF YOU COULD STOP TIME, WHAT MOMENT WOULD YOU WANT TO RELIVE OVER AND OVER AGAIN?Theday Imetmybeautifulwifeof20
years!Iamsoblessed!
WHAT WAS THE TOUGHEST LESSON YOU’VE LEARNED IN YOUR CAREER?Patienceforsure.Westruggledforseveral
yearstogetwherewearetodayandIwish
Iwouldhaveknownthenthatitwouldfeel
this good to seewherewe have come.
Thatbeingsaid,goingthroughthosedif-
ficulttimesprovidesmewithadeepap-
preciationofwherewearetoday!
WHAT DO YOU LIKE ABOUTYOUR INDUSTRY?Iamexcitedtoleadaninstitutionthatis
educating Nevada’s future healthcare
and educational professionals. Touro
is thestate’sbestkeptsecretand Iam
workingtochangethat.
WHAT WAS THE TOUGHEST LESSON YOU’VE LEARNED IN YOUR CAREER?ThebestlessonI’velearnedisthat“when
onedoorclosesanotheropens.”That is
what Ifindsoexcitingabout thisoppor-
tunityatTouro.Iamabletotaketheex-
periencesI’vehadthroughoutmycareer
inpublicandcommunityserviceandhelp
taketheuniversitytothenextlevel–pro-
viding high quality education, expanded
outreachinthecommunity,andenhanced
programsandservicesthatdirectlyben-
efitthecitizensofNevada.
IF YOU HAD TO CHOOSE ANOTHER PROFESSION WHAT WOULD IT BE?ALasVegasloungeact–whynot!
WHAT MOMENT WOULD YOU WANT TO RELIVE OVER AND OVER AGAIN?Thebirthofmychildren.
Face to Face MOVERS & SHAKERS
23FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
mployers in Nevada and every state have historically used unpaid interns for a variety of reasons, it being taken for granted that the research, filing
and coffee-schlepping were necessary steps to career growth. Now, as 2014 gets underway, a series of closely-watched lawsuits may mean that the army of interns may not be back next sum-mer—or at least not in the same capacity. It all started in 2011 when Eric Glatt and Al-exander Footman brought a class action against Fox Searchlight Pictures Inc. and Fox Entertain-ment Group, Inc. (collectively “Fox”). The two had worked as unpaid interns on production of the film Black Swan in New York. Their lawsuit contended that Fox violated labor laws by classifying them as unpaid interns instead of paid employees. A Department of Labor fact sheet helped the court evalu-ate whether interns at for-profit businesses fall within an ex-ception to the employer-employee relationship. The fact sheet lays out six criteria for determining when an internship may lawfully be unpaid:
1. The internship is similar to training that would be given in an educational environment (and not merely on-the-job training that employees receive).
2. The internship experience is for the intern’s benefit.3. The intern does not displace regular employees (but is
closely supervised by existing staff).4. The employer derives no immediate advantage from
the intern (and on occasion the intern may actually impede operations).
5. The intern is not necessarily entitled to a job follow-ing the internship.
The employer and the intern understand that the intern is not entitled to wages during the internship. In June 2013, the court found that Fox received the ben-efits of the plaintiffs’ unpaid work, which consisted of largely routine tasks and would otherwise have required paid employ-ees. While there was no evidence plaintiffs were entitled to jobs at the end of their internships, and plaintiffs understood
they would not be paid, the court found that plaintiffs were still improperly classified as un-paid interns and instead were “employees.” The benefits plaintiffs may have received—such as knowledge of how a production office functions or references for future jobs—were the results of simply having worked as any other employee works, not of internships designed to be unique-ly educational and of little utility to the employer. In the wake of the Glatt case, which is now on appeal, Hearst Corp., Donna Karan, NBC Universal, Inc., Warner Music Group Corp., Conde Nast and Gawker Media LLC have been sued in very similar cases. After the lawsuit was filed against it, publishing giant Conde Nast an-
nounced it was ending its internship program. These lawsuits may mirror a larger societal shift in the ac-ceptability of using unpaid interns. Recently, Sheryl Sandberg drew criticism for posting unpaid internship positions for her not-for-profit foundation, LeanIn.Org. (Although in fairness, the criticism may be exacerbated by her wealth and the foun-dation’s aim.) The exposure to employers for using unpaid interns can prove quite costly: unpaid wages and overtime can be recov-ered for a period of two years (three years in the case of a willful violation), and a court may double the amount owed, as liquidated damages. What then are employers to do? In the short-term, employ-ers should analyze their intern hiring practices in light of the six criteria listed above to determine whether an internship can remain unpaid. In the near future, employers should consider proactively implementing written policies shaping unpaid internship programs to ensure compliance with those criteria. From a non-legal perspective, employers may also wish to more fully weigh the economic and publicity pros and cons of using unpaid interns. While it is too soon to tell what the Glatt case and oth-ers might mean for local businesses and their own internships programs, come next summer there may be a few more ex-ecutives schlepping their own coffee.
ARE UNPAID INTERNSHIPSBECOMING A THING OF THE PAST?Robert Rosenthal is an employment attorney at Howard & Howard in Las Vegas.
Power of Attorney
Robert
RosenthalHoward & Howard
E
24 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
apitalism did not create poverty—it inherited it,” ob-served individualist philosopher Ayn Rand. Over the past centuries, capitalism has eradicated the previous conditions of widespread famine and star-
vation and has elevated the living standards of the poor to a level previously unheard of, even for kings. Today, even low-income Americans commonly enjoy cell phones, automobiles, a clean liv-ing environment, modern medicine and access to the world’s col-lected knowledge through the internet. Despite this evidence of capitalist progress, President Obama warns of “a dangerous and growing inequality…[that is]…the de-fining challenge of our time.” Senate Majority Leader Harry Reid adds, “There is no greater challenge this country has faced than in-come inequality. And we must do something about it.” Obama, Democrat leaders and some Republicans, including Nevada Sen. Dean Heller, have called for government to smooth out this “inequality” by extending unemployment benefits while “progressives” are also pushing to raise the national minimum wage. The new agenda promotes an idea that society’s most successful individuals achieve that success only at the expense of those whose achievements are more modest, and that this produces a growing gap between the rich and the nominally poor. This gap, we are implicitly told, would shrink if only our oh-so-benevolent politicians enact rigid price controls on labor, send bu-reaucrats to meddle with the decisions of small business owners and send workers more checks for not working. This is literally the plan. Yet, the central message behind the new agenda — that capitalism somehow favors only a handful of people — is demonstrably false. Consider data from the nonpartisan Congressional Budget Of-fice, which shows that, between 1979 and 2009, households in the bottom income quintile saw after-tax income growth of 44.8 per-cent. Middle-class households saw growth of 35.8 percent, while those in the top quintile saw after-tax income grow 72.8 percent. Those figures mean that living standards have increased for every-one, even if at slightly different rates. Even these objective figures, however, mask the ongoing move-ment of households from one income quintile to the next. Very rarely does an individual remain in the same income group throughout life.
The Census Bureau estimates that within just three years 38 percent of those in the bottom income quintile climb to a different quintile. Over the same three years, one-third of those in the top quintile fall to a lower quintile as new up-and-comers push them out. And, more than half of households in the middle three income quintiles move to a different quintile within three years. The fact is, statistics that only look at the difference in earning growth between the various income groups obscure the individual-istic nature of capitalism and create the impression that we all be-long to defined income classes that are in constant conflict. If, then, one’s position on the income scale isn’t determined by one’s position in previous years, what are the determining factors? Primarily, it’s the decision to work. David Henderson at the National Center for Policy Analysis ana-lyzed 2006 Census data and found that 81.4 percent of households in the top income quintile had two or more people working, while only 2.2 percent of those households had no one working. For households in the bottom quintile, only 12.6 percent had two or more people working, while in 39.2 percent of the households, nobody was working. So, if working is the key to income growth, then how do Sen. Heller and Democrat leaders argue that extending unemployment benefits —paying workers to not work — will help the economy? It won’t. The Organization for Economic Co-Operation and Development (OECD) Employment Outlook concludes, “It is well established that generous unemployment benefits can increase the duration of unemployment spells and the overall level of unemploy-ment.” The best economic “stimulus” would be curtailing the cur-rent disincentive to seek gainful employment. The Left’s narrative on the minimum wage is even more off the mark. Such a legal wage floor increases the difficulty of finding entry-level employment. That’s why economists Richard Burkhauser and Joseph Sabia found “no evidence that minimum wage increases… lowered state poverty rates” when they examined 28 states that increased mini-mum wages between 2003 and 2007. As Arizona congressman Jeff Flake says, “A minimum wage in-crease is good politics but bad economics.” And that, after all, appears to be what the new agenda is all about — a short-sighted effort to exploit general economic illiteracy for electoral advantage.
THE LEFT’S NEW AGENDA
Geoffrey Lawrence is deputy policy director at the Nevada Policy Research Institute.
MINIMUMWAGEHIKESANDUNEMPLOYMENTBENEFITSAREN’TTHEKEYTOPROSPERITY
Free Market Watch
C“
COMMENTARY
25FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
CONTINUED FROM PAGE 15
morecreative.“Allofwhichisgoodnewsfor
businessesworkingwithbanks,”saidBurns.
Thebankingindustryasawholeisdedi-
catingmoreresourcestoriskmanagement,a
changedriveninpartbynewregulationsbut
muchofitalsoself-imposed,saidShirey.
Bankersareworkingharderandsmarter.
Theycannolongersimplyadvertisetheirlow-
est rates and create loans. Today they dig
deeperthantheinitialrequestforfundstodis-
coverthetrueneedsoftheborrowerandad-
dressthoseneeds,whichsometimesrequire
asolutionthat’sdifferentthanwhattheclient
anticipatedinthebeginning.
“Sobankinghaschangedinthatwehave
to be real consultants in terms of coming
alongside clients and potential clients and
makingsureweunderstandwhattheirneeds
areandmeetthoseneedsasopposedtojust
respondingto‘whatareyourratesandwhat
doyoucharge?’”Wilcoxsaid.
Asforinterestrates,conventionalwisdom
says if theymoveatall in2014,they’llgoup,
thoughprobablyonlyslightly.It’salsonotreally
aquestionofifthey’llgoupthisyear,butwhen.
Creating a Future Thehope for 2014’sbanking industry is
continuedstabilizationandforbankstocon-
tinue improving regulatory status of safety
and soundness,meaning improving capital
levelsandincreasingthevolumeofqualified
loans.
ShireysaidNevadaStateBankwouldlike
toseemoredemandforcreditasaresultof
economic growth. “That’s what really fuels
demandforcredit–peoplegrowingbusiness-
es.We’dlovetoseemoreofthat,whichwould
helptheeconomyandthebankingindustry.”
“Nevadabanksareamongthebestcapi-
talizedinthenationbecauseofrequirements
puton those thathavesurvived through the
financialcrisis,”saidBurns.“Theyareincreas-
ingloangrowth,theaveragewas11percentin
2013,whichiswellabovethe4percentaver-
agenetloangrowthnationwide.Thereisre-
coverygoingon.Asbanksgobacktolending
andprovidingnewservice lines, theirprofit-
abilityimproves.”
“Banks are much more cautious about
lending,”saidSullivan.Thedayswhenbanks
would lend 80 percent of appraised value,
assuming the values would increase by 10
percent ormore per year, are gone, as are
practiceslikelendingonpropertiesthatdon’t
producecashflow,likespeculativecommer-
cialbuildingsandrawland.
“Yes,thereareopportunitiesbutthereal-
ityisthere’salotofcompetitionfromalotof
sources,”saidHendricks.“Competitionfrom
traditionalbanksandalternativelenders.”
“The basic principles of banking always
apply,”saidGalloway.
Feature Story
26 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
rofit and loss statements are a great tool to monitor the profitability and health of a company. At first glance they seem fairly simple; however, there are some important things to remember when work-
ing with these statements. There is real life, and there are taxes. They look alike but one is an orange and the other is a tangerine. The profit and loss statement typically looks at a company’s profitability from a tax perspective. Therefore, there are some important things to keep in mind when taking a brief analysis of the profit and loss statement. First, there is the income section. From a tax perspective, this is what is taxable and what is not. Obviously, any sales or fees charged are considered income. Money put into the company from owners’ contributions or borrowed money is not considered income. This is a common mistake that many new businesses make; counting capital contribution as income. Another common misconception occurs when looking at money that came in and then went directly out to a particular expense. Many assume that money is not taxed, justifying that, “I broke even, so I don’t need to report it.” All money from sales or fees charged is considered income; the money paid out is an expense. What is not taxed are owner contributions, sale of stock to shareholders and borrowed money for equipment for future growth and expenses. Second on a profit and loss statement is the cost of goods section. This section shows what it costs to provide the ser-vice or to purchase/make the product sold. If the company is a manufacturing company, the cost of the materials, labor, shipping and such would be included as the cost of goods. The third section includes expenses. There are two basic types of expenses, real and phantom. The best example of a real expense would be utility bills, payroll or any other type of expense that does not build the asset side of the balance sheet. Phantom expenses are expenses such as depreciation. Depreciation is not an expense that comes out of the bank account. Rather, it is an expense that is taken over time for an asset purchased, such as a computer. Some expenses are a hybrid of real and phantom. An ex-ample would be a mortgage payment on a piece of property. The tax expense would be the interest deduction, the phan-tom expense would be the depreciation and the principal
payment goes to the balance sheet to lower the liability. From a real life point of view, the mortgage payment is an expense. From a tax point of view, it is split. The profit and loss statement serves mainly as a snapshot of where the company stands from a tax point of view. When the profit and loss statement as a whole, it is important to have an understanding of and pay attention to ratios on the statement. For example, a wholesaler’s cost of goods would generally run between 45 to 55 percent of the total sales. Any deviation from that should be explainable through the inventory values on the balance sheet. If the inventory values remain the same and the cost of goods is higher, it’s time to begin asking questions to account for the difference. The ratios are different for each industry and can also assist the Internal Revenue Service determine if an audit is needed. Another useful aspect of profit and loss ratios is that they help company managers make more informed decisions. For example: If the rents are running around 20 percent of the gross income; are there any steps to get that particular ex-pense under control? The Internal Revenue Service has in-dustry standard ratios as a guideline and any deviation above the norm triggers an audit. This doesn’t mean you will not be entitled to the deduction; they will just want to take a look at it for accuracy. The last thing to consider is how the report is calculated: cash or accrual basis? Cash basis income is reported when re-ceived, and expenses are reported when paid. All individuals and sole proprietors report on a cash basis and it’s the easiest way to look at the profit and loss statement. It also gives a pretty good picture of where the company stands on a par-ticular date. An accrual basis reporting reports the income when billed and expenses when occurred. The accrual basis makes the tax return a little more complex. The accrual basis report gives a better understanding of what the companies short term future looks like since all the income expected and all the expenses expected are on the report. Profit and loss statements appear, on the surface, to be a simple overview of a company’s financial story however, a closer look reveals that these statements are very complex. When read correctly they can be an asset for any business in determining the financial future.
P
Profit & Loss
PROFIT AND LOSS STATEMENTSBy Al Wagner, President, Trinity Tax Consultants, Inc.SOUNDSSIMPLE.ISIT?
27FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
Las Vegas Named Among Top 10 Housing Markets in the Country
According to data compiled by HomeVestors and Local Market Monitor, Las Vegas is among the top 10 housing markets in the country for investing in single family homes. According to Local Market Monitor’s president, Ingo Winzer, job growth, particularly in lower paying jobs, population growth and low home prices are factors that have made investments in single homes as rental properties attractive to investors.
UNR’s Colleges of Business and Education Ranked Top Online Graduate Programs
The University of Nevada, Reno’s Col-lege of Business and College of Educa-tion both received recognition from the U.S. News & World Report ranking them among the top 100 schools in the country. The College of Business’s online gradu-ate program was ranked 75th in its cat-egory. The College of Education’s online graduate program was ranked 36th in its category.
Sunrise Health Hospitals and H2U Partner to Open Health Centers for Employees
Sunrise Health Hospitals and Health to You (H2U) have partnered to open three H2U health centers for hospital employee and dependents, approximately 8,855 individuals. MountainView and Southern Hills centers opened in Janu-ary with the final clinic at the Sunrise and Sunrise Children’s Hospital campus set to open in March.
Around the State
28 NEVADA BUSINESS MAGAZINE FEBRUARY 2014
Gregory
DeSartGeotechnical & Environmental Services, Inc.
BUILDINGNEVADA
29FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
BACK TOBASICS
By Jeanne Lauf Walpole
ARCHITECTSANDENGINEERSINNEVADA
Itmaynotusher in theboomingeconomy
thatNevadanswerebaskinginjustashort
decade ago, but architects and engineers
around theSilverState say they expect to
seetheappearanceofalightattheendof
therecessiontunnelthisyear.“Theoutlook
looksquitegood.Therewasalmostastopin
commercialconstructionandwe’reseeingit
pickupinalmosteveryaspect,”saysRobert
Finnegan, president of Finnegan Erickson
AssociatesinLasVegas.“Peoplearedoing
morespecificspaces.Also,theresortsare
doingvery largeremodels.”Asthetourism
markethasembracedoverallentertainment
coupled with the ubiquitous gambling, re-
sortshavehadtorespondtothisexpecta-
tionbyaddingmoreoptionssuchasspas,
retailshoppingandupdatedrestaurants.To
keepupwiththefiercecompetitionresorts
mustconstantlyupgradetomaintainthere-
quiredfreshlook.
CraigGalati, principal andpresidentof
LucchesiGalatiArchitects(LGA),sayshis
firmexperiencedsomewhatofarecovery
in 2013 and he expects that to continue
this year. “We’ve seen an increase in in-
quiries.Wehaveasix-monthbacklog,”he
explains.
Changeisintheairforrecessionsurvivors
becausetheymightbemorelikelytobelieve
someofthepositiveeconomicfiguresnow
being bandied about. “We keep hearing
newsthattheeconomyisbetter,”saysGreg
Erny of Architects+ in Reno. “Despite the
positive indicators thatmight be out there
though,everybodyisstillverycautious.”
Changemay also be in the air because
peoplehavebecomeusedtoaneconomic
situationthatisfarremovedfromtheyears
of explosive growth in Nevada. “A lot of
times recessions happen because people
pull back,”Galati says. “Thingsare known
now. People have figured out how to deal
withthings.”
Positive Indicators The Reno/Sparks NAI Industrial Market
Report for the fourth quarter of 2013 has
certainlyputsmilesonmanybusinessfaces
byreportingavacancyrateof9.1percentfor
theNorthernNevadaindustrialmarket.This
isthefirstquartertheratehasbeenbelow10
percentsince2008.Rateswellinexcessof
10percentwerecommonduringthedown-
turn.The reportalsoshowsgrossabsorp-
tionof1,668,673squarefeet,netabsorption
of1,449,351squarefeetwith41transactions
representinga16percentincreaseoverthe
five-yearaverage.
The news from Southern Nevada is
similarlyencouragingwithreportsfromthe
UniversityofNevada,LasVegas’sCenterfor
Business&EconomicResearchforecasting
that unemployment numbers will continue
to drop and revenueswill go up this year.
Building Nevada
Robert
FinneganFinnegan Erickson Associates
30 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
Although Nevada’s unemployment rate is
stillhighwhencomparedtootherstates,it’s
expected todip to 6.9percentby the end
of thisyear.Visitorvolume inClarkCounty
isexpectedtoreach43.7millionandgross
gaming revenues are projected to top out
at 9.8 billion this year. The county is also
expected to add around 1,600 additional
hotelroomsthisyear.
Although many building professionals
believeacornerisbeingturned,theydon’t
expecttheskylineoverNevadatobepep-
peredwithdozensofcranesperchedatthe
sitesofbrandnewhighrisesanytimesoon.
“There are renovations, demolitions and
upgradeswithlessnewconstruction,”says
KurtGoebel,seniorvicepresidentandenvi-
ronmentaldivisionmanagerinLasVegasfor
ConverseConsultants.
Therecoveryappearstobesomewhatbi-
ased,atleastfornow,onupgradesofexist-
ingpropertiesratherthannewconstruction
fromthegroundup.“Ownersaresayingthey
putoffdoinganythingandnowtheyhaveto
dosomethingtomeetnewlevels.It’sareal
healthycompetition,”Finnegansays.
WithofficesinReno,ElkoandClarkCoun-
ty, Converse has found work all over the
stateincludingthefollowingprojects:
•Sparks—Brownsfields community-wide
site assessment for hazardous sub-
stancesandpetroleumsites;
•Lyon County—EPA brownsfields com-
munity-wide assessment for petro-
leumproductsites;
•ClarkCounty—Asbestos,leadandmate-
rials surveyof theClarkCountyDe-
tentionCenter
•City of North Las Vegas—West Side
School rehabilitation and abatement
project design and asbestos abate-
mentoversightand;
•Henderson—Materials testing and in-
spectionservices forconstructionof
FedExGround.
Other construction projects that are ex-
pectedtoprovideworkincludetheShopsat
Summerlin,Bill’sGamblin’Hall(formerlythe
BarbaryCoast),ResortsWorld(formerlyEch-
elonPlace)andtheUnionVillageinSouthern
Nevadaalongwiththe$50-millionrenovation
ofJohnAscuaga’sNuggetinSparks.
So far the work seems to be coming in
from both public and private sources, ac-
cording to the engineers and architects.
“We do a fair amount of public work and
alsosomeprivatework,”Galatisays.“Most
oftheprivateistenantimprovements.”
Typicalof theprivatework is Investment
CounselCompany’s recent renovationand
expansion in Las Vegas. “We just finished
theirspace.Theytookanother4,000square
feetanddidaremodelonthewholespace,”
Galatisays.Hisfirmisalsoworkingonanew
15,000-square-footparishcenterforSt.An-
thonyofPaduaCatholicChurch.
Some new private construction indi-
cates a revival in the interest for retire-
menthousing. “We’reworkingona400-
unit luxuryadulthighriseinHenderson,”
Finnegan says. “We’re really bullish on
this. Housing is the reason. There are
more things todohere [inSouthernNe-
vada]andit’seasiertogetaroundthanin
Phoenix,” he says. Finnegan is happy to
reportthatthe30+employeesinhiscom-
pany are busy withmore than 100 proj-
ectsonthebooks.
“Owners are saying they put off doing anything and now they have to do something
to meet new levels. It’s a real healthy competition.”
—Robert Finnegan
The Grand Bazaar Shops by Juno Property Group
31FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
Building Nevada One of the best indicators of a turn-
around incommercialconstruction is that
many engineering and architectural firms
are in a hiring phase for the first time in
years.Theysaytheamountofworkcom-
inginnowwillsupportadditionalworkers.
ConverseConsultantsdropped to20em-
ployees from a high of 50, but is looking
to fill twomorepositions.Geotechnical &
EnvironmentalServices,Inc.isdownto32
workers from a high of around 60, but is
lookingtohiremore,accordingtoGregory
DeSart,presidentofGeotechnical.
Partoftheproblemofbalancingthenum-
berofemployeeswith theamountofwork
is the loss of workers that came with the
recession.Ernyexperienced theexodusof
architects from the state in hispositionas
chairmanoftheNevadaStateBoardofAr-
chitecture.“We’veseenasignificantlossof
licensed architects, but it’s coming back,”
hesays.DeSartjusthopestofindqualified
people for his open positions. “The talent
justleftwiththejobs.There’sstillashortage
ofgoodengineers,”hesays.
The Future As they contemplate the future with re-
newed optimism, architects and engineers
hope that the current uptick will lead to
continuedgrowthaswegoforward.“Inmy
opinionthere’sastrongdegreeofpsychol-
ogyandthere’smoreconcreteenergy.Peo-
plegettiredofnegativityandwanttocreate
theirownreality.It’ssomewhatofasnowball
effect.There’smorediscussionaboutposi-
tivethings,”Goebelsays.
Italsoseemsthattheenthusiasmandbe-
liefinthefutureofNevadaisback,although
maybenotatquitethesamefeveredpitchas
duringtheboomyears.“IstillthinkNevada
hasa tremendousamountofpotentialand
untappedresources.There’smorediversity
thanwhatwerealize.This isacritical time
andwehavetomakesureNevadaremainsa
destinationstate,”Goebelsays.
Construction professionals point out a
numberofspecificindustriesthatcanbeuti-
lizedtocreategreaterdiversityandgrowth.
Theseincludemedicaltourism,hightech,al-
ternativeenergy, retirementhousing,manu-
facturinganddistributionalongwiththetra-
ditionalpillarsofgamingandtourism.DeSart
believesthattheconstructionofInterstate11,
whichisintheplanningstages,willbeofbig
benefittothestatebyconnectingPhoenixto
LasVegasstartingattheMexicanborderand
continuingontoCanada.“Thisroadwillbe
hugeforusinthefuture,”hesays.
Erny expresses concerns about the
threat of government regulation and the
continued scarcity of investment dollars
that could jeopardize economic growth.
FormanyyearsNevadahasbenefitedfrom
the flight ofbusinesses fromoverly taxed
andregulatedCalifornia.“Ibelievethemar-
ketshouldseek itsownlevelandthe less
governmentthebetter,”hesays.
Lessons Learned Galatiacknowledgesthatduringtheboom
yearsmostbusinesseswerefatandhappy.
Timesaredefinitelydifferentnow,however,
and a noticeable learning curve is in place
regardingpriorattitudes.“Idon’t thinkwe’ll
everthrowcautiontothewindandsaythat
we’rerecession-proof,”Goebelsays.Inaddi-
tiontoemployingamorecautiousapproach
to their projects, construction profession-
alssay theyare trying toworksmarterand
withgreaterefficiencies.“Wearemuchmore
awareofhowwespendourmoney.Welook
atevery level toget thebestvalue,butnot
necessarilythecheapest,”DeSartsays.
“Thequalitypieceisevenmoreimportant.
Weareawareofneedingtogivehypergood
servicetoourclients,”DeSartadded.
Despitetheroughroadstraveledinrecent
years,architectsandengineerssaythatthe
lightsarestillburningbrightlyinNevadaand,
attheendoftheday,thecharacteristicsthat
madeitadestinationformanywillcontinue
toservethestatewellinthefuture.
“One of the most important things is
that as businesseswe support eachother
and keep common sense as a core value.
Weneed to rememberour rootsandwhat
makesusunique,”Goebelsays.
Craig
GalatiLucchesi Galati Architects
SAY WHAT
According to a recent Rasmussen Report survey of 1,000 likely voters, 58 percent of respondents said that the cost of healthcare will rise under the new law. Additionally, 26 percent believe the quality of care will get better under the new law and 74 percent said it was at least somewhat likely that the new law will cost more than first estimated.
32 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
Lease, RetailADDRESS1381W.SunsetRd.,89014TENANTCaféZupasLANDLORD RemingtonCommercial1.LLCDETAILS3,720SF;$1,013,886for10yearsTENANT’S REPJasonOtterandBrendanKeatingofTheEquityGroupLANDLORD’S REPStanWasserkrug,IntercapitalAssetManagement
Lease, RetailADDRESS2556WigwamPkwy.,89074TENANT24HourFitnessUSA,Inc.LANDLORDCentraPecosLegacy,LLCDETAILS42,010SF;$2,520,600forfiveyearsLANDLORD’S REPScotMakerofColliersInternational
N
Sale, RetailADDRESSRanchoVerdeApartmentsParcel3,89106BUYERMadisonDevelopmentGroup,LLCSELLERRanchoVerdeApartments,LLCDETAILS1.2acres;$850,000APN139-28-402-004BUYER’S REPDanHubbardofCushman&WakefieldCommerceSELLER’S REPClarkCountyDevelopmentUSA,LLC
NW
Project, Vacant LandADDRESSHuckleberryPark,NorthwestLasVegasDEVELOPERFocusPropertyGroupDETAILSTheProvidencemasterplannedcommunitybrokegroundforitsthirdpark.HuckleberryParkwilljoinThePromenadeandKnickerbockerParkinnorthwestLasVegas,covering1,200acres.HuckleberryParkwillfeatureaneventsfield,outdoorstagearea,dogparksofvarioussizes,sportsandplayareaswithadditionalroomforfuturedevelopments.The$2millionprojectisbeingbuiltinsuchawaythatitwillprotectthenaturalenvironmentwhileofferingresidentsampleoptionsforfitnessandoutdoorrecreation.Theparkisscheduledtoopeninlate2014.
Loan, Multi-FamilyADDRESS2316SpringGroveDr.,89108TENANTTerraceCourtDETAILS68units;$3.9millionrefinanceforfiveyears,30yearamortizationTENANT’S REP ThomasJ.PowellandMichaelDobinsofNorthMarq
H
Sale, OfficeADDRESS3039W.HorizonRidgePkwy,89052BUYERDenco,LLCSELLERVantageatHorizonRidge,LLCDETAILS6,754SF;$1,725,000APN177-35-510-029BUYER’S REPWilliamSkupaandGinoVincentofMINTPropertyGroup,Ltd.SELLER’S REPJosephDeSimoneofFirstFederalRealtyDesimone
Sale, Vacant LandADDRESSStephanieSt.andWigwamPkwy.89074BUYERLVCSDSaddleLLCSELLERWGStephanieLLCDETAILS4.61acres;$1.5millionAPN178-15-310-011BUYER’S REPBrianSorrentinoofROICommercialRealEstateSELLER’S REPCathyJonesandPaulMiachikaofSunCommercialRealEstate,Inc.
Sale, IndustrialADDRESS151GallagherCrestRd.,89074BUYERDesignsforHealth,Inc.SELLERSuperBrands,LLCDETAILS42,292SF;$3.3millionAPN178-15-510-003BUYER’S REPDeanWillmore,SIORofcolliersInternationalSELLER’S REPBenMillisofNewmarkGrubbKnightFrank
Lease, OfficeADDRESS2340CorporateCircle,89074TENANTQuestSoftware,Inc.LANDLORDTechPark6,LLCDETAILS7,800SF;$975,294forfiveyearsTENANT’S REPAmericanNevadaRealtyLANDLORD’S REPTaberThillofColliersInternational
O
Sale, Multi-FamilyADDRESS3665NeedlesHwy,Laughlin89029BUYEROmninentCrown,LPSELLERConAmGroupDETAILS536units;$12.9millionAPN264-28-211-001
S
Project, RetailADDRESS325ConventionDr.,89109DETAILSTheLasVegasMarriotthascompletedits$4.3millionprojectupdatingthehotel.Theguestroomrenovationsincludednewlocksystems,in-roomsafesandadditionaloutlets.Furniture,lightinganddécorhavealsobeenupdated.Additionally,theLasVegasMarriottadded600SFofnewmeetingspacetoitssecondfloor.Laterthisyear,allotherexistingmeetingspaceswillundergorenovations.
Project, RetailADDRESSLasVegasBlvd.andFlamingoRd.,89109DETAILSTheGrandBazaarShops,scheduledtoopeninFall2014,willfeaturecloseto55,000SFofoutdoorshopping,restaurantsandentertainmentrightattheheartoftheLasVegasStrip.PioneeredbyLaurenceSiegelofJunoPropertyGroup,theconceptwasinspiredbythevariousopen-airmarketsfromaroundtheworld.OtherpartnersofthisprojectarePerellaWeinbergPartnersAssetBasedValueStrategy,GlimcherCapitalGroupandCaesarsEntertainment.TheGrandBazaarShopswillfeatureover150shops.
Sale, Multi-FamilyADDRESS10200GilesSt.,89183BUYERThePraediumGroupSELLERLVPYLELLCDETAILS320units;$41.9millionAPN177-28-301-022BUYER’S REPCBRichardEllisSELLER’S REPHendricks-Berkadia
Sale, RetailADDRESSTropicanaCentreat3035to3375E.TropicanaAve.,89121BUYERArilexTropicanaAssociatesLLCSELLERGreggWilliamsDETAILS589,191SF;$39.8millionAPN162-25-501-008SELLER’S REPJoeBonifattoandFrankMarrettiofColliersInternational
[BC] BOULDER CITY [E] EAST [H] HENDERSON [N] NORTH [NW] NORTHWEST [O] OTHER [S] SOUTH [SW] SOUTHWEST [WC] WASHOE COUNTY
DEAL TRACKER
33FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
89166
89149
89129
89134
8914489138 89128 89108
89131
89130
89085 89087
89165
89115
89156
8911089101
89104 89142
89122
8901189014
89074 89015
89002
89005
89012
89052
89044
89084
89031
89032
89030
89081
89086
89143
89145
89117 89146
8910
2
8918
389
109
89147 89103
89118 8911989120
89121
8913989139
89141
89178
89179
89161
8913
5
8914
8
8914
8
89107 8910
6
N
NW
SW
H
BC
E
N
S
Lease, RetailADDRESS2880BMeadeAve,Suite360,89102TENANTVeriFoneInc.LANDLORDEdenLasVegas,LLCDETAILS6,226SSF;$180,456for2yearsLANDLORD’SREPLeoBiedermannofCushman&WakefieldCommerce
Lease, RetailADDRESS6344W.SaharaAve.,89146TENANTInternationalChurchofTheFourSquareGospelLANDLORDWestSaharaAssociatesDETAILS16,400SF;$488,392for5yearsLANDLORD’SREPJosephAndersonandNeilDelaCruzofMDLGroup
WC
Sale, RetailADDRESSSparksGalleriaShoppingCenter89436BUYERPineTreeCommercialRealty
DETAILS633,498SF;$26.2millionBUYER’SREPMichaelCleemanofCohenRealEstateSELLER’SREPRickKaiserofCohenRealEstate
Sale, IndustrialADDRESS400WesternRd.,Reno,89506BUYERECOWindowsSELLERHawleyTrustDETAILS61,152SF;$1,750,000APN082-600-04BUYER’SREPDanOster,SIORofNAIAllianceSELLER’SREPDaveSimonsen,SIOR,CCIMandJ.MichaelHoeck,SIORofNAIAllianceIndustrialProperties
Sale, IndustrialADDRESS7788WhiteFirSt.,Reno,89523BUYERAJRocket,LLCSELLERF&JPropertiesLLC.DETAILS2.056acresand11,000SF;$1.8millionAPN212-050-19SELLER’SREPScottShanks,SIORandDominicBrunetti,CCIMofNAIOfficePropertiesGroup
Lease, IndustrialADDRESS3132-3152HighlandAve.,89109TENANT3152HighlandDrive,LLCLANDLORDHughesFamilyLLC&CouryFamilyLLCDETAILS47,656SF;$805,000forthreeyearsTENANT’S REPCurtisBunceofDiversifiedRealtyGroupLANDLORD’S REPAmyOgdenandDanielleSteffenofCushman&WakefieldCommerce
SW
Sale, IndustrialADDRESS4325W.PatrickLn.,89118BUYERVegasCloseoutsLLCSELLERLeumiB,LLCDETAILS7,104SF;$625,000APN162-31-712-000BUYER’SREPJamesGriffisofMDLGroupSELLER’SREPEricLarkinofMusserCapitalRealEstateAdvisors
Red Report
34 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
rials.Allcommunicationmodesshouldbe
managedsothebrandstaysintact.
“Youhavetoprotectyourbrand,and
youhavetoholditaboveallelse,”Kirvin
said. “Sometimes that means making
hard decisions. Sometimes that means
sayingno,inourcase,partingwayswith
clients who don’t fit. Sometimes that
means really recognizing who you are
not.”
It helps to have someone internally
who oversees the brand daily,monitoring
andensuringit’sbeingmaintainedandad-
dressinganyrelatedissues.
Don’t Damagethe Brand ... “If there is an employee not living
the brand or if someone tries to use or
change your logo, that’s addressed im-
mediately,”saidNeighbors.
thebrand.Tellthemhowtoincorporatethe
brand into theirwork daily. Consider cre-
ating a guide that specifies the pertinent
dosanddon’ts.Forexample,for individu-
alsprovidingcustomerserviceviaphone,
detailwhatthebrandvoiceshouldbeand
howtheyshouldrespondtocommoncus-
tomerquestions,problemsorstatements.
Also, ensure the brand is reflected in
corporatepoliciesandproceduresinterms
of hiring, job descriptions, expectations,
client interactions, compensation, perfor-
mancereviewsandthelike.Havefrequent
conversations with employees about the
company’svaluesandbrand.
“Everyone has to knowwhat the end-
gameis,whattheultimategoalis.Youhave
tohaveacommitment,”saidDarcyNeigh-
bors, founder andCEOofCIMMarketing
Partners and author of the book, “Mar-
keting Fusion: 7 Elements to Ignite Your
Growth.”CIM is a Las Vegas-basedmar-
keting,advertisingandpublicrelationsfirm
that focuses on the professional services
industry.
Next is creative implementation of the
brand. This is where the logo and other
suchelementsthatportraythebrand—tag-
line,colorscheme,jingleandmore—come
intoplay.Theseareusedtoevokethebrand
feeling intargetaudiences.Otherexternal
communications—marketing,socialmedia,
advertisingandpublic relations—canhelp
portraythebrandandsolidifyitsposition.
A business’ employees, from theCEO
to the janitor, should live andbreathe the
brandalways,asbrandscan take time to
developandrequireregularsupporttotake
hold.Abrandshouldbecommunicatedin
everyaspectofoperations,fromstaffinter-
actionswithclientsandsocialmediames-
sagestocustomerserviceandprintmate-
Cover Story BRANDING YOUR COMPANY
CONTINUED FROM PAGE 11
CallKendleKendle Walters, vice president of Nevada Business Magazine, can help younavigate branding, marketing and image-building for your company. With aMasters in Media Studies, Kendle has over 10 years of marketing experienceand is more than qualified to assist in taking your business to the next level.
YOUR MARKETING RESOURCE
Contact Kendle702.267.6328 [email protected]
35FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
Cover Story
If a brand is not being routinely de-
liveredupon,itcansendmixedmessag-
es. This creates confusion in theminds
of potential and current customerswho
couldthenruntoacompetitor.Thesay-
inggoes,“aminuteonthelips,foreveron
thehips.”Brandsaredamaged inmuch
the same way; it can happen rapidly,
muchquicker than it took toestablish it
andcantakealongtimetorepair,ifitcan
berepairedatall.
“Whenpeoplegetawayfromaconsis-
tentbrand,itbecomesverydilutedandnot
synchronized,” Neighbors added. “That’s
whenthingsfallapart.”
Ideally,anestablished,triedandtested
brand is preferred before a crisis arises,
whichcanrangefromadisgruntledpatron
to a defective product. Further, generally,
avoidrebrandingormodifyingabrandmid-
crisis,asittypicallydoesn’twork.Rareex-
ceptionsexist,ofcourse,whereit’seffec-
ness,attitudesandpropensitytobuy,with
respect to company andproducts/servic-
es,haschanged.Ifabrandisn’tachieving
requiredobjectives,simplyadjustit.
“Mostofthetimeitisworking.[Theorga-
nizations]arejustnottrackingit,”saidBelz.
Brands are only as effective as the or-
ganizationthat isadministiringthem.With
therightplanningandresearchatthebegin-
ning, implementation and follow-through a
brandisoneofthebestandmosttried-and-
truemethodsofacompany’ssuccess.
SAY WHAT
The “Welcome to Fabulous Las Vegas” sign is now powered by solar energy. The effort to install three solar trees with a total of 18 photovoltaic cells to exclusively power the sign was led by Green Chips and the Clean Energy Project.
tive to, say, announce new management,
new approaches and/or a new brand.
Those cases tend to be successful when
theexistingbrandisseverelydamagedor
off-base.
Howacrisis ishandledcan reveal the
company’s brand, so stay true to it dur-
ing thatphase.Additionally,when insuch
asituation,ensureallemployeeshavethe
keymessagingpointsandknowthestory.
Otherwise,disseminationofconflictingin-
formationcouldcreateabranddisasteron
topoftheoriginalproblem.
After a brand has been in place for a
while, periodically measure its effective-
nesstodeterminethebrandismakingthe
desiredimpact.Mostoftencompaniessee
positive results from a branding program
prettyquickly.Analyzesalesorotherper-
formance indicators or survey the public
and/or customers to havean ideaof how
thebrandisworking.Learniftheiraware-
www.christuckerlv.com | 702.501.6879
DESIGNMODERN
LOGO | CORPORATE | AD DESIGN
36 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
Afterarecordbreakingthirdquarter,vi-
brantactivitycarriedintothefourthquarter
resulting in very strong numbers and an-
othersignificantdrop invacancy.Theyear
beganwithvacancyabove13.5percentand
again this quarter, landlord’s prayerswere
answeredandthevacancyratedroppedbe-
low10percentforthefirsttimesincethe1st
quarterof2008.Themarket issquarely in
thehealthyrangeat8.11percentexcluding
subleasespace.Neverless,itwillbedifficult
tocarrythismomentumduetolowavailabil-
ityhowever,allsignsarebullish.
For the year, fifteen transactionswere
completedwithusersinexcessof100,000
square feet. This number is significantly
higher than prior years. A total 48 trans-
actionswerecompletedinQ42013witha
grossabsorptionof1,638,272square feet
almost150percentofthefiveyearaverage
and almost double last year. The average
transactionsizewasdownslightlyfromQ3
butarespectable40,000squarefeet.
Netabsorptionforthequarterwasaro-
bust1,607,714square feet,5 timeshigher
than 2012. Rental rates are beginning to
seeupwardpressurerisinganaverage$.01
persquarefootpermonthinthelastquar-
ter.Thishascertainlybeenan impressive
yearoverallwith a return to respectability
andprosperity.
Barring any economic blindside, the
yearshouldseecontinuedstrongactivity,
lowervacancy,higherrentsandmorecon-
struction than has been seen since 2007.
With an abundant pool of investors now
lookingatRenoasanalternativetohigher
pricedmarketsthetimeisnowtodispose
ofassetsshouldonewanttoplacetheiras-
setsinotherareas.
In2013,theLasVegasindustrialmarket
reported the highest net absorption since
2007. The vacancy rate at theendof 2013
was 13.8 percent, which represents a de-
cline of 0.4 percent from the prior quarter.
Comparedtoayearago(Q42012),theva-
cancyratereportedanevenmoresubstan-
tialdeclineof2.6percent.Withnocomple-
tionsduringthefourthquarter,inventoryre-
mainedflatat107.5millionsquarefeetwhen
comparedtothethirdquarterof2013.How-
ever,duringtheyear,approximately934,000
squarefeetwasaddedtothemarket,which
ismorethan2010,2011and2012combined.
The industrial sector reported approxi-
mately 398,200 square feet of positive net
absorptionduringthefourthquarterof2013.
Netabsorptionfortheyearwasover3.6mil-
lionsquarefeet,whichissignificantlyhigher
thantheroughly897,100squarefeetofnet
move-insreportedin2012.
Theamountof industrialspaceactively
under construction reached 1.2 million by
thecloseofthefourthquarterof2013,which
is the highest it has been since the third
quarterof2008.Anumberofprojectscon-
tinuedtomakeprogressduringthequarter,
includingFedExatSouth15AirportCenter
(296,000 square feet), Konami Gaming’s
expansion (193,400 square feet), Nicholas
& Company (182,900 square feet), VadaT-
ech (70,000 square feet) and the Shetakis
Wholesalersaddition(65,600squarefeet).
The industrial sector is now reporting
overonemillionsquarefeetofdevelopment
activityforthefirsttimesincethethirdquar-
ter of 2008. There are relatively few large
propertiesleftonthemarket,whichisprov-
ingtobeachallengeforselectedcompanies
consideringlargeinvestmentsinthearea.
Commercial RE Report
INDUSTRIALSUMMARYFOURTHQUARTER2013
SOUTHERN NEVADA NORTHERN NEVADA
37FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
he“third”estimate for thirdquarter2013showsU.S.realgrossdomesticproductincreasingatanannualizedrateof4.1percent,animprovementoverthe3.6percentgrowthreported
inthe“second”estimate.Higher levelsofper-sonal consumption expenditures and nonresi-dential fixed investment were responsible fortheupwardrevision.Residentialinvestment,netexports,andstateandlocalgovernmentspend-ing also made positive contributions. Federalgovernmentspendingmadenegativecontribu-tions.Housingstartswereupsubstantiallyyear-over-year,andhousingpricescontinuedtorise.Auto/trucksalesand retail saleswerealsoupyear-over-year.Consumerconfidenceandcon-sumersentimentroseforthemostrecentdata. The Nevada economy evidenced mostlypositivesignalsforthemostrecentdata.Sea-sonally adjusted, statewide employment in-creasedby9,500jobsfromOctobertoDecem-ber, and itwas up 1.8 percent year-over-year.Taxablesalescontinuedtoshowstronggrowth,up6.2percentfromlastyear.Totalairpassen-gerswere up 0.7 percent over the same timeperiod.Gamingrevenuealsoexperiencedgainsforthemonth,up11.9percentfromNovember2012. ForClarkCounty,seasonallyadjustedem-ployment rose from October to November by4,900 jobsandwasup2.4percent year-over-year. Total passengers at McCarran Airportwere up 1.1 percent from a year earlier. No-vembervisitorvolumewasup4.4percentfromayearago.Gamingrevenuewas12.7percenthigher in November than a year earlier. ClarkCounty’s taxable sales for October were 8.3percentabove those fromayearearlier.Resi-dential construction permits increased fromSeptember toOctober.Commercial construc-tionpermitsremainedatalowlevel. ThemostrecentdatashowmostlypositivesignalsforWashoeCountyaswell.Seasonallyadjusted,Reno-Sparks’employmentincreasedby1,000jobsfromOctobertoNovember.Totalemploymentisupfromayearago,by0.9per-cent. The seasonally adjusted Reno-Sparks’unemploymentratefellfrom9.2percentto9.0percent.Comparedtoayearearlier,Novembervisitorvolumewasup9.6percent.Totalairpas-sengersweredown5.3percent fromOctober2012.GamingrevenuesforNovemberwereup14.7percentfromayearearlier.Residentialcon-structionpermitsfellinOctober,whilecommer-cialconstructionpermitsremainedlow. TheU.S.economyexperiencedapickupingrowth for thirdquarter2013.Aweaknationaleconomy is affecting Nevada in the form ofslowinggrowthintourism.Despitetheslowingtourism, taxablesalescontinue tomakegainsatthestatelevel.Nevada’semploymentisalsoshowingrelativelystableyear-over-yeargains.
Sources: Nevada Department of Taxation; Nevada Department of Employment, Training, and Rehabilitation; UNR Bureau of Business and Economic Research; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/Tahoe International Airport; Las Vegas Convention and Visitors Authority; Reno-Sparks Convention and Visitors Authority; U.S. Department of Commerce; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Federal Reserve System.
*Change in percentage rate, **Reflects the Reno-Sparks MSA which includes Washoe and Storey Counties, ***Recent growth is an annulized rate
Ryan T. KennellyUNLV Center for Business
and Economic Research
GROWTH
DATE LATESTUNITS PREVIOUS YEAR AGO RECENT YEAR AGO COMMENTS
1,175.8
9.0
3.894
875.97
4.044
92.55
4.368
850.5
9.2
2.876
756.95
637
33
3.727
63.13
3.472
193.8
9.0
0.508
59.47
63
18
0.262
13.79
0.321
136.877
6.7
233.9
235.2
118.4
106.2
432.3
16.31
1.091
15,839.3
102.202
-34.252
1,848.36
-2.83
2.65
1,166.3
9.3
4.071
955.33
3.805
90.60
4.619
845.6
9.2
2.976
839.75
569
42
3.473
61.51
3.736
192.8
9.2
0.541
59.79
176
23
0.284
13.84
0.370
136.803
7.0
233.8
234.9
118.0
105.7
429.4
15.15
0.889
15,679.7
101.812
-39.328
1805.81
-2.95
2.57
1,154.5
10.0
3.667
782.63
4.015
93.26
4.463
830.3
10.2
2.656
671.61
595
14
3.687
64.04
3.325
192.0
10.0
0.465
51.85
60
20
0.277
13.95
0.293
134.691
7.9
231.1
231.3
116.3
105.6
412.9
15.26
0.842
15,534.0
99.025
-46.422
1426.19
-3.01
1.56
0.8%
-0.3%
-4.4%
-8.3%
6.3%
2.2%
-5.4%
0.6%
0.0%
-3.4%
-9.9%
12.0%
-21.4%
7.3%
2.6%
-7.1%
0.5%
-0.2%
-6.2%
-0.5%
-64.2%
-21.7%
-7.4%
-0.4%
-13.3%
0.1%
-0.3%
0.0%
0.2%
0.3%
0.4%
0.7%
7.7%
22.7%
4.1%
0.4%
-12.9%
2.4%
0.12%
0.08%
1.8%
-1.0%
6.2%
11.9%
0.7%
-0.8%
-2.1%
2.4%
-1.0%
8.3%
12.7%
7.1%
135.7%
1.1%
-1.4%
4.4%
0.9%
-1.0%
9.2%
14.7%
5.0%
-10.0%
-5.3%
-1.1%
9.6%
1.6%
-1.2%
1.2%
1.7%
1.8%
0.5%
4.7%
6.9%
29.6%
2.0%
3.2%
-26.2%
29.6%
0.18%
1.09%
Up Over Year Ago
Reduced
Up Over Year Ago
Up Over Year Ago
Up Over Year Ago
Down from Year Ago
Down from Year Ago
Up Over Year Ago
Reduced
Up Over Year Ago
Up Over Year Ago
Up Over Year Ago
Low and Volatile
Up Over Year Ago
Down from Year Ago
Up Over Year Ago
Up Over Year Ago
Reduced
Up Over Year Ago
Up Over Year Ago
Up Over Year Ago
Low and Volatile
Down from Year Ago
Down from Year Ago
Up Over Year Ago
Up Moderately
Reduced
Up Moderately
Up Moderately
Up Moderately
Up Over Year Ago
Up Over Year Ago
Up Over Year Ago
Up Strongly
Up Moderately
Up Over Year Ago
Year-Over-YearDeficit Decrease
Up Strongly
Less Negative
Up Over Year Ago
000s, SA
%, SA
$billion
$million
million persons
million gallons
million persons
000s, SA
%, Smoothed SA
$billion
$million
units permitted
permits
million persons
million gallons
million persons
000s, SA
%, Smoothed SA
$billion
$million
units permitted
permits
million persons
million gallons
million persons
million, SA
%, SA
82-84=100, SA
82-84=100, SA
89.06=100, SA
2005=100, SA
$billion, SA
million, SA
million, SA
2009$billion, SA
97.01=100
$billion, SA
monthly close
%, NSA
%, NSA
2013M11
2013M11
2013M10
2013M11
2013M10
2013M10
2013M09
2013M11
2013M11
2013M10
2013M11
2013M10
2013M10
2013M10
2013M10
2013M11
2013M11
2013M11
2013M10
2013M11
2013M10
2013M10
2013M10
2013M10
2013M11
2013M12
2013M12
2013M11
2013M11
2013Q3
2013Q3
2013M11
2013M11
2013M11
2013Q3
2013M12
2013M11
2013M12
2013M11
2013M11
DATA
Employment
Unemployment Rate*
Taxable Sales
Gaming Revenue
Passengers
Gasoline Sales
Visitor Volume
Employment
Unemployment Rate*
Taxable Sales
Gaming Revenue
Residential Permits
Commercial Permits
Passengers
Gasoline Sales
Visitor Volume
Employment **
Unemployment Rate*
Taxable Sales
Gaming Revenue
Residential Permits
Commercial Permits
Passengers
Gasoline Sales
Visitor Volume
Employment
Unemployment Rate
Consumer Price Index
Core CPI
Employment Cost Index
Productivity Index
Retail Sales Growth
Auto and Truck Sales
Housing Starts
Real GDP Growth***
U.S. Dollar
Trade Balance
S and P 500
Real Short-term Rates*
Treasury Yield Spread
Note: NSA = Not Seasonally Adjusted, SA = Seasonally Adjusted
Business IndicatorsNEVADA
CLARK COUNTY
WASHOE COUNTY
UNITED STATES
T
38 NEVADABUSINESS.COMNEVADA BUSINESS MAGAZINE FEBRUARY 2014
What do you enjoy most about being abusiness owner and/or executive?
“The MDL Group supports every owner, executive and employee in giving back to the community. For example, I’m serving as CALV president, which allows me to interact with all kinds of people from within and beyond the real estate industry.”
“Each day presents opportunities to serve others and to find new and innovative ways to make my clients’ visions become realities.”
“Being able to connect with and gain feedback from our customers, then take that information and use it with my own ideas to create a new concept of products and services of which all customers can then enjoy.”
“The thing I love the most about being a business owner of Hofbräuhaus Las Vegas is seeing a vision come to life. There is nothing better than knowing you are providing an authentic experience for your guests that also doubles as a passion.”
“As a mother of two small children, I love owning my own business because of the flexibility, freedom and opportunity it allows. Working hard to build and grow my own business and creating my own success is extremely fulfilling.”
Alicia R. Ashcraft | Managing Partner, Ashcraft & Barr | LLP
Jeremy Stamis | President/Director, Jerry’s Nugget Casino
Hayim Mizrachi, CCIM | President, Commercial Alliance Las Vegas and President and Principal, MDL Group
Stefan Gastager | President, Hofbräuhaus Las Vegas
Jim Brock | Founder,Simple Computer Repair
Lauren Eldik | Owner, Studio Clicks Photography
“When I have a thought or an idea about a product or service, I can put it into action without asking for permission.”
Last Word
39FEBRUARY 2014 NEVADA BUSINESS MAGAZINE
40 NEVADA BUSINESS MAGAZINE FEBRUARY 2014
In 2013, we approved more SBA 504 loans* than any other bank in Nevada. If you have goals for your business, don’t go it alone—recruit a champion. Whether you want to fi nance a new building, secure equipment or manage your cash fl ow, we can help.Call today.
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nsbank.com/SBA | 866.784.8031
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*Loans subject to credit approval. Restrictions apply. Ranked by the U.S. Small Business Administration by number of loans approved in Nevada during SBA fi scal year 2013. MEMBER FDIC