Gatski Commercial - Nevada Business Magazine · Gatski Commercialcontinues to raise the bar, being...
64
Transcript of Gatski Commercial - Nevada Business Magazine · Gatski Commercialcontinues to raise the bar, being...
Gatski Commercial continues to raise the bar,being awarded the coveted assignment tomanage the Pavilion.
Gatski Commercial currently has under contracta portfolio of approximately 4 million squarefeet comprised of over 100 properties.
A MARK OF EXCELLENCE10801 West Charleston Blvd.
Las Vegas, Nevada 89135
Management is efficiency in
leading your company up the
ladder of success;
Leadership determines whether
your ladder is leaning against
the right wall.
Follow the Leaders:
• City National Bank
• Hill International, Inc.
• LandAmerica Commercial Services
• Station Casinos
• UBS Financial Services, Inc.
Leasing By:CB Richard Ellis(702) 369-4800
4755 Dean Martin DriveLas Vegas, Nevada 89103Phone: (702) 221-8226
Fax: (702) 221-1256www.gatskicommercial.com
Professionally Managed By:
4 November 2007
placed next to them in baseball’srecord books. If Lynette Boggs andLacy Thomas are convicted, theyface prison time.
The shame of being exposed as acriminal can even cost lives. J. Clif-ford Baxter, the former vice chair-man of Enron, made close to $22million by exercising stock options,but when the scandal broke, hecommitted suicide. One of the peo-ple implicated in the UMC contractinvestigation killed himself shortlybefore he was scheduled to testifyto police.
These people were all exposed asbeing dishonest, but not everyonewho cheats, lies or steals getscaught. However, the first lesson tobe learned is that when you sacrificeyour integrity to win, you’ve al-ready lost. Even if you’re neverfound out, you’ll spend a lifetimelooking over your shoulder and feel-ing guilty.
Companies like Enron, Arthur An-dersen and WorldCom make head-lines, but it’s important to realize
C O M M E N T A R Y
Character Counts in BusinessResolve to Do the Right Thing
L Y L E E . B R E N N A NPublisher
he latest example in thesports field is Olympictrack champion MarionJones. After denying
doping allegations for years, shewas finally forced to admit she hadbeen lying. Home run king BarryBonds and Yankee slugger Jason Gi-ambi have been accused of usingperformance-enhancing drugs, and2006 Tour de France winner FloydLandis may lose his yellow jerseybecause of a positive drug test.
In the local political arena, formerClark County CommissionerLynette Boggs is facing charges oflying on campaign reports aboutwhere she lived and using campaignfunds to pay babysitting fees. Shenow faces two felony counts of per-jury and filing false documents. Ifshe goes to jail, she’ll join fourother former Clark County commis-sioners now in federal prison (DarioHerrera, Erin Kenny, Mary Kincaid-Chancey and Lance Malone).
Business scandals have notslowed down much since Enron andArthur Andersen made headlines in
2001. Lacy Thomas, former CEO ofUniversity Medical Center (UMC)in Las Vegas, is being investigatedfor allegedly awarding no-workcontracts to friends back home inChicago. Junior Johnson, whose LasVegas-based company, PurchasePro,was involved in an accounting scan-dal in 2001, is on trial again, thistime on charges of stock fraud, con-spiracy, witness tampering and ob-struction of justice.
What lessons can we learn fromthese sordid stories? It seems thatthe people involved were doingwhatever they could to reach a goal– a sports championship, a politicaloffice, a large amount of money –and they were willing to sacrificeanything to get it. Unfortunately,one of the things they sacrificed wastheir integrity.
What consequences will theyface? The International OlympicCommittee is preparing to wipeMarion Jones’ name from the recordbooks and strip her of all her cham-pionship medals. Barry Bonds’achievements will have an asterisk
Nearly every day another scandal comes to light – a sports figure using perfor-mance-enhancing drugs, a politician taking bribes, a business defrauding customers. It’s enough to make people wonder if integrity and character are asextinct as the dinosaurs.
Continued on Page 8
T
6 November 2007
Nevada Business Journal is a division of Business Link, LLC. 375 N. StephanieSt.,Bldg. 23, Suite 2311, Henderson, NV 89014. It is listed in Standard Rates andData, #20A-Business-Metro, State and Regional. TopRank Nevada – AnnualStatewide Book of Lists is a publication of Nevada Business Journal.Advertisers should contact Sales at (702) 735-7003, or write to: Nevada BusinessJournal, 375 N. Stephanie St., Bldg. 23, Suite 2311, Henderson, NV 89014. Demo-graphic information available upon request. Month-to-month circulation may vary.Nevada Business Journal is published monthly with one additional issue each year.Subscription rate is $44.00 per year. Special order single-copy price is $7.50. TopRankNevada – Annual Statewide Book of Lists, a compilation of lists which have ap-peared in Nevada Business Journal over the past 12 months, is published on an an-nual basis.All contents ©2007 copyright, and reproduction of material appearing in NevadaBusiness Journal and TopRank Nevada – Annual Statewide Book of Lists is pro-hibited unless so authorized by the publisher.CHANGE OF ADDRESS: POSTMASTER: Send address changes to Nevada BusinessJournal, 375 N. Stephanie St., Bldg. 23, Suite 2311, Henderson, NV 89014. Sub-scribers please include previous address or mailing label. Allow six weeks.EDITORIAL SUBMISSIONS: Address all submissions to the attention of April McCoy.Unsolicited manuscripts must be accompanied by a SASE. Nevada Business Jour-nal assumes no responsibility for unsolicited materials.DISCLAIMER: Editorial views expressed in this magazine, as well as thoseappearing in area focus and industry focus supplements are not necessarilythose of the publisher or its boards.
PUBLISHERLyle E. Brennan • [email protected]
PUBLISHER / CEOConnie Brennan • [email protected]
COOThomas Patchin • [email protected]
ASSOCIATE EDITORApril McCoy • [email protected]
ART DIRECTORJoe Thomasula
CIRCULATION DIRECTORMark Keays • [email protected]
RESEARCH / RANKING [email protected]
WEB EDITORMcKensie Keever • [email protected]
ONLINE MARKETING DIRECTORHarry Benson • [email protected]
CONTRIBUTING WRITERSDennis Hetherington • Steven Budin
Kathleen Foley • J. Bradd Greene • Mark Keays Tuan Samahon • R. Keith Schwer • Michael Sullivan
Thavaroth To • Jeanne Walpole • Craig Walton
ADVERTISING / SALESScott Grover • [email protected]
Sheri Lautherboren • [email protected] Perkins • [email protected]
EXEC. ASSISTANT TO PUBLISHERHollie Howard • [email protected]
CORPORATE OFFICE375 N. Stephanie St., Suite 2311 • Henderson, NV 89014
(702) 735-7003 • FAX (702) [email protected]
NORTHERN NEVADA ADVISORY BOARDChuck Alvey • EDAWN
Krys T. Bart • Reno Tahoe Airport AuthorityTom Clark • Tom Clark Consulting Company
Connie Fent • Community RepresentativeValerie Glenn • Rose Glenn Group
Rick Gray • Fallon Convention and Tourism Authority
Web Site: nbj.com • nevadabusiness.com TopRank Nevada: topranknevada.com
A division of BUSINESS LINK, LLC
C O V E R : Nevada ranks 47th for access tohealthcare. Will the proposedUnitedHealth Group acquisitionof Sierra Health Services improvehealthcare in the Silver State? Getan update on the acquisition onpage 12.
Photo: Opulence Studios
B U I L D I N G N E VA D A :Green building or environmentallyfriendly building is becoming main-stream among Nevada's developers.Kenneth Smith, founder of Glen,Smith & Glen, is one of the leaders inthe industry and among other experts interviewed in the story.
Photo: Opulence Studios
S P E C I A L R E P O R T : The city of Sparks continues to evolve as the city of promise.
November 2007 • Volume 22 • No. 11
November 2007 7
B U I L D I N G N E V A D A
4 CommentaryLYLE BRENNAN
Character Counts in Business Resolve to Do the Right Thing
10 Business Up Front• More Than a Temporary Fix• U.S. Economy Needs Confidence Boost• Personal Relations Still Rules
11 Face to FacePatrick Egan, Egan Commercial Real Estate
67 Free Market Watch CommentarySTEVEN MILLER
Nevada Tax MythsMisconceptions Allow Politicians to Dodge Accountability
68 Money ManagementSTEVEN BUDIN
401Ks The Best Plan For Your Business?
70 State The IssuesTUAN SAMAHON AND CRAIG WALTONShould judges be appointed rather than elected?
71 Expert AdviceJ. BRADD GREENEInsuring a Greener Future Protecting Your Business
72 Nevada Briefs• Expanding Radiation Capabilities• Paramount Bank Opens in Las Vegas• Las Vegas Ranks as One of Nation’s More Affordable Markets• Commerce CRG Announces Office Division• Advanced Information Systems Launches• Carson River Community Bank Surpasses $26 Million
73 Vital SignsDoctors Need Insurance, TooA Program For Doctors, By Doctors
75 Inside PoliticsMICHAEL SULLIVAN
Gambling on EducationNSEA Seeks to Increase Gaming Tax
76 Tech PageTHAVAROTH TOSearch Engine OptimizationAn Important Online Marketing Tool
77 People FirstMARK KEAYS
Making New Employees SuccessfulThrough Mentoring
78 Business IndicatorsR. KEITH SCHWER
50 It’s Hot to be GreenEnvironmentally Friendly Building
JEANNE LAUF WALPOLE
64 Commercial Real Estate Market ReportSecond Quarter 2007 – Industrial
65 Faciliteq Architectural InteriorsCreating Efficiency One Project at a Time
66 Building Nevada News in Brief• Green Valley Corporate Center Strives for LEED Certification
• Dermody Properties Acquires 50 acres
• Las Vegas Welcomes Britain’s Largest Retailer
• RE Investment Company’s New Building
• First Phase of Tahoe-Reno Industrial Center Completed
F E A T U R E S
12 Healthcare Check-upThe UnitedHealth Group Acquisition of Sierra Health Services
DENNIS HETHERINGTON
20 Judge Not…How Businesses Can Avoid Lawsuits
KATHLEEN FOLEY
25 Industry Focus: Accountants
C O N T E N T SD E P A R T M E N T S
25
8 November 2007
that companies don’t make deci-sions – decisions are made by indi-vidual people who are faced withchoices. People face choices everyday that reflect their true character.It may be something small, likewhether to take home office sup-plies, or something that will impactthousands of lives, such as drainingthe company’s retirement fund.Usually, people who end up makinghuge mistakes start out on a slipperyslope of cheating “just a little bit”until it becomes a habit that leadsthem straight to disaster.
In a world full of dishonest busi-ness people, character and integritycan be your secret weapons. MarkS. Putnam of Global Ethics Univer-sity puts it this way: “You have todecide to take the moral highground even if you’re the only hon-est person in sight. An honestly runbusiness is something you canleverage to your advantage. Theknowledge that you deal fairly andhonestly with your customers is acommodity that has significantvalue. Be proud of it. Hang your haton it and make it your motto andsignature.”
However, doing the right thingcan sometimes cost you money inthe short term, or put you at a tem-porary disadvantage with unscrupu-lous competitors. In these cases, it’simportant to stand your ground andkeep a firm grip on your principles.
Resolve today to carefully consid-er your business decisions withethics in mind. In your heart, youprobably know which choice is bet-ter, but if you need help making a de-cision, ask someone you respect fortheir advice. If you’re still in doubt,consult your Bible. It’s been a goodbusiness guide for centuries.
COMMENTS email: [email protected]
Continued From Page 4
10 November 2007
The business world is chang-ing to incorporate technologyinto day-to-day interactions,
meaning that managers must remainon top of the newest innovationswhile encouraging workers to main-tain connections on a personal level.Peter Handal, president, chairmanand CEO of Dale Carnegie Trainingsaid technology can be an effectivetool to enhance practices already inplace in the workforce. Although in-novative technology offers greatways to conduct business, managersare encouraged to remember thatpersonal relationships are truly thekey to driving business results.
The Small Business ResearchBoard (SBRB) U.S. SmallBusiness Confidence Index
dropped to 43 during the third quarterof 2007. This is a decline of threepoints from the previous quarter, ac-cording to reports issued. Businesses inthe Northeast, the Midwest and theSouth were the businesses that con-tributed to the third quarter decline.Each of those regions reported a de-creased confidence index signifyingtheir concern about prospects for im-provements in their business during thenext 12 months, according to the re-port. More than 800 small businessesparticipated in the SBRB poll.
The use of temporary workerstoday is now being includedin the long-term planning ef-
forts of a majority of companies. Atone point, it was viewed primarily asa stop-gap measure, but now 71 per-cent of executives polled in a newsurvey, said this flexible staffingpractice has a place in their overallhuman resources budgets. Only 28percent of executives said that theydid not plan on incorporating the useof temporary employees into theiroverall budget, and 1 percent saidthey didn’t know.
U.S. Economy Needs Confidence Boost
More Than a Temporary Fix
BUSINESS UP FRONTPersonal Relations
Still Rules
November 2007 11
FACE TO FACE
Owner/BrokerEgan Commercial Real Estate
Reno
Years in Nevada: 37
Years with Firm: 10
Type of business:Commercial real estate brokerage, with afocus on multi-family and investmentproperty.
Biggest Business Challenge: Our transactions tend to have a lot of mov-ing parts – scheduling inspections for buy-ers, appraisers and lenders, as well as thirdparty groups, verifying financial informa-tion which makes it challenging.
What do you like best about your job? Working with my two sons has beengreat. They get exciting deals early on intheir careers, and I truly enjoy the energythey bring to the office.
How do you spend your time when you’re notworking? Hiking, hunting, skiing, runningmarathons and traveling. I am recentlymarried and love every minute of mytime with my wife, four kids and fivegrandchildren.
Best Business Advice: If you truly love what you do, don’tquit. In commercial real estate you areabsolutely going to have some roadblocks and challenges.
What would you like your legacy to be? Work hard, stay humble and thank peoplefor the opportunity to work with them.
What has been the biggest change in North-ern Nevada since you started your firm? Two things: competition and specializa-tion. At 53, and having been in thisbusiness for more than 25 years, I cansee that there are more people than everwanting to get into this field.
Patrick Egan
Las Vegas was abuzz in late August when a runaway railroad tanker car loaded with chlorine
gas was headed for the heart of town. Had it crashed, it could have been a catastrophe.
Fortunately, the car was stopped and disaster was averted.
Before that chlorine gas tankerbroke loose and threatened tospill its deadly contents, how-
ever, another train, figurativelyspeaking, was bearing down onNevada and is still on track. Thatmetaphoric train is the UnitedHealthGroup’s proposed friendly takeoverof Sierra Health Services, a transac-tion now under review by the U.S.Department of Justice.
If and when the “train” gets here,will it bring significant enhanced ben-efits and improvements in the deliveryof healthcare, as Sierra Health andUnited maintain, along with propo-nents Consumers First, Nevada Al-liance for Retired Americans andmedical provider Fremont MedicalCenters? Or will it bring market dom-inance – a monopoly known as“monopsony” – that could ultimatelyresult in higher premiums and
reduced benefits, as feared by theAmerican Medical Association(AMA), Nevada State Medical Asso-ciation, Service Employees Interna-tional Union, Gov. Jim Gibbons andAssembly Speaker Barbara Buckley.That is the question – and it comes ata time when the nation and Nevada ismired deep in a healthcare crisis.
Premiums for employer-sponsoredhealth insurance have soared an aver-age of 6.1 percent in 2007, less thanlast year’s 7.7 percent increase, butstill 64.8 percent higher than the over-all 3.7 percent rise in workers’ wages.The jump is also more than double the2.6 percent inflation rate, according tothe 2007 Employer Health BenefitsSurvey conducted by the Kaiser Fam-ily Foundation and Health Researchand Educational Trust.
“We’re seeing some moderation inhealth cost increases, but premiumsfor family coverage now top $12,000annually,” said Kaiser President andCEO Drew E. Altman. “Every year,health insurance becomes less afford-able for families and businesses,” heexplained. “Over the past six years,the amount families pay out-of-pock-et for their share of premiums has in-creased by about $1,500.” Nation-
12 November 2007
November 2007 13
Cover Story: Healthcare Check-Up
wide, according to Kaiser, the numberof companies offering health benefitsto their employees fell from 66 per-cent in 1999 to 60 percent this year.While there was no decrease in thenumber of large firms of 200 or moreworkers providing healthcare cover-age, the percentage of companies withthree to nine workers that offeredhealth benefits fell from 56 percent in1999 to just 45 percent in 2007, andfrom 65 percent to 59 percent forcompanies with three to 199 workers.Even in firms offering benefits, not allemployees are eligible.
Looking ahead, Kaiser reported that21 percent of employers surveyed ex-pect to raise workers’ premium contri-butions next year; 13 percent are“very likely” to increase office visitcost-sharing; 12 percent will boostdeductibles; and 11 percent anticipateraising prescription drug cost-sharing.Unfortunately, data for Nevada and
other individual states usually trailsby at least two years. What is knownis that 19.6 percent of Nevadans areuninsured compared to the nation-wide average of 15.8 percent.
Nevadans are hammered daily aboutthe lackluster performance of thestate’s schools – low test scores, insuf-ficient funding and low graduationrates. But if written testimony submit-ted by Assembly Speaker Buckley andAssemblywoman Susan Gerhardt isaccurate, the state’s healthcare systemneeds an overhaul. According to thetwo assembly women, unnamed “re-cent studies reveal the following se-vere deficiencies:”• Nevada ranks 47th for access tocare;• Nevada ranks 51st in quality of care;• Nevada is last for immunizationcoverage for children under age 3; • Nevada ranks 45th in access tophysicians – approximately 25
percent below the nationwide median– and has one of the lowest physician-to-population ratios;• Nevada ranks 49th in nurses – also25 percent below the U.S. median;• Nevada is 41st for mortality rates.
Whether you accept these figures ornot, few dispute the need to insuremore Nevadans and provide them withaffordable, as well as better qualityhealthcare. Is UnitedHealth Group thewhite knight with the remedy? Or willit exacerbate an already daunting chal-lenge facing Nevada’s employers, med-ical providers and the insured. SierraHealth Services, betting on the former,has laid its reputation on the line.
“Everybody benefits from thismerger,” said Jon Bunker, Sierra’spresident and chief operating officer,who will rise to CEO for United’snew Southwest Region once the trans-action is complete. He echoes Sierra’sfounder, Dr. Anthony M. Marlon,
14 November 2007
Cover Story: Healthcare Check-Up
chairman of the board and chief exec-utive officer, who said he is confidentthe combined companies will “gener-ate significant benefits for all of ourstakeholders as we work to improvethe delivery of care across the health-care system.”
“Sierra is predominantly a Nevada-based company, so most of our directprovider contracts or networks arewith Nevada physicians and otherhealthcare providers,” said Bunker,while pointing out that United has in-surance products in every state in thenation which gives it a large, broadnetwork of contracted physicians andhospitals. “Our ability to tap into theircontracts and networks, and extendthem to our employers and members,whether they are traveling, whetherthey are employed around the coun-try, or if they just want to receive theirhealthcare in Arizona, Utah, Califor-nia or somewhere else – whatever the
reason, they will now have the oppor-tunity to do so. Under Sierra, thoseopportunities were limited becauseour network was limited to Nevada.”
Other projected benefits forNevadans, said Bunker, include accessto leading-edge, consumer-based tech-nology which Sierra doesn’t have theresources to invest in or create. “Physi-cians and other healthcare providerswill benefit because United is knownfor providing great data and feedbackon clinical outcomes.” Long-term ca-reer employment opportunities, main-tains Bunker, will be enhanced be-cause of what United can provide, notonly because of its size, but also itsmanagement depth. “United is a fairlyyoung company and that provides lotsof opportunities for lots of people.”
He insists that the merger will notresult in a wholesale loss of jobs forcurrent Sierra employees. “Whilethere are certain positions that are
duplicative, such as investor relations,chief financial officer – positions ofthat nature – those would be the onlypositions subject to possible reduction… 15 or fewer.”
Bunker said the merger was “co-ini-tiated.” Sierra Health had reached apoint in its existence – which can betraced back to 1972 – where it neededeither to expand into a bigger regionalor national company, or become partof an existing one. Concurrently, henoted, United was looking to augmentits presence and offerings in Nevada.“We had a nice market position. Theywere underperforming here, and Ithink the combination of the two iswhat led United to us,” said Bunker.
Ken Burdick, United’s presidentand CEO, said United’s primary moti-vating factor in acquiring Sierra is thebrand and reputation of Sierra and itsaffiliate, Southwest Medical Associ-ates, which he called Nevada’s largestmulti-specialty medical group prac-tice. “Sierra is a financially strong or-ganization with very stable operationsand systems, and has a long and well-recognized history of consistently de-livering high-quality, affordablehealthcare in Nevada.”
Burdick avows the combined com-panies will create opportunities tobetter serve consumers in a number ofareas, including:• Offering a full spectrum of healthbenefit programs and services forcommercial and government employ-ers – ranging from large multi-sitecorporations to small local businesses– as well as for individuals;• An extensive portfolio of options andservices to address the needs of partic-ipants in government-sponsored pro-grams, including older Nevadans in avariety of Medicare programs, andNevada state Medicaid beneficiaries;• Diversified service options dedicat-ed to specialized healthcare needssuch as behavioral, dental, vision andpharmaceutical benefits.
November 2007 15
Cover Story: Healthcare Check-Up
billion in superior technology over thepast several years to enhance andstreamline healthcare administration,and improve quality and safety for itsmembers and providers,” he said, not-ing that 20 million United Healthcarecustomers now have electronic IDcards that simplify the process ofchecking eligibility. The cards, hesaid, facilitate access to an automaticupdating of patients’ personal healthrecords, a benefit that will be extend-ed to Sierra’s members.
United’s “enormity,” however, iswhat alarms acquisition critics. Cur-rently, United is a smaller player inthe Nevada healthcare market. If andwhen the acquisition is completed, itcould become the 900 pound gorilla.Would it be benign or malevolent?Would it provide Nevadans all thebenefits both companies claim it will– or will it quash competition, puttingconsumers at risk for higher premi-
Sierra’s customers, according toBurdick, will have significantly morechoices through United’s national net-work of more than 537,000 doctorsand other healthcare professionalsand 4,700 hospitals, which will helpmembers avoid more expensive “out-of-network” costs, whether at homeor when traveling. “Sierra and Unitedare committed to improving access tohealthcare products and services tounderserved populations, such as low-income seniors and minorities withspecific healthcare concerns.”
He emphasizes that “it is United’sintention that Sierra continue to oper-ate as it does today, and continue to becommitted and accountable to thelocal communities it serves,” addingthat the merger will allow Sierra’sphysician network and customers tomake use of the full range of United’sadvanced technology resources.“United has invested more than $3
ums and healthcare providers forlower reimbursements?
United’s share of Nevada’s com-mercial healthcare insurance mar-ket is 8.6 percent, compared toSierra Health’s 19.4 percent. Com-bined, United will own 28 percent,according to a fact sheet releasedjointly by the two companies. Inthe Medicare market, United has a15.8 percent share and Sierra 20.4percent, but United’s post-acquisi-tion share will be 36.2 percent. To-gether, the two companies alreadydominate Nevada’s Medicare Ad-vantage market, but a spokespersonfor both companies said “no otherinsurance companies have chosento offer Medicare Advantage inNevada,” noting that only 33 per-cent of Nevada seniors are enrolledin Medicare Advantage, with theremaining 67 percent choosing an-other option.
16 November 2007
Cover Story: Healthcare Check-Up
regulatory bodies in Arizona and Cal-ifornia, is pending before the JusticeDepartment. Gov. Gibbons has re-quested them to carefully considerhow the buyout would affect Neva-da’s insurance markets. He has alsoasked Nevada Attorney GeneralCatherine Cortez Masto to “continuewith a vigorous investigation” into theSierra Health sale and noted that healso is looking forward to participa-tion in the review process by the Fed-eral Trade Commission.
In her order of approval for the ac-quisition, Nevada Insurance Commis-sioner Alice A. Molasky-Arman im-posed a number of conditions withwhich the companies must comply. “Iam convinced that Health Plan ofNevada (a division of Sierra HealthServices) will continue to offer thesame high quality of products and ser-vices that it has historically offered,and that the costs of the acquisitionwill not be borne by Nevadans,” shesaid. “With the conditions in theorder, this is good news for Nevadahealthcare consumers and providers.”
Her conditions include:• No acquisition costs, including ex-ecutive bonuses and severance pack-ages, will be passed to healthcare con-sumers or providers;• Premiums paid to, and provider feespaid by, Health Plan of Nevada willnot be increased as a result of thecosts of the acquisition;• Sierra’s system of claims handlingwill continue after the acquisition,and will not degrade as a result of theacquisition; • Benefit plans will not be scaled backas a result of the acquisition; • Local home office, management andemployment will continue;• United’s affiliates will take specificactions to help reduce the number ofuninsured Nevadans.
Both companies also made addi-tional commitments to address con-cerns raised by the Division, including
If the proposed merger is allowed,“the AMA estimates that Unitedwould control 78 percent of the HMOmarket in Nevada, and 95 percent ofthe HMO market in the Las Vegas-Paradise metropolitan area.” Sierraand United dispute this, claiming thereis no distinctive HMO market inNevada and that the HMO segment isbut one component of the commercialinsurance market, along with pre-ferred provider plans (PPOs) and oth-ers. After the merger, United will have750,000 members in Nevada, com-pared to its current statewide member-ship of 110,100. Nationwide, it has 70million members and reported 2006revenues of $71.7 billion, compared torevenues of $1.7 billion for SierraHealth Services over the same year.
Asked about the acquisition’s im-pact on competition in Nevada, MikeMurphy, president of Anthem BlueCross Blue Shield in Nevada respond-
ed that as a policy, his company does-n’t comment, but said, “We feel thatAnthem Blue Cross Blue Shield willmaintain a strong presence and, as aresult of the merger, be even more at-tractive to Nevada consumers.” Thesame question evoked a “no com-ment” from another local provider,Hometown Health.
The application, which was ap-proved with conditions by the NevadaInsu rance Commiss ione r and
they will fund $25 million in newgrants to benefit healthcare con-sumers and improve the delivery ofhealthcare services in the GoldenState. The United Health Foundationalso announced $1 million in grants inJune to the Colorado Department ofLocal Affairs to fund the ColoradoRural Mobile Health Project. Since1999, the foundation and its family ofpublic foundations “have contributed$250 million to support the charitablework of our community partners.”
That United has the resources to takeNevada to another level in healthcareinsurance and healthcare availability isprobably not arguable, in spite of na-tionwide challenges it faces on a vari-ety of issues. Will United perform as ithas promised? That is arguable.
United is the target of a long list ofgovernmental investigations, auditsand reviews which conceivably couldlead to the assessment of damages,civil or criminal fines or penalties, orother sanctions. The healthcare gianthas just been assessed a $20 millionfine by insurance regulators in 36states – including Nevada – for fail-ures in processing claims and re-sponding to consumer complaints.The fine was negotiated betweenUnited and the regulatory agencies to,in Burdick’s words, “resolve essen-tially all past regulatory matters andto establish an efficient transparentframework for evaluating and regulat-ing United’s performance over thenext three years.”
As the Department of Justice scruti-nizes the proposed acquisition overthe coming months, Nevadans are leftto wonder and speculate. “If the ap-plication is approved, will United bepart of the healthcare solution or justa bigger part of the problem?” Onlytime will tell.
Dennis Hetherington is a freelancewriter based in Southern Nevada.
18 November 2007
Cover Story: Healthcare Check-Up
a pledge to continue, and build on,their charitable giving and philan-thropic activities, although no amountswere specified. Through the PacifiCareFoundation, part of the United HealthFoundation, United donated $10,000to Reno-based C*A*R*E* Chest ofSierra Nevada. At that time, ReedTuckson, M.D., senior vice president
of the United Health Foundation, saidUnited is “committed to supportinglocal community-based organizationsto increase access to quality healthcareservices and resources for allAmericans.”
As part of its required $50 millioncommitment to California, Unitedand PacifiCare announced in August
JudgeNot…
20 November 2007
Avoiding a lawsuit is definitelyone instance where businessesshould apply Ben Franklin’s ad-
vice: “An ounce of prevention isworth a pound of cure.” The best wayto avoid going to court is to take mea-sures to prevent conflicts that can re-sult in litigation.
Some common types of businesslawsuits are: breach of contract; dis-putes between partners or members ofan LLC; liability/personal injurycases; and intellectual property dis-putes. Dissatisfied customers, ven-dors demanding payment and clientswanting contracts completed can ini-tiate litigation as well.
Businesses also face the risk ofbeing named in a liability lawsuit.Hotel guests may claim that someonerobbed them in their room. Slip-and-fall or trip-and-fall cases may in-volve any business with public ac-cess, and traffic accidents can affectany company that lets employeesdrive its vehicles.
“There’s nothing you can do tocompletely avoid being sued, no
matter how careful you are, or howmuch you aim to please your cus-tomers and employees,” said GeorgeOgilvie, managing partner of the LasVegas office of McDonald Carano Wil-son LLP. “There will always be dis-putes that may develop into lawsuits.”
Don’t Court Disaster
Most business disputes that startwith a visit to an attorney’s office endup being settled before they go totrial. In fact, Thomas Kummer, a se-nior partner in the law firm of Kum-mer Kaempfer Bonner Renshaw &Ferrario, estimated only 2 percent ofcases actually end up in court. “Mostbusiness people realize litigation isextremely expensive and time-con-suming,” he said. Expenses for goingto court include not only attorneyfees, but also costs for retrieving doc-uments, doing research, and other“soft costs.”
“You can expect to pay between$350 and $500 per hour for an attor-ney at the partner level, and costs can
mount up quickly,” he said. “We esti-mate 14-hour days for a trial, whichincludes preparation for the trial, thetrial itself, and preparation for thenext day. It’s a very, very expensiveproposition.”
Bill Urga, managing partner inJolley Urga Wirth Woodbury &Standish, agreed, saying, “We spendan average of three hours outside thecourtroom for every hour in court.You can plan on spending between$4,000 and $6,000 a day just inlawyers’ time, and a three-week trialmay cost between $100,000 and$200,000.”
In addition to the expenses of atrial, going to court requires a sub-stantial investment of time. The prin-cipal of the company or a corporaterepresentative must sit through the en-tire trial, and also must spend timepreparing to give testimony. “It’s not aprocess most people like. It’s stressfuland antagonistic, especially cross-ex-amination,” said Kummer. Urganoted, “Another thing to consider isthat going to court takes your mental
How Businesses Can Avoid Lawsuits
November 2007 21
Feature Story: How Businesses Can Avoid Lawsuits
focus away from what you should bethinking about (running your busi-ness). Instead, you’re worrying aboutthe lawsuit.”
What are the advantages of going tocourt? “There aren’t any,” stated Kum-mer. “The only advantages are for thelawyers. Rational people try to resolveissues without going to court.” How-ever, some people are more rationalthan others. “Although the generalrule is that ‘the customer is alwaysright,’ sometimes customers are so un-reasonable that they can’t be right, andit’s impossible to give them what theywant,” said Ogilvie. This was illustrat-ed by the recent case in which a Wash-ington D.C. man sued a dry cleaner for$65 million for losing his pants.
Moreover, in certain cases, going tocourt may be the only way to getmoney owed or to force the otherparty to make good on a contract.“There are some cases that just can’tbe settled,” Kummer said. “One sidetakes an unreasonable position, orboth sides take polarizing positionsand refuse to back down. Sometimesit’s not the money, it’s the principle ofthe thing, and the client is willing tospend the money to get satisfaction.However, there aren’t many caseswhere people can afford to do that.”
Getting Off to a Good Start
“The biggest mistake businessesmake is trying to do things on theirown without counsel,” said Kummer.“It starts with setting up the structureof your business, whether it’s a corpo-ration, partnership or LLC. Themoney you spend up front getting or-ganized can prevent lawsuits fartherdown the line. It appalls me when I seeads for an ‘LLC in a kit’ for $250.People don’t realize that a cookie-cut-ter contract can’t possibly contain asmany protections as a document de-signed specifically for your company.”
Kummer added, “I used to handle
domestic relations cases; in my expe-rience disputes between partners orshareholders are the same kind ofthing, but without children. Whenyou start an entity, you don’t think itwill be a big deal, but business ‘mar-riages’ can go awry. That’s why enti-ty-type relationships should beformed by lawyers.”
Once an entity has been set up, it
usually requires a variety of forms,contracts, invoices and other docu-ments in order to conduct daily busi-ness. “Throw some preventive moneyup front,” advised Kummer. “Hirecounsel to help you set up contractsand forms before you start usingthem. Otherwise, you’re just askingfor trouble, because many things cantrip you up. Take it to a lawyer
22 November 2007
familiar with your industry. Themoney will be well spent.”
It’s also wise to consult an attorneybefore signing a lease or other con-tract, advised Urga. “Some peoplesign a 50-page lease having only readthe page with the rates on it,” he said.“Other pages may contain provisionsthat can hamstring your business orcost you money.”
Because the possibility of a lawsuitalways exists, experts advise all busi-nesses to establish a record retentionpolicy. “The more documentation youhave, the better off you’ll be if youhave to go to court. If you’re worriedabout being overwhelmed by paperrecords, have them scanned and puton CDs for electronic storage,” saidUrga. “Records help jog your memo-ry, and also give you a timeline ofevents.” Keep a record of every trans-action, even if it’s just a memo saying,“This is to confirm our conversationtoday, and this is what we agreed todo,” Urga advised.
Record retention policies also applyto E-mails. “If you are facing a law-suit, make sure to advise employeesnot to destroy any digital records, in-cluding E-mails,” warned Urga. “Theworst thing you can do is to destroyrecords. Although deleted files canoften be recovered, more importantly,destroying records looks suspicious tojudges and juries. You don’t want tobe in the position of having to justifywhy you destroyed records, even ifyou routinely delete files after a cer-tain period of time. It just looks bad.”
ADA Compliance
Businesses may also be at risk oflawsuits if they do not take measuresto make sure they are in compliancewith the Americans with DisabilitiesAct (ADA), according to SuzanneMartin, an associate with the law firmof Lewis and Roca. Title I of the ADA,which was originally passed in 1990,prohibits discrimination in employ-ment and takes effect as soon as abusiness employs at least 15 people.Title III requires that all places of pub-lic access and commercial facilitiesmust be accessible to the disabled.
Title III has generated a set of ac-cessibility guidelines with many de-tailed technical requirements, such asplacement of toilet paper dispensers,width of the slash-marked areas nextto handicapped parking spaces andslope of wheelchair ramps.
Watchdog groups that advocate forthe disabled will often initiate law-suits to force businesses to provideaccessible accommodations for thehandicapped. “These groups are nowcoming to Nevada, and they filed sev-eral lawsuits in 2006 against Nevadaresorts,” warned Martin. “Businessescan be caught in the middle. You wantto provide accessibility. On the flipside, there’s a sense that this is a rack-et. Groups can hook up with attorneysand file hundreds of lawsuits. Theseattorneys specialize in Title III litiga-tion, and they have an army of expertsready to testify.” She explained the at-torneys are willing to sue because
“If you are facing a lawsuit, make sure to advise
employees not to destroy any digital records,
including E-mails.”
A Client Centered Law Firmbusiness & corporate
real property • immigration
construction • collection
labor & employment
At Harmon & Davies, P.C., we are dedicated to responding promptly toclient needs and providing reliable legaladvice based on a thorough understandingof each client’s particular business.
1428 S. Jones Blvd. Las Vegas, NV 89146702.733.0036
www.h-dlaw.com
November 2007 23
Feature Story: How Businesses Can Avoid Lawsuits
they are hired on a contingency basisand Title III builds attorneys’ fees intoits judgments.
“They will ask for your records,including all your financialrecords,” Martin continued. “Thisrequires you to air your financiallaundry in front of the public if yougo to court. You have to pay yourown attorney to defend you, andthen pay the other side’s attorneyfees if you lose. It costs a minimumof $15,000 to $20,000 for attorneys.However, the legal fees usually totaldouble that amount.”
To avoid being sued for non-com-pliance, Martin suggested accessingthe ADA Web site (ADA.gov), wherecompliance checklists are available tohelp business owners audit a propertyto reveal any deficiencies. For evenmore reassurance, the Internet is agood source to locate experts whospecialize in inspecting property forADA compliance.
“If you are contemplating a majorbuilding renovation, it might be in yourbest interest to hire an expert beforeyou start work,” said Martin. “If you’rebuying a building, you should requirethe seller to pay for an inspection, aswell as any modifications necessary tobring it into ADA compliance.”
Intellectual Property
All companies deal with intellectu-al property issues, whether they real-ize it or not, simply because the fieldis so broad and touches so many as-pects of business. According to MarkTratos, managing shareholder of theLas Vegas office of Greenberg Trau-rig, intellectual property includes in-ventions, artistic creations, brands,business processes and know-how,and accumulations of information thatprovide a person or business with cer-tain economic advantages in the com-mercial sphere. Protecting each kindof intellectual property presents its
own challenges. Copyrights often trip up companies
that are not aware of the laws. “Acopyright is automatic and requires nogovernment approval,” Tratos ex-plained. “Just because you ask a per-son or a company to design somethingfor you, that doesn’t mean you ownthe copyright. The basic rule is that thecreator or the author is the owner. The
exception is an employee whose spe-cific job description covers developingthose products. However, if you askyour receptionist to design a logo foryour company, the copyright belongsto her, because responsibilities do notinclude graphic design.”
If a business hires an advertisingagency to generate creative material onits behalf, Tratos advises the company
24 November 2007
expressly request the copyright, speci-fying in writing that the client owns therights to the material and that it wascreated as work done for hire. Other-wise, the ad agency will retain therights to the material and may refuse tolet the client modify or print it.
“Web sites provide huge potentialfor legal trouble,” warned Tratos. “Ifyou hire people to build Web pagesfor you and don’t enter into the rightkind of contract, you don’t own theWeb pages. The contract should clear-ly state that the Web page was createdas work done for hire, and that youown the rights to it.”
If an entrepreneur is planning toname a new company, product or store,how does he or she find out if someoneelse already has rights to that name?Tratos suggests first taking some sim-ple, no-cost steps: Search both theWhite Pages and Yellow Pages of theregional phone book where the busi-ness will be located; search online di-rections; conduct a “Business EntitySearch” on the Nevada Secretary ofState Web site (http://sos.state.nv.us);and consult the Web site maintained bythe U.S. Patent and Trademark Office(www.uspto.gov).
“Information previously availableonly to attorneys is now accessible toanyone on the Internet,” said Tratos.“You can do a good job of researchingnames yourself and can be fairly sureyou’re protected. However, nothing isbulletproof.”
A Last Resort
Going to court should be the finaloption after exhausting all other pos-sibilities. “Most sophisticated busi-ness people understand the costs in-volved with litigation, and they willstrive greatly to avoid a lawsuit,”Ogilvie said. Prevention should be thefirst step in this vital process.
Kathleen Foley is a freelance writerbased in Southern Nevada.
FROM LEFT TO RIGHT:
Curt Anderson, Fair Anderson & LangermanPeter Zofrea, Ernst & YoungDave Hall, LL BradfordPatrick Thorne, Thorne & Gaydosh, CPAsWade McKnight, Deloitte & Touche
Sharon McNair, McNair & AssociatesMichael Micone, Accountants Inc.Bill Wells, McGladrey & PullenMark Bailey, Mark Bailey & Co.
26 November 2007
Industry Focus: Accountants
Recently, experts from the ac-counting profession sat down atCili Restaurant in Las Vegas to
discuss challenges facing Nevada, in-cluding workforce issues, retention,standards, outsourcing and competi-tion. Connie Brennan, publisher ofNevada Business Journal, served asmoderator for the event that, as part ofthe NBJ’s monthly Industry Focus se-ries, brings industry leaders togetherto discuss issues pertinent to theirprofessions. Following is a condensedversion of the roundtable discussion.
Recruitment, Retention andGenerational Challenges
Mark Bailey: From a firm administrativestandpoint, what I am most concernedabout in the near future is a staffing cri-sis. It’s the challenge of attracting andretaining qualified professional staff.
Dave Hall: We have similar chal-lenges. We’ve done a lot of outsourc-ing which has been a great thing forus. It’s also a big challenge as we lookto the future with the clients we’rebuilding, how we’re going to makesure we man those jobs the way weshould.Michael Micone: The baby boomerswho will be retiring will create a largevacancy in the workforce.Bill Wells: Seeking staffing levelswhere we can sustain our growth per-centages is a big challenge, as well asthe new audit methodology cominginto play. Curt Anderson: We have to turn downwork in some cases because we don’tfeel comfortable taking it on, due tostaffing. Pat Thorne: Succession planning for asmall firm is very difficult. Then
again, we have to deal with the newgeneration of employees that have atotally different mindset and we don’tknow how to do it. Our generation isvery client focused and the new gen-eration is very “me” focused. Sowe’re trying to reconcile that. Peter Zofrea: I think it’s a matter ofkeeping up and training our profes-sionals as it relates to the constantlychanging accounting and professionalstandards. Beyond hiring quality peo-ple, it’s hiring quality people with di-versity. We want to make sure that wehave the proper balance within ourfirm of people with diverse culturaland ethnic backgrounds to properlyserve our clients. We recruit national-ly from a number of universities withrespect to the entry-level staff. In ad-dition, we also hire a certain numberof experienced staff each year.
November 2007 27
Industry Focus: Accountants
Bailey: We have not adapted as well tothe needs of this generation, in termsof the work environment that they ex-pect. Retention within the industry isa huge problem. We’ve done a lot ofthings in our firm to try and combat it.We don’t keep time sheets. Every-thing is on a fixed-price agreement.We have reduced our work time tosomething closer to 40-hour weeks,2080 hours a year. We provide highbenefits. We’re forced to benchmarkour salaries against the bigger firms,in order to remain competitive. Butwe try to allow some flexibility. Micone: Companies have asked us tocome in and help them with theirstaffing plans and staffing budgets –making sure they’re competing withother companies with salaries, bene-fits and flex time. Many companiesare starting to offer job sharing, whichallows someone to work a half dayand someone else relieves the person
for the other half of the day. Compa-nies are getting creative in order to re-tain employees. Well, the Army andNavy don’t send the guy who just gotshot to the job fair. In my opinion,when I go to job fairs, sometimes Iscratch my head and wonder, whatpeople were thinking. How do youexpect to recruit somebody with thisperson sitting behind the desk, eatinga doughnut and not engaging in con-versation. CPAs need to band togeth-er. There’s a definite coalition effortthat needs to be done on a monthlybasis to have a resource of where andwhen these job fairs are and co-opsome of the dollars to recruit new tal-ent to Nevada. Anderson: The point is to make the in-dividual’s career path and career im-portant to him or her and make it clearthat it’s important to us, the employer,as well. We’ve changed our entireprocess of career training for our staff
28 November 2007
Industry Focus: Accountants
people in the last couple of years.We’ve gone to what’s known as careercoaching and stopped the evaluationprocess. We have mentoring coach-ing, career coaching and life coachingon a regular monthly basis with ourstaff and make it clear to them thatthere’s an upward path and they mayor may not aspire to ownership. Wehave non-accountants who are in-
volved in the operations on a day-to-day basis, and involved in the train-ing, recruiting and mentoring processto get away from some of the industryattitude that we all are subject to. Inturn, our turnover has dramaticallydecreased.Thorne: We’ve kind of created ourown monster. Years ago, we changedthe requirements to become a CPA to
150 hours of college education to becertified. In Nevada, we have to have150 hours before you can take theexam. We don’t have enough teachersor professors to teach and get the stu-dents into the programs. Anderson: I remember reading a sta-tistic that more than half of the CPAsin public practice are males above theage of 50. All these CPAs are nearingretirement in the next 10 years. Hall: Some CPAs claim that 75 per-cent of our profession will retire inthe next 14 years. So, in 14 years,we’re losing 75 percent of the peopleand we’re not filling that empty spacefast enough.Micone: A possibility might be toreach out to the undergraduates whohaven’t designated a profession yet orhaven’t committed to a degree, andeducate them more.Anderson: People think they don’thave to make a long-term commit-ment to public accounting, but use itas a training ground and become mar-ketable to the next generation em-ployer. So there is a false expectationthat works against us. Most peoplecome into this profession not intend-ing to stay and that becomes a self-fulfilling prophecy because they don’twant to stay if it is too hard. Zofrea: A large number of profession-als within our firm leave and comeback within a few years. There is analternative work schedule where youwork fewer hours, still become a part-ner, still have demands upon you, butwe work around your schedule tomake it more flexible. Doesn’t meanyou produce less, it simply means thatwe will create flexibility within yourlife to do those personal things youneed to do to be satisfied in both per-sonal and professional life.McKnight: In Las Vegas, it’s a littlehard to track people because ofgrowth. Most of our clients are at thesame level as senior managers andthere’s not enough people internally.
November 2007 29
Industry Focus: Accountants
If I hire somebody from you and youhire somebody from someone else,we still end up with a shortage.
Staying Abreast of Ever Changing Standards
McKnight: When I graduated fromcollege, the standards were on Finan-
cial Accounting Standards Board(FASB) 13 and now, I think we’re on160. The complexity of the standardshas increased dramatically. It’s not aprinciples-based world as much any-more. It’s a rules-based world andvery complex issues. There’s morespecialization and you can’t just takeone of the new standards and readily
understand it. Zofrea: There may be 160 standardsthat come out, but there are multiplestandards that interpret the basic stan-dards that exist and those are open tointerpretation by multiple groups ofpeople, whether it’s the firm them-selves, the standard-setters which isthe FASB and the Public Company
30 November 2007
Accounting Oversight Board. Sothere’s multiple people interpretingthese standards and as a practitioner,you often run into situations wheresomeone may interpret the standardone way and then a different groupcomes in and interprets it a differentway. It creates a certain amount ofconfusion among companies andamong firms.Wells: The complication of the stan-dards has a cascade effect. Not onlydoes it impact people like us in thisroom, but also the staff. It’s a contin-uing process to keep current and evenmore challenging is the process of ed-ucating your clients of the changes.The educational process of the part-ners from the staff to the client addsincreased costs to the work we do andit may not add value. The process isongoing and cascades right down tothe end-user.
Diversified Products and Services
Thorne: We would like to think wearen’t just a bunch of guys that puttax returns or financial statementstogether. We want to have an ongo-ing relationship with our clientsthroughout the year and help themwith their business problems. Werepresent a valuable resource for theclients and in the small business en-vironment, we can really offer muchmore than just tax returns and finan-cial statements.Anderson: I would suspect that mostof us look at the relationships withour clients as a central focal pointand a resource to help them find an-swers to questions they don’t havethe ability to answer themselves. Wemay not even have the ability our-selves, but we know someone. It’sthe idea of sitting down and assess-ing situations, finding out the ques-
November 2007 31
tions that need to be answered, andthen, finding the answers. Moreoften than not, we don’t have all theanswers ourselves, but we knowsomeone who does.Zofrea: I think we view ourselves asrisk mitigators, as it relates to the fi-nancial process. Clients are thought ofin terms of risk mitigation because ofthe level of service we can provide.That doesn’t mean we don’t advisethem if they don’t have a risk.
Sarbanes-Oxley
Hall: Sarbanes shifted the marketplace,whether you were a large or small firm,because the amount of work a publiccompany required increased dramati-cally and taxed the resources of thoseCPA firms that audited public compa-nies. So there was a shift in clients,many CPAs moved away from thelargest public companies and into themid-sized firms. There has been moreclient movement in the past five yearsthan the prior 25 years, largely drivenby Sarbanes-Oxley.Wells: I think the new audit methodol-ogy is clearly a by-product of Sar-banes and it directly relates to smallerclients. Again, it’s drilling down intothe smaller client base and will im-pact those clients whether they knowit or not. But from the methodologyand procedural respective from audit-ing firms, it’s going to have a signifi-cant effect.Micone: The compliance to Sarbanescreated new demand, from a staffingstandpoint, because companies need-ed internal audit departments again.There’s one place to get that from andthat’s from public accounting. I’veseen a tremendous amount of im-provement from the last time we meton how public accounting firms areoperating and adapting to their inter-nal problems.
32 November 2007
Outsourcing
McKnight: Concerning the shortage ofpeople, some firms including De-loitte, have looked offshore to pro-vide professionals in places likeIndia and established offices to dowork that we can’t find people to dohere. A lot of our clients’ functions
have been outsourced to India – andnot just due to the shortage in Neva-da, but the nationwide shortage ofpractitioners.Zofrea: We looked to outsource anumber of small accounting firmswhen we saw the shortage arrivingbut found it was too difficult to navi-gate the independence problem.
Thorne: We do provide some, at a lowerlevel, but it just isn’t cost effective.Bailey: One of the problems with out-sourcing is that we have such diverseaccounting standards from the rest ofthe world. We’re probably going to beclose to international accounting stan-dards in the next two years and needto outsource in order to be effective inthe United States.Zofrea: The difference between theU.S. and international standards is afair-value principles-based approachversus a rules-based approach.
Competition
McNair: I think there’s plenty of businessfor us all. We just need more people.Wells: That doesn’t mean it’s notcompetitive, though. We are still afterthe same clients to some degree, andwe all compete against each other atsome level.Bailey: We probably receive more re-ferrals from other accounting firmsthan any other source to assist in fi-nancial statement preparation. Iwould say the biggest portion of ourgrowth is generated by referrals fromother accounting firms.McKnight: I think when you see theopportunities, where we really com-pete against each other, it’s a broadercompetition than it was five yearsago. For publicly-owned companies,partners have to rotate off the jobevery five years. That’s usually one ofthe catalysts for companies, to changethe partner so the clients are totallysatisfied with all of the services anddon’t go into the marketplace and seewhat other firms have to offer.Thorne: Smaller firms like ours haveto focus on what they do well. We arecontinually referring business that wecan’t take and in return, other firmsrefer business to us. You have to spe-cialize a little bit. Some firms justdon’t have the staff or the expertisefor all areas of the business.
Industry Focus: Accountants
Kenneth Smith, founder of Glen, Smith & Glen,
is one of the leaders in green building.
November 2007 51
IT’S HOT TO BE GREENE N V I R O N M E N T A L L Y F R I E N D L Y B U I L D I N G
Once considered the exclusive ter-ritory of granola eaters and tree-huggers, recent years have seen
environmental concerns become in-creasingly mainstream for people inall walks of life. In the constructionindustry, it’s reflected in the rise of“green” or environmentally-friendlyprojects springing up all over thecountry. According to the NationalAssociation of Industrial and OfficeProperties (NAIOP), commercialgreen building is expected to growaround 30 percent by 2010. For theimmediate near-term, green buildingmethods within specific commercialmarkets are estimated to increase by65 percent in education, 62 percent ingovernment, 58 percent in office, 46percent in healthcare and 22 percentin the hospitality sector.
In Nevada, the number of sustain-able projects has grown from a scantfew just a couple of years ago, to sev-eral dozen today, which, in turn, hassparked an influx of professionalscertified to plan and execute all phas-es of this specialized construction.Referring to the growth of green con-struction, Rita Brandin, senior vicepresident, development director forNewland Communities, explained:“We have serious ripples beginning tohit the shoreline. It’s becoming thewave of the future.” Newland is part-nering with the city of Las Vegas tobuild Union Park, a 61-acre, greenmixed-use project scheduled to revi-talize downtown Las Vegas betweennow and 2012.
The green building movement hastaken off in part due to the federal
ENERGY STAR program, whichgives recognition to energy-efficientbuildings, and to the LEED (Leader-ship in Energy and EnvironmentalDesign) program, that certifies pro-jects as using sustainable construc-tion. Developed and administered bythe U.S. Green Building Council,LEED promotes construction thatbenefits the environment and thewell-being of building occupants.Builders use products, technologiesand practices to earn points towardcertified, silver, gold and platinumrating levels. The categories that arerated include:• Sustainable site• Water efficiency• Energy and atmosphere• Materials and resources• Indoor environmental quality
Building Nevada: It’s Hot to be Green
Lou Ruvo Brain Institute
52 November 2007
Tax Incentives Stir the Pot
In addition to these programs, taxincentives enacted by 25 states havegiven another boost to promoting sus-tainable building practices. Referringto Nevada, Jason Geddes, businessdevelopment manager at the Econom-ic Development Authority of WesternNevada (EDAWN) in Reno said, “Thelegislature showed foresight in mak-ing Nevada the first state in the nationto offer incentives in 2005.” Whatseemed like an affordable jump-startto green building at the time, howev-er, became a legislative nightmare inthis year’s session when numbercrunchers revealed those tax breakscould cost the state $900 million inmuch needed revenues over the next15 years. The legislative response wasAB621 which is designed to cut theoriginal incentives in half by backingout the value of the land and the taxdue to school districts from theamount eligible for the property taxreduction. Tax breaks for new LEED-certified construction are 25 percentfor silver, 30 percent for gold and 35percent for platinum.
The devil is in the details as theNevada State Office of Energy andthe Nevada Tax Commission continueto hammer out regulations that willmeet the intent of the statute. Al-though developers acknowledge thevalue of incentives, they don’t wantgreen building to disrupt social ser-vices. “We don’t want to be burden-some on government, but we need tostrike the right balance,” explainedRalph Murphy, chair of the govern-ment affairs committee for the Na-tional Association of Industrial andOffice Properties (NAIOP), whichpromotes sustainable development.
Tax breaks may sweeten the finan-cial pie in deciding to go green, butthey aren’t the only determiningfactor in the ultimate decision.
November 2007 53
“GSG Development was buildingsustainable developments prior to anyavailable tax incentives. We applaudNevada for being one of the fewstates that has pursued this type oflegislation. Any tax incentive is justan added benefit for doing the rightthing,” said Kenneth Smith, founderof Glen, Smith & Glen Developmentin Las Vegas. As more businesses ex-press concern for the environment,the demand for green buildings willincrease. “The new generation ismore socially conscious,” said EricRoberts, vice president of SH Archi-tecture in Las Vegas. “Global politicsshow that we have limited re-sources.” Ideally the tax incentivesshould have a sunset of 10 years orso, according to Roberts. Once the fi-nancial, social and environmental ad-vantages of building green becomegenerally understood, tax incentivesshould not be necessary.
Going Green is Socially Responsible
From a financial point of view,building green can result in annualsavings of around 30 percent in oper-ating costs, according to ToddMcKenzie, whose family has ownedand operated McKenzie Properties inReno since 1953. The company con-structs commercial buildings whichare then leased to a variety of tenants.Retail and industrial tenants, that paytheir own utilities, realize the savingsright away. McKenzie Properties en-joys the immediate financial benefitsat those locations where it providesutilities for tenants. “It just makesgood business sense,” McKenzie ex-plained. Over and above any financialrewards, however, is the desire bymost businesses to be able to marketthemselves as being socially responsi-ble. “Lessees want to be viewed asgreen businesses,” McKenzie said. Inthe company’s Spanish Springs
54 November 2007
Shopping Center Phase III, which willbe LEED Silver-certified, new tenantsare proudly identifying with the pro-ject’s sustainable status. How U Beancoffee shop, for example, became agreen business by going organic. “AllGSG projects are built with the goal ofcreating sustainable developments,”said Smith. “Building green is not justgood for the environment, but leads toincreased building efficiencies and fis-cal savings for tentants.”
In analyzing the importance ofbuilding green, it’s clear that the con-struction industry is changing the wayit does business in response to thegrowing trend. “We're heralding thearrival of a new way to live and dobusiness in Las Vegas with mixed-usecommunities,” said Smith. Buildinggreen is not about simply adding wa-terless urinals to the restrooms to saveon water usage. Rather, it is a system-atic approach to a project that in-volves green thinking and acting fromthe initial planning to the final execu-tion. The key word is collaboration in-stead of segmentation, according to
Roberts. “It’s absolutely critical forcontributors to work together allalong the way. You can’t just add[green certification] at the end,” heemphasized. As the industry contin-ues to feel its way along the sustain-able path, developers rely upon learn-ing by experience, as well aseducating each other and the generalpublic. “The trick is to identify whatworks and then educate people aboutit,” Murphy said. As time passes,many green practices are expected tobecome standard in the industry. “Inthe near future, LEED certification re-quirements will more than likely bewritten into building codes. Many ofthese requirements are affordable andeasily done,” Smith said.
Enter the Insurance Agent
As more and more sustainable pro-jects are built, the need for greenproperty insurance also increases.Traditional insurance policies don’tnecessarily give the protection neededfor a green building, according to
Sullivan Square, a 16.5-acre mixed-use development,is scheduled for completion in 2009.
Continued on pg. 56
N E V A D A B U S I N E S S J O U R N A L A D V E R T O R I A L
In creating the space for others to runsuccessful businesses, two generationsof experience are better than one. Just
ask Brian or Jay Heller.The local development firm they own and
operate, Heller Companies, specializes in of-fice and industrial space construction andmanagement. Brian, the father, and Jay, hisson, credit their success to two guiding prin-ciples: providing the best quality service tothe client, while building lasting relationships.
Together, they have more than 60 yearscombined experience. Whether it’s design,construction or property management, theybring a wealth of innovative ideas to everyproject they undertake.
After graduating from the University ofCalifornia, Los Angeles, Brian Heller builthis first custom home in 1964 and then es-tablished Heller Construction in California,which focused on single family homes andcustom estates. Soon after, Brian started inthe commercial market. In 1995, Brianmoved the construction company’s head-quarters to Las Vegas and co-foundedHeller Companies with his son Jay, whograduated with a business degree fromPepperdine University in 1992.
“We take a very hands-on approach andwith all our properties in close proximity, itmakes it easier to manage and take goodcare of our tenants. It’s important to pro-vide the best quality service to our ten-ants,” Jay Heller said.
Valley View Business Center is locatedon Valley View just south of Russell Roadwithin a few minutes drive to the Strip, theI-15 & 215. The project’s square footagetotals 554,000, making it one of the largestmulti-tenant office/industrial flex projectsin the Valley. Tenants range from smallmom-and-pop shops to fortune 500 com-panies. Space ranges from 900 square feetto 35,000 square feet. The shear size ofValley View Business Center adds anotherkey component to their success, the abilityfor tenants to expand.
“Tenants can expand any time duringtheir lease period and aren’t married to thatparticular space for three to five years. Ifwe have another space available that canaccommodate their growth then the tenantcan expand without penalty and withoutsuffering growing pains,” Jay Heller said.
Decatur Business Center is the compa-ny’s newest venture, located on the cornerof Decatur and Diablo in the heart of the de-sirable southwest submarket. Decatur Busi-ness Center adds an additional 87,000square feet to the portfolio and will be onlinein the first quarter of 2008. The project willhave office, showroom and warehousespace available. It is not a typical project inthe Las Vegas market – as it will be more ofa hybrid office and industrial product withinterior corridors, elevator, upscale lobby, re-ceptionist, and other business services.
The company offers a full range of
leasing services, from the drawing boardthrough construction to design choices.
“We are a one-stop shop,” Jay Hellersaid. “We have a wide variety of productsand services to offer our tenants.”
The formula has proven successful: HellerCompanies now manages more than760,000 square feet of office and industrialspace inhabited by more than 250 tenantsemploying more than 3,000 people. Thecompany provides all the services neededfrom the ground up: construction, design,tenant improvements and property manage-ment. Tenants can custom-build their officespace and be moved in within 60 days.
“We have been successful because weare able to work closely with our tenantsand streamline the typical process,” JayHeller said. “Dealing directly with the de-veloper is another asset. We offer moreservices and can react quicker than most.We help our tenants design and build theiroffice improvements without having to gothrough the typical time consuming bu-reaucratic chain of decision making”.
“Streamlining is key … and taking goodcare of our tenants is our main focus andtop priority.”
Jay and Brian Heller, principals of Heller Companies,stand in front of the Valley View Business Center,a 554,000 square foot office/industrial project theydeveloped.
Heller Companies6280 S. Valley View Blvd., Suite 106
Las Vegas, NV 89118Phone: 702.320.4400
www.hellercompanies.com
Streamline The ProcessCustom Build Your OfficeWith Heller Companies
56 November 2007
Jeric Leavitt, account executive withL e av i t t I n s u r a n c e C o m p a ny. A “normal” property insurance policywill replace losses with items of“like” kind or quality, Leavitt said. Inthe case of a green building that isLEED-certified green building, how-ever, losses must be duplicated exact-ly, including employing LEED-certi-fied personnel to do the work. “Green
building has extra costs involved,”said Greg Pike, vice president of Mc-Fadden Insurance. “Developers typi-cally spend 15 to 20 percent more tobuild to LEED certified standards.” Inaddition, green insurance policies canbe written to include such things asloss of revenue that a property maysuffer by losing its ability to sell thesurplus power it was generating.
Because green buildings are de-signed with professionally-certified,state-of-the-art technology, insurancecompanies see them as better insur-ances risks. Most commercial proper-ty losses involve heating and air con-ditioning, plumbing or electricalsystems which, in the case of greenbuildings, are less likely to create aloss than in other types of construc-tion. The good news is that the costfor appropriate protection for a greenbuilding isn’t out of line with otherinsurance costs, according to Pike. “Itis similar to the difference in insuringa Volvo versus a Ford Pinto – it costsless to insure something that is madewith the best materials,” said Pike.
Editor's note: See related article onpage 71.
A Sampling of Projects
CityCenter Las VegasAt a cost of $7.4 billion, CityCenter
Las Vegas is currently the single mostexpensive privately-funded project inthe Western Hemisphere. Developedby MGM Mirage, the first phase ofthe 76-acre mini-city is now rising be-tween the Bellagio and Monte Carloalong the Las Vegas Strip. This newcommunity will offer entertainmentand shopping mixed with a collectionof urban residences, all designed bysome of the world’s most renownedarchitects. With around 18 millionsquare feet of new construction, City-Center will be the largest LEED-certi-fied project in the world when occu-pied in 2009. Green aspects of theproject include annually eliminating48,000 tons of greenhouse gases(GHG), diverting more than 80 per-cent of construction waste throughreuse and recycling, and improvingindoor air quality with low-volatileorganic compounds (VOC) and non-toxic materials. Construction willmake use of energy efficient glass,
Continued From pg. 54
58 November 2007
Building Nevada: It’s Hot to be Green
carpeting made from recycled fibersand reused materials from the Board-walk casino that was imploded tomake room at the site.
Spanish Springs Shopping CenterPhase III
Constructed by McKenzie Proper-ties of Reno, the third phase of Span-ish Springs Shopping Center inSparks is one of the first LEED Sil-ver-certified retail projects in Nevada.With rental space available from1,800 square feet to 3,600 square feet,the addition boasts the followinggreen attributes:• Reduces landscaping water usageby 70 percent and building waterusage by 30 percent.• Improves energy efficiency by 25percent.• Employs a full recycling program.• Improves indoor air quality withlow-emitting materials.
Tenants will save money throughlower utility bills and reduced mainte-nance charges, plus offer customersand employees a healthier, morepleasant indoor environment.
Union ParkEnvisioned by Las Vegas Mayor
Oscar Goodman as a “city within acity,” Union Park promises to giveLas Vegans a place where they canlive, work, shop and entertain all inthe same neighborhood. Anchored bythe Lou Ruvo Brain Institute and TheSmith Center for the Performing Arts,Union Park’s 61 acres in downtownLas Vegas will encompass hotels,restaurants, retail stores, residences,offices and medical facilities. “Thekey goal of all the stakeholders is thatwe wanted to create an urban commu-nity,” explained Newland Communi-ties’ Rita Brandin. A $6 billion jointproject of Newland and the city of LasVegas, Union Park has been selectedas one of 238 green projects in the
Union Park, a 61-acre development located in the heart of Las Vegas, is a joint project of Newland Communities and the City of Las Vegas.
November 2007 59
Building Nevada: It’s Hot to be Green
country (and the only one in Nevada)to participate in a pilot program to de-velop criteria for LEED-certifiedneighborhoods. Certification is ap-plicable only to buildings at the pre-sent time.
Some of the many factors to be con-sidered in creating sustainable com-munities include the use of shadetrees, wide sidewalks, traffic calmingdevices, solar shading with properbuilding placement and integratingoverlapping neighborhoods. Brandinbelieves that the timing is right for thisproject because many people are inter-ested in moving back to city cores ifthe quality of life remains high. “Peo-ple are now acknowledging, more thanever, quality of life issues,” she said.With the first phase of infrastructurescheduled for December, Union Parkis due for completion by 2012.
Sullivan SquareSullivan Square is a mixed-use de-
velopment in southwest Las Vegasdedicated to green living. When com-plete, its 16.5 acres will offer a varietyof residential living options, a com-munity park, as well as shops and ser-vices along Market Street. Co-devel-oped by Glen, Smith & GlenDevelopment of Las Vegas and Har-court Developments of Dublin, Ire-land, the project is scheduled for itsfirst occupants in 2009. Residents willlive healthier lifestyles and realize a25 percent to 30 percent reduction inenergy bills and a 42 percent taxabatement for seven years through in-corporation of the following:• An on-site water treatment facilitythat will conserve 45 million gallonsof water a year.• Vegetated roofs used in concert withcool roofs to reduce glare and heat.• Low-emitting materials to reduce in-door air contaminants.• Construction materials with a high-recycled content to reduce solid waste.
Clark County School DistrictNorthwest Career &
Technical CenterThe first LEED-certified school in
Nevada, the Northwest Career &Technical Center was designed as acollaborative project to integrate core
academics into each industry-specifictechnical academy. With its tintedglazing, anodized aluminum panelsand integral color accents, the facilityresembles an office building ratherthan a public school. The sustainablecampus makes use of such green
60 November 2007
Building Nevada: It’s Hot to be Green
technologies as natural lighting, geot-hermal heating and cooling and natur-al materials. The fitness trail, ampleopen spaces and outdoor amphithe-ater add to the pleasant surroundingswhich are expected to enhance stu-dent performance. In terms of its en-ergy savings, the center is alreadyoutperforming design expectations,according to Roberts whose firm de-signed the facility. “We were told tocreate a building that used 40 percentless energy than a typical highschool,” he said. “When it was fin-ished the building was performing at asavings of 60 percent.”
Jeanne Lauf Walpole is a freelancewriter based in Northern Nevada.
The Northwest Career & Technical Center was the first LEED-certified school in Nevada.
Building Nevada: It’s Hot to be Green
t SH Architecture in LasVegas, it isn’t enough tojust build green.Through its sustainable
philosophy, the company encouragesits 48 professionals to also livegreen. “Sustainability is the key-stone of everything we do, not just inarchitecture, but in the way we live,”explained Eric Roberts, companyvice president.
Demonstrating that green livingreally begins at the grass roots level,the company kicked off its GreenGame in January with employeescompeting in teams for pointsearned in sustainable activities. Win-ners earned time off from work.“The Green Game really took off
Green Game Makes a Difference One Light Bulb at a Time
Coming Sum-mer 2008
Foothill SquareS. Virginia & Foothill Rd., Reno, NV
• High Visibility Retail Space For Lease
• Approximately 70,000 sf to 80,000 sf Upscale Retail Center
• High Performance “Green” Building - L.E.E.D. Silver Rated
• Traffic Count 32,000 cars per day
• 1,500 to 10,000 Square Foot Units Available
• Excellent Location in the Heart of fast Growing Affluent South Reno
For more information contact: Todd McKenzie (775) 329-5181
A
Michael Pancirov, a project manager at SH Architecture, rides his bike to work as part of the company’s Green Game and sustainable living philosophy.
November 2007 61
from the outset,” Roberts said. Em-ployees analyzed their own personalhabits and environments to discoverways in which they could adoptmore green-friendly lifestyles, suchas riding bikes, replacing light bulbsand appliances, decreasing waterusage and recycling.
Over the three months that thegame was played, participantsracked up the following impressiveresults:• 28 employees bought TerraPassesto offset 336,000 pounds of CO2(carbon dioxide) emissions fromtheir cars.• 20 employees switched to exclu-sive use of biodegradable cleaners intheir homes.• Five employees quit using clothesdryers in favor of hanging clothes todry, saving 100 kWh (kilowatt-hours) per month per person.• One employee persuaded his apart-ment complex to replace all incan-descent light bulbs with CFL (com-pact fluorescent) bulbs, saving11,598 kWh annually.• One employee converted 4,800square feet of backyard to a Nation-al Wildlife Federation-certifiedhabitat.• All office employees installed dig-ital set-back type thermostats intheir homes.
In addition, SH workers adoptedtwo miles of Nevada highway tokeep refuse-free, planted trees at theLas Vegas Wash, installed softwareto power down computers not in use,and decreased use of their cars bywalking, biking, riding the bus andcarpooling to work.
The company continues to encour-age workers to be innovative in solv-ing global problems on a personallevel and plans to have the GreenGame focus on eliminating net car-bon debt later this year. “It’s easyand exciting to be green,” Robertssaid, citing the success of the com-pany’s game.
62 November 2007
64 November 2007
TOTAL MARKET Las Vegas Reno
Total Square Feet
Vacant Square Feet
Percent Vacant
New Construction
Net Absorption
Average Lease sf/mo (nnn)
Under Construction
Planned
WAREHOUSE/DISTRIBUTION
Total Square Feet
Vacant Square Feet
Percent Vacant
New Construction
Net Absorption
Average Lease sf/mo (nnn)
Under Construction
Planned
DISTRIBUTION
Total Square Feet
Vacant Square Feet
Percent Vacant
New Construction
Net Absorption
Average Lease sf/mo (nnn)
Under Construction
Planned
INCUBATOR
Total Square Feet
Vacant Square Feet
Percent Vacant
New Construction
Net Absorption
Average Lease sf/mo (nnn)
Under Construction
Planned
R&D/FLEX
Total Square Feet
Vacant Square Feet
Percent Vacant
New Construction
Net Absorption
Average Lease sf/mo (nnn)
Under Construction
Planned
96,383,134
4,282,371
4.4%
1,286,688
1,084,649
$0.82
2,943,989
4,971,297
41,103,042
1,078,434
2.6%
692,607
711,575
$0.64
2,271,338
3,305,956
15,331,617
1,207,382
7.9%
377,980
188,406
$0.76
72,326
429,328
8,029,443
401,580
5.0%
0
-9,431
$0.85
0
100,800
4,685,924
545,827
11.6%
63,515
64,085
$1.14
330,504
473,890
64,021,083
4,721,416
7.4%
1,575,530
459,872
$0.53
2,701,301
1,404,648
31,166,779
2,422,032
7.8%
0
261,265
$0.40
1,047,617
583,500
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
267,627
28,379
10.6%
0
2,085
$0.88
0
0
Reno/Sparks The industrial real estate market
in Northern Nevada remainedstrong during the second quarter.While the market vacancy rate in-creased due to the completion of asignificant amount of new industri-al product, market demand in-creased. Of the 64,021,083 squarefeet of industrial real estate, 7.4 per-cent is currently vacant. Theamount of vacant space increased1.3 percent since the first quarter,primarily driven by the completionof three large construction projects.These projects include 429,000square feet at the Lear IndustrialCenter in Stead, 300,000 squarefeet and 601,750 in the Tahoe RenoIndustrial Center in McCarranNevada. The new construction pro-jects are primarily high-cube, cross-dock, and distribution projects lo-cated in the outer submarkets ofStead and Spanish Springs to theNorth, and McCarran to the East.
Vacancy rates will continue torise and absorption will remainstrong although it is not expectedthat the newly completed construc-tion be absorbed quickly given thesize of our market and the time toattract new companies. Rents in ourmarket will rise consistently in theshort, medium, and long terms.Continued cheap capital will spuradditional speculative developmentin our market by institutional com-panies. As we move into an over-supply situation in the short tomedium term, distribution tenantswill have more options and receivefavorable leasing incentives. Ouroverall industrial market will con-tinue to grow at a strong pace.
Southern Nevada statistics compiled by Colliers International and Restrepo Consulting
Northern Nevada statistics compiled by Colliers International Reno
ABBREVIATION KEY
MGFS: Modified Gross Full-Service
SF/MO: Square Foot Per Month
NNN: Net Net Net
INDUSTRIAL– 2nd Quarter 2007
Next Month: OFFICE
Las VegasSecond quarter 2007 industrial-re-
lated employment was up from Q2,2006, indicating continued growth indemand for industrial space in theLas Vegas Valley. According to theNevada Department of Employment,Training and Rehabilitation, 171,300industrial-related jobs were recordedin June 2007, a net increase of 800,from June 2006. The Las Vegas Val-ley’s speculative industrial vacancyrate increased by 0.1 percentagepoints to 4.4 percent in second quar-ter. This increase in vacancy was alsoaccompanied by a rise in the averagemonthly asking price, from $0.81 persquare foot to $0.82 NNN. East LasVegas and West Central experiencedthe highest rent increase. Hendersonand Airport also experienced rent in-creases in second quarter.
Direct net absorption in secondquarter of 1,084,649 square feet waslower than that recorded in firstquarter 2007. Overall, industrialcompletions in second quarter, 2007totaled 1,286,688 square feet, a de-crease from 2,271,923 square feet infirst quarter 2007. This resulted inan absorption-to-completion ratio of.84 foot of demand for every foot ofsupply, which was the same as firstquarter, 2007. Additionally, 1.28million square feet of new space en-tered the marketplace. The NorthLas Vegas submarket led Valleycompletions in quarter two with574,293 square feet.
Warehouse distribution industri-al space had the highest net ab-sorption in second quarter with711,575 square feet, followed bylight distribution, light industrialand R&D flex.
Industrial Market Summary2nd Quarter 2007
C O M M E R C I A L R E R E P O R T
November 2007 65
misconception in the current market-place is that to build an energy effi-cient, modern office, a lot of moneymust be spent.
Faciliteq’s newly purchased officebuilding was originally a car garage.Instead of tearing down the buildingand starting over, incorporated theirtheme to conserve, keep and recreate.The edgy, modern, office building isstill under construction, but withraised flooring, low voltage lightsand the rest of the products that theypromote, it is slowly coming togeth-er. “You can take an old buildingwithout starting over and bring it upto 2007 standards by using a lot ofthe products that we distribute.”
One of their most recent projects isthe Molasky Building in Las Vegas.The company has also worked withMGM Grand, the Venetian, McCar-ran Airport, and many more. Fa-ciliteq’s scope ranges from smallstart-up companies to city and stateprojects, as well as major businesses.As the economy continues to grow,resources are becoming more finiteby the day. Faciliteq, along withmany other companies in Las Vegas,is moving towards the concept of ef-ficient and reasonably priced build-ings and offices. One of the biggestchallenges now is trying to change a100-year- old industry. “I am verypassionate about the solution, andbelieve this is the right solution andeven though I had to beat my headagainst a wall to get here, people arefinally starting to see that it [sustain-able solutions] can work.”
emands for a more mod-ern, energy efficientwork environment are in-creasing daily. Employ-
ees are spending countless hours inthe office, and need to be surroundedby a comfortable, manageable workspace. Faciliteq Architectural Interi-ors is a company designed to incor-porate all of those needs.
Serving Southern Nevada for twoyears, Faciliteq is not your typicalfurniture company. Quentin Abramo,president of Faciliteq, said they areworking to provide a total TenantImprovement (TI) package. In addi-tion to furniture, Faciliteq provides araised floor system, flexible modularelectric and data systems, a modularwall system, low voltage lighting, aswell as carpet.
The company is unique in that ithas brought raised flooring and mod-ular products to Las Vegas, trying topromote sustainable solutions for theindustry. Faciliteq is a member of theU.S. Green Building Council(USGBC). “We are part of the USGCbecause a lot of the products that weprovide are those that fall into thesame concepts that they promote,”Abramo said. Many of their productsalso fall into the categories that leadto Leadership in Energy and Effi-cient Design (LEED) certification.
“Our most important job is to notwaste people’s time and find theright products that suit their needs.We locate an opportunity, figure outwhat their need is and are realistic inthe pricing,” Abramo stated. A big
Faciliteq Architectural InteriorsCreating Efficiency One Project at a Time
D
A T T H E T O P
66 November 2007
Vegas Valley. Tesco’s Fresh & EasyNeighborhood Market is the newesttenant to join the Commerce Com-mons retail neighborhood shoppingcenter in North Las Vegas. The10,000-square-foot market is small-er than a typical supermarket andfeatures easy-to-shop aisles forquick in-and-out access. Tescoplans to open 30 Fresh & Easystores in Las Vegas, Los Angeles,Phoenix and San Diego by Februaryof next year, creating around 2,500new jobs.
RE Investment Company’s New Building
Blackfire Investors announced re-cently that is has purchased the39,364-square-foot office building lo-cated at 639 Isbell Ro. in Reno. Thegroup plans to make significant reno-vations to the property and pursue anaggressive new leasing campaign.Matt Riecken and Annemarie Huis-mann of CB Richard Ellis have beenselected as the project’s leasing bro-kers, while NCS Commercial Ser-vices will be the new property man-agers. HMC Architects will beundertaking the building’s redesignand Finska Contractors has the con-struction contract.
First Phase of Tahoe-Reno Industrial Center CompletedDeveloper Union Property Capi-
tal completed construction of a500,000 square foot structure, thefirst of four phases at the 108-acreTahoe-Reno Industrial Center. Thefirst phase of development is to benamed USA Industrial Center. Thecompany is seeking tenants for thebuilding which can be expanded to800,000 square feet. Union Proper-ty plans to build three additionalwarehouses totaling 1.1 millionsquare feet.
Green Valley Corporate CenterStrives to LEED CertificationAmerican Nevada Company is pre-
leasing space in the four-story, ClassA office building which is under con-struction in the 90-acre, master-planned Green Valley CorporateCenter. The 134,400-square-footbuilding offers a prime location in amaster-planned business park. Thebuilding will be constructed in waysthat are environmentally sensitive,with a target of achieving LEED cer-tification for the project. LEEDGreen Building Rating System is thenationally accepted benchmark forthe design, construction and opera-tion of high performance greenbuildings. The building is expectedto be ready for occupancy in the sec-ond quarter of 2008.
Dermody Properties Acquires 50 Acres
Dermody Properties announcedthe acquisition of 50 acres of land atthe Tahoe-Reno Industrial Center inStorey County. The plan is to devel-op a build-to-suit warehouse and dis-tribution center, called LogistiCourtin East Reno. Dermody plans tobreak ground in spring 2008 and in-tends to offer build-to-suit opportu-nities for purchase or lease, as wellas pad-ready land sites for sale. Lo-gistiCourt is a sister to DermodyProperties national brand of integrat-ed logistics development projects,LogistiCenter. Dermody Propertieshas developed more than 25 millionsquare feet of LogistiCenter projectsin five different states, and plans tobuild nationwide.
Las Vegas Welcomes Britain’sLargest Retailer
Territory Incorporated recentlyannounced the addition of Britain’slargest retailer, Tesco, to the Las
B U I L D I N G N E V A D A B R I E F S
Misconceptions Allow Politicians to Dodge Accountability
tax burden as a percentage of in-come was 8.6 percent. By this year ithad risen to 10.1 percent – an in-crease of 17.44 percent.
In the 1980s and 1990s, Nevadataxes – including the taxes called“fees” – grew at rates exceedingthose in all other states. Then, in thefirst years of this new century, theincrease of Nevada’s per capita taxburden exceeded that of every statebut one – New Jersey.
How does all this square with theconventional wisdom – that Nevadais one of the lowest-tax states in theentire country? First, it is true thatNevada remains one of the betterstates when it comes to state andlocal taxes. Although the situation oftaxpayers across the nation contin-ues to deteriorate, Nevada’s situa-tion, has not yet caught up to someof the worst states.
Second, the conventional wisdom,in many respects, is simply not ac-curate. Evaluating organizationsoften believe they must defer to theself-protecting labels that state andlocal politicians often choose toplace on revenue measures. For ex-ample, in virtually every state,politicians always prefer to desig-nate revenue-raising measures asfees, rather than taxes – even when,by traditional definitions, those feesindeed are taxes. Taxes get voters’hackles up and cause re-electionproblems for politicians. Fees, onthe other hand, are usually still given
the benefit of the doubt by voters.This particular ambiguity is one thatNevada politicians were some of thefirst to exploit and have continued todo so for over a generation.
A third answer to the question lieswith the economic myths that politi-cians love to trade on and spread.These misconceptions – facilitatedby the minimal economic knowl-edge of media professionals and theelectorate at large – are highly use-ful in the pursuit of bad public poli-cy. They allow politicians to dodgevoter retribution for legislation thatbenefits the politicians’ special-in-terests allies but otherwise disadvan-tages citizens in general.
One such myth rampant in Nevadapresumes that taxes on businesssomehow fall only on business own-ers – not on employees and theirfamilies, and not on individuals em-ployed out in the wider state econo-my. The fact is, however, that theeconomic burden of a tax almost al-ways extends much farther into thestate economy than the targetedbusinesses. Another such myth isthat tax increases imposed by legis-lators won’t really be paid by Neva-da residents but instead primarily byout-of-state tourists. The implicationthat this is “free money” for the stateis just not true.
Steven Miller is policy director forthe Nevada Policy Research Insti-tute.
ou’d never know it fromthe incessant calls fornew taxes on Nevadans,but Silver State residents
already pay some of the highesttaxes in the nation. Recently, the taxfoundation in Washington, D.C., re-ported the percentage of incometaken by local, state and federaltaxes from individuals in differentstates. Nevadans bore the fifth-high-est burden in the nation, with onlyresidents of Connecticut, New York,New Jersey and the District of Co-lumbia paying more.
Some of the explanation is rela-tively benign. Nevada’s economydoes well, so it produces a largerproportion of successful people, andthey end up paying federal incometaxes at the higher rates. Even aver-age-income people pay more in-come taxes, because many more ofthem are working and earning. Soall this helps skew Nevadans’ feder-al share upward, raising the total re-ported burden.
However, that’s only part of thestory. Nevadans also carry substan-tially bigger tax burdens at state andlocal levels than the state’s officialfigures – or the state’s zealots forever higher taxes – would have youbelieve. In the last generation,stealth tactics by Nevada’s politi-cians and its government employeeunions quietly drove up Nevada’sstate and local taxes over 17 percent.In 1980, Nevadans’ state and local
by Michelle Danks
Y
Nevada Tax Myths
F R E E M A R K E T W A T C H C O M M E N T A R Y
November 2007 67
68 November 2007
own a business where profits havelarge yearly fluctuations will impactthe type of plan you chose. Someplans require a yearly minimumfunding, but most plans give the busi-ness owner a flexible contributionprogram.
Vesting: Vesting refers to the timean employee must remain employedbefore he/she is entitled to any em-ployer contributions into his/her re-tirement account. Also known as“golden handcuffs,” it is an incentivefor an employee to stay with the com-pany. Some plans require immediatevesting while others do not.
Administrative Costs: Someplans have zero costs, while othershave larger costs. Many of the planshave rules associated with them.Therefore, it is necessary to occa-sionally test the plans to make surethat they are in compliance with fed-eral regulation. As a rule of thumb,the more detailed your plan, thehigher the administrative costs be-cause more testing is involved. Al-ways keep in mind that the adminis-trative costs are tax-deductible, andmight even pay for themselves if thebusiness owner gets a large enoughtax-deductible contribution intohis/her investment account.
Access to Assets: Some plansallow withdrawals while some do not.Other plans allow one to borrowagainst the plan’s assets.
Plan Set-Up Deadlines: Depend-
ing on the plan, the deadline for es-tablishing a plan could be the compa-ny’s tax filing deadline, December 31or October 1.
When establishing a plan, balancemust be struck between maximizingthe business owner benefits while ad-dressing the employee issues facingthe business. For example, if high em-ployee turnover is a problem withyour business, a plan that has a vest-ing schedule attached to it with a one-year eligibility requirement couldwork. If the business has a few long-term employees, and the owner wantsto reward their service, a plan thatgives the employees a share of theprofits could be established. If thebusiness has no employees, a plan al-lowing the maximum possible contri-bution could be considered.
The government gives businessowners a large incentive to establishand fund a retirement plan. If you donot have a plan, you could be losingvaluable employees and might bepaying more in taxes than necessary.As you can see, many factors shouldbe considered when establishing aretirement plan. Since every planhas advantages and disadvantages,seeking the advice of a qualifiedprofessional can help you exploreyour options.
Steven Budin is a Las Vegas-based fi-nancial advisor and president of TheBudin Group.
o you think you are pay-ing too much in taxes?Finding it hard to attractand retain quality employ-
ees? Establishing a retirement planfor your business could be the solu-tion. Most business owners are famil-iar with the 401k plan. But is it thebest plan for your business? There area myriad of qualified plans that busi-ness owners can establish. The chal-lenge is finding the plan that best suitsyour business. Alphabet-soup namessuch as SEPs, SIMPLEs, PSPs, 401ksand DBs are all possible choices.
Here are a few factors to considerwhich plan is right for you.
Employee Eligibility: Each planhas different requirements regardingemployee tenure and income to be-come eligible for participation. Someplans require one year of employ-ment, others two years and some evenrequire three years.
Number of Employees: Some re-tirement plans require the businessowner to make contributions for em-ployees while others do not. The levelof employee turnover is a key consid-eration. In addition, it is possible toestablish a plan that rewards certainemployees, but not others.
Contribution Limits: Each retire-ment plan has a different fundinglimit. Keep in mind that most planshave maximum limits, but you couldalways fund a smaller amount.
Flexibility: Whether or not you
D
401Ks The Best Plan For Your Business?
M O N E Y M A N A G E M E N T
70 November 2007
enate Joint Resolution 2 would amend the Neva-da Constitution to remove voters from theprocess of electing their judges. Under the plan,a commission of “experts” – to be dominated by
the State Bar and the incumbent Chief Justice – will nomi-nate a slate of candidates for judicial office. The governorwill select a judge from among the approved candidates.Subsequently, the governor’s pick must stand for an uncon-tested retention election.
There are good reasons to doubt SJR2 will restore justiceto Nevada rather than perpetuate influence, or “juice.”
First, SJR2 will not drain the influence of money from thecourts. Judges will still campaign for retention and thereforewill need to raise money. SJR2 does nothing to eliminate thepotential for serious conflicts of interest.
Second, SJR2 makes the Judiciary almost entirely unac-countable to the public. A 30-year study of ten states withretention elections found incumbents were retained about98 percent of the time. This is not surprising. Retentionelection does not give voters a choice of a named alternativeto the incumbent. It’s strictly the devil-voters-know versusthe devil-they-don’t. Therefore, SJR2’s outcome will belife-tenured judges without the usually associated benefit ofimpartial judgment.
Third, several scholarly studies confirm that appointedjudges, on average, are no more qualified than electedjudges. District Judge Elizabeth Halverson, whose incompe-tence has fueled sentiment to adopt SJR2, is the memorableexception, not the competent rule.
What alternatives to SJR2 would assist Nevada in securingthe integrity of its judges? Don’t expect the Judiciary to rec-ommend these: limit election to fixed non-renewable terms;cap campaign contributions; redefine what constitutes a con-flict of interest to encompass fundraising from counsel;change Nevada’s impeachment process; streamline the judi-cial disciplinary and removal process; and prosecute vigor-ously corrupt judges, parties and lawyers. Nevada’s problemis misbehaving jurists, not the ability of its voters to hold theJudiciary accountable.
oday in Nevada, judges are selected by a cor-rupt money-chasing process. Since 1998, wehave raised the ante on the cost of one SupremeCourt seat 300% from $174,000 to more than
$543,000. Judges and candidates are forced to seekmoney, while attorneys and litigants are forced to givemoney to avoid risking a bad day in court.
Many judges along with the president of the NevadaState Bar have asked that we change this corruptingpractice. In 2007, the Legislature passed SJR2, which ifpassed again and ratified by the public, would create twopublic professional committees. The first would receivenominations for a judgeship and an evaluation usingprofessional standards, sending the best of those nomi-nees to the governor for appointment. The second com-mittee would create standards for judicial performancereview and the results of which would then be used bythe public to vote in a retention election for all judgespreviously selected.
Some argue that politicians and judges are equallychosen by the same standards. The 2007 ABA ModelCode for Judicial Conduct explains that governors andlegislators are not expected to be independent of thepeople. To the contrary, these officials are expected torepresent their respective constituencies by acting on thepolicy preferences of those who elected them.
Judges, however, are different. Once voters’ policypreferences are enacted into rules of law, it is up tojudges to ensure that those rules of law are faithfully in-terpreted and upheld. The rule of law would be corrupt-ed if interest groups, public officials, powerful privatecitizens, or fleeting majorities of the public could intim-idate a judge into interpreting a law to their liking orreading a law out of existence altogether. Unlike gover-nors and legislators, judges must be as “independent asthe lot of humanity will admit.”
Editor's note: Craig Walton wrote this piece for NevadaBusiness Journal before he passed away on October 8.
S T A T E T H E I S S U E S
T S
Keep Judges IndependentBy Craig Walton, Nevada Center for Public Ethics
Question:
SJR2: The Worst of All WorldsBy Professor Tuan Samahon, Boyd School of Law
Should judges be appointed rather than elected?
November 2007 71
policy, in the event of a loss to a tradi-tional building, the damaged portion ofthe building will be repaired or replacedusing green products and green meth-ods. If the building qualifies for certifi-cation, this policy may also pay for thecommissioning and certification.
Keep in mind, the purpose of a busi-ness’ insurance policy is to protect thebusiness, and the investment made in it.If it doesn’t do that, it’s not worth thepaper it’s written on.
J. Bradd Greene is an executive withMcFadden Insurance.
in mind when insuring a green build-ing. First and most importantly, alwaysmake sure that in the event of a loss, thebuilding will be repaired or rebuilt tothe same or better standard than when itwas originally built
Second, it is important that you un-derstand who is responsible for insur-ing the building. While owners of greenbuildings should be informed about theinsurance coverage available to protectprojects, the tenants of these buildingsshould also understand the liabilitiesand how to ensure coverage. Somegreen project owners will build a coreand shell that carries a green certificateand then leave the interior certificationto the tenants. Others opt to develop theentire building, including the tenant im-provements (TIs), to green certificationstandards. In these buildings, althoughthe tenants are getting turnkey space,they may be responsible for the costand replacement of the TIs, in the eventof a loss.
Next, it is important to work with aninsurance agent who understands theseneeds and can develop a protectionplan that fits the particular property.Whether it’s a green building beingconstructed from the ground up, an ex-isting space being renovated to a“green” status, or a project deemed“historical preservation” being revital-ized using green standards, each has itsown set of protection needs.
Finally, with green building quicklybecoming the standard for future devel-opment, make sure you explore “green”insurance options that are available fortraditional buildings. With this type of
hen it comes to protectingtheir investment, manybuilding owners and ten-ants make one crucial mis-
take. They think that all insurance poli-cies are the same. After all, a building isa building, and insurance is insurance,right? This common assumption ismagnified with certified green build-ings. While the owners of green build-ings realize that their buildings are dif-ferent, many don’t realize they needspecialized insurance programs to fullyprotect them. To their surprise, manyelements of a green building may notbe covered by even the best standardbuilding insurance policy.
People who own green buildingsoften think they have a replacementcost policy that means the building willbe replaced. While this is true, it doesnot necessarily mean it will cover andreplace all of the green elements thatwere in the original construction. Un-fortunately, most people don’t reallyknow how well their insurance willprotect them until it’s put to the test.
As a result of the industry shift to-ward building green, there have beenseveral “green” insurance products in-troduced in the last year. These prod-ucts assure that a certified green build-ing will be rebuilt and returned to thesame level at which it was originallycertified. In some policies this even in-cludes a certain limit to cover the costof commissioning and certification.Coverage is offered for office, retailand industrial buildings as well asmixed-use and multi-family projects.
One should keep a few simple things
W
Insuring a Greener FutureProtecting Your Business
E X P E R T A D V I C E
72 November 2007
Michael Dunn, CCIM, who is the se-nior director of the office propertiesdivision; Monty Montierth, CCIM,who joins the team as an office andinvestment specialist; Carolyn Curtis,CCIM, who has more than 30 yearsof professional real estate experienceto Commerce CRG; and Colin Tapp,who brings extensive experience insales and marketing.
Advanced Information Systems Launches
Frank Yoder, president of Ad-vanced Information Systems (AIS),announced the Las Vegas-based soft-ware development firm launched anew voice and data networks divi-sion to provide companies with asingle, streamlined network inwhich to conduct business. By uti-lizing interactive intelligence, the di-vision merges voice and data net-works, allowing businesses tooperate their telecommunicationsand Internet needs through one sys-tem. AIS also aims to become li-censed in fiber-optics cabling thatwill allow the firm to install fiberoptics and copper data cables.
Carson River Community BankSurpasses $26 Million
Carson River Community Bankreached a milestone with over $26million in total assets. Julie Kidd,chief financial officer, credits thebank’s solid growth in part to its re-lationship-focused, individualizedapproach to banking and lending.Community leaders, banking profes-sionals and local investors focusedon launching Carson River Commu-nity Bank last year to fill a need forpersonalized banking and local deci-sion-making. Banking services in-clude account access through Inter-net banking, ATM service, mobilebanking and courier service.
Paramount Bank Opens in Las Vegas
Paramount Bank, an offshoot ofParamount Bancorp, Inc. in Michi-gan, opened its doors at 7795 WestSahara Avenue. The bank was createdby local banker Paul D. Kadavy andThomas E. Purther, director and CEOof Paramount Bancorp, Inc. Kadavywill serve as the bank’s president.Paramount will occupy 4,000 squarefeet in the Sahara & Buffalo BusinessPark. The primary focus will be busi-ness loans and deposits, with effortsin the consumer sector primarily di-rected towards residential real estatemortgage origination and consumerdeposits, as well as commercial realestate, developers and commercialand industrial business.
Las Vegas Ranks as One of the Nation’s More Affordable Markets
An annual comparison of similarhomes in 317 U.S. markets was doneby Coldwell Banker’s Home PriceComparison Index. It defines homeprices that equate to a $2.1 milliondifference between the nation’s mostexpensive and affordable housingmarkets. Subject homes in Las Vegasaverage $362,188, ranking LasVegas as one of the more affordablemarkets in the nation. Las Vegascompares to the average price ofhomes in West Hartford, Connecti-cut and Provo, Utah.
Commerce CRG Announces Office Division
Commerce CRG/Cushman Wake-field Las Vegas announced the forma-tion of an office properties division.Led by office sector veteran MichaelDunn, the new division will focus ongeneral office brokerage, includingboth landlord and tenant presenta-tion. Team members include:
Expanding Radiation Capabilities
Nevada Cancer Institute’s RadiationOncology Department received accredi-tation by the American College of Radi-ation Oncology (ACRO) and begantreating patients with its TomoTherapyHi-Art treatment system in September.The prestigious ACRO accreditation isachieved only by a small percentage ofdepartments across the country. NVCI isaccredited for a maximum use of threeyears. Unlike traditional radiation thera-py equipment, the Hi-Art system’s deliv-ery unit doubles as an onboard CT scan-ner. Allowing true CT images of apatient’s anatomy to be created with thesame physical equipment next used totreat the patient, bringing confidence thattumors will receive their intended dosagefrom one day to the next.
N E V A D A B R I E F S
“BUILDING ON SOLID GROUND SINCE 1960”376 E. Warm Springs Road, Suite 160
Las Vegas, NV 89119www.oakviewconst.com
(702) 873-6399 Fax: (702) 873-6690
Southern Highlands Marketplace
Venture Professional Center
November 2007 73
here is no doubt that theavailability of medicalmalpractice insurancecoverage has improved
greatly in the past few years for doc-tors in Nevada. In the past year alone,rates have not only stabilized but de-creased 10 to 25 percent. Nevada hasseen the formation of a new self in-surance program for doctors, by doc-tors. Premier Physician InsuranceCompany (PPIC) is a risk retentiongroup – a liability insurance companyowned by its members, whom facesimilar liability exposures.
PPIC was formed by women’scare specialist Dr. Warren Volker toprovide Nevada physicians with sta-bilized medical malpractice rates. In2001, the majority of malpractice li-ability insurance carriers left Neva-da, leaving the remaining carriers torespond to a major coverage short-age. “When St. Paul Insurance Com-pany announced they were leavingNevada in 2000, it set off the biggestprofessional liability crisis in U.S.history since the ‘70s,” said Dr. War-ren Volker, chairman of PPIC. Med-ical malpractice liability insurancerates continued to climb for mostphysicians despite legislative limitson damages.
As new companies enter the mar-ket, the state is seeing some of thesame tactics as before. New compa-nies come in offering under-cut ratesto lure doctors from their currentcompanies, Volker said. He admitsthat in the short run, these rates aregood for doctors, but as companies
take this approach they are forced toincrease rates, playing “catch-up.”PPIC, which is owned and con-trolled by a broad base of physi-cians, seeks to insure quality physi-cians who practice evidence basedmedicine and seek to reduce risk.The company is committed to deliv-er consistency, continuity and stabil-ity through effective risk manage-ment, financial liability protectionand other meaningful services forthe benefit of its members.
Doctors should not insure them-selves based on price alone. “When adoctor is looking to purchase mal-practice insurance, it is usually a lastminute decision” said Volker. “Thatdecision is almost always determinedby price.” While exploring options tocreate a physician-owned medical li-ability company, Dr. Volker focusedon two key components: reinsuranceand operating costs. Reasonable op-erating costs were essential to main-tain a viable vehicle for physiciansas sufficient reinsurance was neces-sary to ensure the stability of thecompany. The mission of PPIC is toprotect its patients – doctors. By pro-viding member physicians and their
practices with an innovative medicalmalpractice liability insurance thatbenefits not only physicians, but pa-tients as well, protection is accom-plished.
Capstone Management Group,LLC manages the underwriting forPPIC which protects the company andits policyholders. Capstone worksclosely with the physicians, under-standing their needs in order to meetthe goal of PPIC – to bring a fair andlogical approach to medical malprac-tice liability underwriting.
T
Doctors Need Insurance, TooA Program For Doctors, By Doctors
V I T A L S I G N S
“When a doctor is looking to purchase
malpractice insurance, it is usually a last minute decision.”
November 2007 75
would have severely impacted therevenues of casinos. The union evenqualified an initiative that went to theballot that year as Question 10. At thelast minute, however, a deal wasstruck amongst the parties to considera “Business Activities Tax” at the1991 Legislature, and the unionbacked off, allowing the proposal tobe defeated at the polls.
Perhaps the casinos will agree to amodest (maybe 1.75) increase, as longas other industries are also forced tofeel the pain as well. Gaming officialswill undoubtedly come back withsome counter-proposal, perhaps theirown initiative that would include a va-riety of tax increases designed to in-crease revenues and perhaps to helpfund Nevada’s transportation needs.
Recent polls have shown great sup-port for raising the gaming tax (althoughnot for the idea of raising it to 18.25 per-cent). Bill Bible, executive director ofthe Nevada Resort Association, re-sponds that of course people support theidea of raising more money for educa-tion, especially if they won’t have to payfor the increase out of their own pockets.
Nevada has the lowest gaming tax ofany jurisdiction in the country. It is alsothe only venue that has unrestricted andcompetitive casino licenses. In all otherjurisdictions, licenses and competitionare extremely limited, making highertaxes feasible for companies.
The NSEA will have to collect morethan 50,000 signatures to qualify the
initiative, which would then appearon the 2008 and 2010 ballots before itcould become law.
The smart money is being wageredthat a solution will be arrived at longbefore that time.
Michael Sullivan is president ofKnight Consulting, a local govern-ment affairs firm.
he announcement that theNevada State EducationAssoc ia t ion (NSEA)would attempt a ballot ini-
tiative to raise the gross gaming tax inNevada came as no surprise to anyone,especially executives at the state’smajor casino properties.
For several months, rumors hadbeen flying about one and possiblytwo initiative petitions that wouldchange the state Constitution andraise the gaming tax. The teacher’sunion proposal is by far the moremodest of the two, seeking to raise therate by three points to 9.75 percent.Another, by community activist andattorney Kermitt Waters, would near-ly triple the tax to 18.25 percent (andalso eliminate property taxes).
Many lawmakers, who have had theopportunity to raise the gaming tax buthave resisted in the past, said they feelthat while raising the gaming taxslightly might be one part of the solu-tion, any proposal should include otherindustries and not just single out oneplayer. In addition, they cannot ignorewarnings from independent industryobservers who have said any signifi-cant increase in the gaming tax woulddestroy future investment in Nevada.
The teachers union has had successin the past when they threatened to goto the ballot for increased taxes to payfor education (and raises for theirmembers). In 1990, they threatened acorporate income tax initiative that
by Michelle Danks
T
Gambling on Education
I N S I D E P O L I T I C S
NSEA Seeks to Increase Gaming Tax
76 November 2007
Web site’s content to obtain highrankings by search engines. It in-volves designing Web site headlinesand subtitles so they will be readilypicked up by “crawling” programs,which regularly scan the content of allWeb sites and send information to thesearch engine to be used in rankings.It is also important to choose the cor-rect keywords for a Web page’s metatags, words in the underlying htmlcode that indicate to “crawlers” whatthe site contains. Each search engineuses different algorithms to rank thesites it crawls, so ranking high on onesearch engine does not guarantee acompany will rank equally high onanother. However, all search enginesprefer content rich in key words.
SEO TechniquesThe SEO techniques listed below
may be used to improve a user’s Website ranking. More suggestions maybe found on Google’s Web site(google.com/webmasters). • Create keywords that people wouldbe most likely to use in searching foryour product or service. • The most important places to putkeywords are in the title tag and in the
visible text, preferably near the top ofthe page. • Make sure the site is organized log-ically and does not contain duplicateinformation.• Use text instead of images to displayimportant names, content or links. • Avoid drop-down menus, they arenot SEO-friendly. • Limit Web pages to a maximum of200 to 500 words.
With the help of an SEO expert, aLas Vegas optometry clinic was ableto increase its Web site rankingswithin various search engines by tar-geting keywords such as Las Vegasoptometry, Las Vegas optometristand Las Vegas eye care. By includingthese key words in titles, subtitlesand meta tags, the clinic was able toraise itself to number five and num-ber seven on Google.com’s natural(unpaid) search results.
Large companies may hire an SEOexpert to optimize their Web site’sSEO content, but these professionalsare usually very highly paid. A satis-factory job of SEO optimization canbe done by any knowledgeable Webdesigner or developer. By using thetechniques listed above, a companycan often dramatically improve itsrankings in search engine results.Once a site has been optimized, it willneed constant updating and mainte-nance to make sure it remains effec-tive in attracting traffic.
Thavaroth To is an IT business ana-lyst at Nevada State Bank.
nline business, specifical-ly the business-to-con-sumer market, has sky-rocketed over the past
decade. JupiterResearch, an Internetmarketing research group, predictsonline retail sales will grow from $81billion in 2005 to $144 billion in2010. Business owners are findingthe Internet can be an inexpensivemarketing avenue to expose theirproducts or services to potential andongoing customers.
Most people are familiar withsearch engines such as Google andYahoo, which help them find infor-mation about companies, productsand services. Although pay-per-clickadvertising on search engines can be agreat way to encourage people to visita company’s Web site, it can be ex-pensive, especially for small compa-nies with limited advertising budgets.
However, companies can also usea technique known as SEO (searchengine optimization) to bring theirWeb site closer to the top on the “re-sults page” of search engines, with-out having to pay for advertising.Since viewers naturally read fromthe top down, research shows thatthe closer a Web site is to the top ofthe results page, the more often itwill get hits. If done correctly, SEOcan improve the amount of trafficdriven to a company’s Web site,which should result in more salesand a healthier bottom line.What is SEO?
SEO is a technique that arranges a
O
Search Engine OptimizationAn Important Online Marketing Tool
T E C H P A G E
“Online retail sales will grow from
$81 billion in 2005 to $144 billion in 2010.”
November 2007 77
Through Mentoring
t isn’t uncommon to hearthe managers in organi-za t ions compla in ingabout how difficult it is
to find, recruit and retain good em-ployees. What they often don’t un-derstand is that they have a directimpact on their organization’s abili-ty to find, hire and keep good peo-ple. New employees are typicallyput through an orientation process,overwhelming them with data, andthen, are sent off to departments tostart their new jobs. Next, the newemployee is led to the work areawith the expectation to begin work-ing without being given clear perfor-mance standards and expectations.Additionally, employees are oftenleft to fend for themselves when itcomes to learning the organization’soperating norms, or they are teamedwith an employee whom the depart-ment can spare to show the new em-ployee the ropes.
Many times employees who canbe spared aren’t necessarily highperforming role models that the or-ganization’s leadership would likethe new employee to emulate. TheUnited States Navy found out yearsago that it was critical to make surenew sailors were teamed with expe-rienced sailors who had good atti-tudes, a solid work ethic and werepositive about the military and theirjobs. In the 1980s, the Navy identi-fied a disturbing trend in youngsailors who were graduating from
boot camp in San Diego. A closer in-vestigation found that graduationwas typically held on a Friday. Theindividuals who went on “boot” lib-erty tended to be more positive thanthose who reported directly to theirfirst shipboard commands. Theyoung boots who reported to theirships met two different groups of in-dividuals on the weekends. Onegroup, the duty section, was typical-ly a small group of people who werestanding watches, performing main-tenance and repair with little time tospend with the new sailors. Theother group of people found onboardon a weekend was the sailors on re-striction for disciplinary reasons dueto a variety of minor or major in-fractions. This group was typicallynot positive about the military, theship itself and outspoken about thenegative side of the military in gen-eral. The result was that the newsailors spent a weekend with thesenegative forces, and in far too manycases, by Monday, they too hadadopted some of those same nega-tive opinions and behaviors.
The moral of the story is that thenew sailors, like new employees,need to be teamed with the best andbrightest an organization has avail-able. Getting your best people tohelp the new people adapt and adjustcan have huge benefits in the longrun. In the book, Semper Fi, formerMarine officers Dan Corrison andRod Walsh summed it up in just a
few words: “Understand that em-ployees who feel cared for will careabout the company.” Historically,people don’t leave organizations,they leave people. The way they areintroduced to the organization willhave a long-term impact.
Mark Keays is president of DesertManagement Services, a Las Vegas-based management consulting firm.
I
Making New Employees Successful
P E O P L E F I R S T
78 November 2007
he midyear indicators
remain generally posi-
tive. To be sure, a
number of indicators
point to slowing rates of change.
And a few, in particular housing,
generally show marked weakness
in comparison with indicators in
2005 and early 2006.
One indicator showed a big jump.
Las Vegas residential permitting
jumped from 925 in July to 2,388 in
August; a one-month increase in
excess of 158 percent. All indica-
tions suggest this is not a perma-
nent trend.
The Fed surprised investors in
September with a marked drop in
the federal funds rate by 50 basis
points to 4.25 percent and the dis-
count rate by 50 basis points to
5.25 percent. This activity follows
clear recognition of possible adver-
sities evolving in housing and asso-
ciated credit markets.
In Nevada, housing imbalances
have taken the bloom off the cur-
rent expansion path. Still, strong
spending activity in other sectors
has kept the economy from slipping
into a downturn. In particular, tax-
able sales, gaming revenue, and
tourism activity have kept Las
Vegas (Clark County) and Reno
(Washoe County) afloat. Changes,
even if negative, suggest strength in
the face of sharp slowdowns in res-
idential construction.
R. Keith SchwerUNLV Center for Business and Economic Research
units previous comments
GROWTHDATAlatestdates year ago recent year ago
(%)(%)
(%) (%)
(%) (%)
(%) (%)
SOURCES: Nevada Department of Taxation; Nevada Department of Employment, Training and Rehabilitation; UNR Bureau ofBusiness and Economic Research; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/TahoeInternational 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 Bank.
1,000 employees
%, nsa
$ billion
$ million
passengers
million gallons
million visitors
1,000 employees
%, nsa
$ billion
$ million
units permitted
permits
million persons
million gallons
million visitors
1,000 employees
%, nsa
$ billion
$ million
units permitted
permits
million persons
million gallons
million visitors
million, sa
%, sa
82-84=100, nsa
82-84=100, nsa
89.06=100, sa
92=100, sa
$ billion, sa
million, sa
million, sa
$ billion, sa
97.01=100
$ billion, sa
monthly close
%, nsa
%, nsa
NEVADA
Employment
Unemployment Rate
Taxable Sales
Gaming Revenue
Passengers
Gasoline Sales
Visitor Volume
CLARK COUNTY
Employment
Unemployment Rate
Taxable Sales
Gaming Revenue
Residential Permits
Commercial Permits
Passengers
Gasoline Sales
Visitor Volume
WASHOE COUNTY
Employment
Unemployment Rate
Taxable Sales
Gaming Revenue
Residential Permits
Commercial Permits
Passengers
Gasoline Sales
Visitor Volume
UNITED STATES
Employment
Unemployment Rate
Consumer Price Index
Core CPI
Employment Cost Index
Productivity Index
Retail Sales Growth
Auto and Truck Sales
Housing Starts
GDP Growth
U.S. Dollar
Trade Balance
S&P 500
Real Short-Term Rates
Treasury Yield Spread
08/07
08/07
06/07
07/07
07/07
07/07
07/07
08/07
08/07
06/07
07/07
08/07
08/07
07/07
07/07
07/07
08/07
08/07
06/07
07/07
08/07
08/07
07/07
07/07
07/07
08/07
08/07
08/07
08/07
2q07
2q07
08/07
08/07
08/07
2q07
08/07
07/07
08/07
08/07
08/07
1,300.3 1,301.1 1,282.2 -0.1 1.4
4.9 5.1 4.2 -3.9 16.7
4.474 4.112 4.486 8.8 -0.3
1,146.01 959.82 1,039.45 19.4 10.3
4.790 4.660 4.620 2.8 3.7
101.55 99.91 103.02 1.6 -1.4
4.449 4.344 4.483 2.4 -0.8
931.7 932.6 917.8 -0.1 1.5
5.0 5.1 4.2 -2.0 19.0
3.239 3.048 3.243 6.3 -0.1
964.72 789.66 850.94 22.2 13.4
2,388 925 2,324 158.2 2.8
109 102 118 6.9 -7.6
4.280 4.157 4.086 3.0 4.7
70.54 67.81 69.73 4.0 1.2
3.791 3.677 3.791 3.1 0.0
227.9 227.4 224.8 0.2 1.4
4.4 4.6 3.8 -4.3 15.8
0.678 0.591 0.700 14.9 -3.0
92.07 92.79 99.72 -0.8 -7.7
202 195 493 3.6 -59.0
29 25 61 16.0 -52.5
0.465 0.458 0.466 1.6 -0.2
14.34 16.17 16.28 -11.3 -11.9
0.446 0.460 0.479 -3.0 -6.9
138.037 138.041 136.438 0.0 1.2
4.6 4.6 4.7 0.0 -2.1
207.9 208.3 203.9 -0.2 2.0
211.1 210.8 206.7 0.1 2.1
105.1 104.3 101.6 0.8 3.4
137.8 136.6 136.6 0.9 0.8
377.615 376.578 364.247 0.3 3.7
16.20 15.23 16.11 6.3 0.6
1.331 1.367 1.646 -2.6 -19.1
11,520.1 11,412.6 11,306.7 0.9 1.9
103.330 102.770 107.640 0.5 -4.0
-59.245 -59.428 -67.554 -0.3 -12.3
1,473.99 1,455.27 1,303.82 1.3 13.1
4.38 4.85 4.76 -9.7 -8.0
0.35 0.04 -0.21 775.0 -266.7
Off Slightly
Recent Improvement
Up Recently
Up
Up
Flat
Up Recently
Off Slightly
Recent Improvement
Up Recently
Strong Recently
One-month Surge
Up Recently
Up
Up
Up Recently
Up Slightly
Recent Improvement
Up Recently
Down
Trend Down
Trend Down
Flat
Down
Off
No Change
Up Slightly
Steady
Steady
Up
Declining
Flat
Up Recently
Down
Slow Growth
Weak
Weak
Up
Up
Up
B U S I N E S S I N D I C A T O R S
T
