Friday, Feb. 25, 2011 | 2 a.m.
Beyond the Sun
- Is low-taxes sales pitch enough to bring businesses to Nevada? (2-11-2011)
- NDA now has prime spot to recruit companies to move to Southern Nevada (6-18-2010)
- Nevada Development Authority to recruit companies at convention center (6-9-2010)
- Q&A: Mike Skaggs, executive director of the Nevada Economic Development Commission (4-2-2010)
- Campaign seeks to lure Calif. businesses to Vegas (8-6-2009)
The Nevada Development Authority is supposed to lure businesses to Nevada and diversify our economy, but lately its CEO, Somer Hollingsworth, has had more success embarrassing the Nevada taxpayers that support the authority to the tune of a $1 million per year.
A recent authority ad campaign used talking primates to mock California’s tax-and-spend, anti-business climate, in a campaign more fit for selling salty snacks or an Internet company circa 1999.
Then there’s the billboard the authority put up near Los Angeles International Airport: “Congratulations Governor Brown! It’s déjà vu all over again.”
Get it? Probably not. It’s supposed to be mocking Brown, but people are either too young to remember the Gov. Jerry “Moonbeam” Brown of his first tenure in the 1970s, or they liked that rather prosperous period in California’s history, or they just like Brown, who they re-elected last year in a landslide.
Also, the billboard is near the airport on the heavily Democratic west side of Los Angeles. A billboard like that near John Wayne Airport in Republican Orange County? Maybe. But near LAX? Foolish.
Other authority campaigns not known for their gravitas have featured a double-decker bus that toured California giving out rubber peanuts, and a spontaneous dance troupe in Los Angeles.
In a statement to the Sun, Hollingsworth said the ads were meant to create media attention on a limited budget, which they did indeed do, although it’s not clear it’s the attention we really want. It makes us look deeply unserious, which we already struggle with anyway.
Thankfully, the authority announced last week they were taking down the billboard and moving the ad campaign in a different, more positive direction.
That’s all well and good, but it’s still not clear Hollingsworth gets it. I recall a Hollingsworth speech in April 2008 that ridiculed California while extolling all the greatness of the Nevada economy and business climate. April 2008: What was happening then? Our economy had begun its rapid demise, the whole Ponzi scheme unraveling by the day. It was the equivalent of throwing a keg party in your backyard while the bank is posting a foreclosure notice on your front door.
And that’s the thing: It’s not just the ad campaign; it’s also his public statements, which don’t put us in a very good light.
He offered up this amusing rationale to my Sun colleague David McGrath Schwartz for the talking monkey ads: “It was the only way we knew. We had to do it with monkeys — we had to use monkeys, for God’s sake!”
In a recent interview with the Las Vegas Review-Journal, Hollingsworth recounted being expelled from Nevada Southern University, which was the predecessor to UNLV, before landing at Eastern New Mexico University — because he had an uncle on the board of regents. Then he volunteered that he got a job at a Las Vegas bank because his dad knew somebody. Fun story, but we have a name for these types of transactions — “juice” — and I don’t think we want to send the message that this is how things are done in Las Vegas.
Just after recounting his college career, Hollingsworth said: “I like where the university system is going.” Slashing programs, chasing off our best faculty, raising tuition. What’s not to like?
In another remarkable interview, this again with my colleague Schwartz, Hollingsworth explained why the only way to market Nevada to out-of-state businesses is by selling our status as a tax haven with a light regulatory burden: “I certainly can’t sell our education system, can I? I have to have something.” True enough.
(UNLV economist Alan Schlottmann told me what several other economists have told me, because it’s in the data: Taxes are on the list of things that matter to a firm when they are considering moving, but pretty far down the list, below more important issues such as proximity to markets, logistics, and quality of labor. )
The NDA can point to some successes. During the boom years, it had contact with hundreds of companies that moved here, which in turn created thousands of jobs. What’s not known, however, is how many would have come anyway.
In 2010, according to the NDA, it helped bring 23 companies and more than 2,000 jobs, although clearly that didn’t offset the massive job losses we’ve experienced since 2007. Glenn Christenson, its chairman, says it has brought 10,000 jobs in five years, and tourism’s share of the workforce has dropped from 24 percent to 17 percent in the past five years, although that could be because the gaming industry has shed jobs so quickly.
Matthew Schissler, CEO of the promising stem cell company Cord Blood, offered praise for Hollingsworth and said in a statement, “Without Mr. Hollingsworth’s involvement, Cord Blood America would most likely not be in Nevada today.”
And I’ll say this about Hollingsworth: He has loyal friends. Public relations executive Sig Rogich says Hollingsworth is dedicated and hard working, and he praised the ad campaign for its ability to generate buzz. Christenson said, “Few people are more passionate about our community than Somer, and particularly with respect to diversifying our economy.” The ad campaign is old news, he said.
In any case, in Carson City and Las Vegas, among people in business and government, a low rumble is beginning to build against Hollingsworth. They are questioning, at least privately, whether he really has what we need right now.
According to Hollingsworth, he needs more money — a lot more — to sell Nevada. He wants $1 million per month instead of a $1 million per year.
“I’m sold on this state. We’re simply the best,” Hollingsworth told my Sun colleague.
The question is whether he is trying to delude us, or himself?
Having covered political campaigns, I can tell you, this is always what the failing candidate says. It’s not failed policy. We’re just not selling it. We heard this from Republicans during the worst of the Iraq war and from Democrats as the recession dragged on during 2009 and 2010.
Do we have a marketing problem? I suppose. But we also have more fundamental problems, and if Hollingsworth isn’t able or willing to recognize them, we should find someone who is.