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When borrowers default on theseloans and lenders try to attach theirassets to get paid, the scheme fallsapart. This increases the cost ofdoing business for lenders, who passit on to their other customers. Inshort, as in most fraudulentschemes, we all end up paying for it.

Bice warns, “Consumers, brokersand lenders that complete, submit orparticipate in the completion andsubmission of an application forcredit that contains misrepresenta-tions or false information are subjectto administrative action and poten-tial criminal penalties by the state.”So, how do these “credit lenders”manage to stay in business? Theirwebsites have a disclaimer that says,“Deposits cannot be encumbered,pledged, put in jeopardy, or used tocollateralize or guarantee a loan.”This may give them some legal pro-tection, but why would people pay afee, which can amount to 3 percent

C O M M E N T A R Y

“Renting” CollateralA Cautionary Tale

L Y L E E . B R E N N A NPublisher

s publisher of Nevada’sonly statewide businessmagazine, I am often ap-proached to spread the

word about issues important to thebusiness community. I recently heardabout a new twist on an old scheme tocheat mortgage lenders. Since manyof our readers are involved in eitherreal estate or finance, I am passingthis on as a word of warning.

Scott Bice, commissioner with thestate of Nevada’s Mortgage LendingDivision, recently circulated a bul-letin to consumers, as well as realestate and mortgage companies,about “fraudulent and deceptive”verifications of assets for credit.

A person or company wanting toborrow money may “rent” capitalfrom an online company, which offersto set up a bank account in the appli-cant’s name. The “assets” are set up asa sub-account of the company’s mas-ter bank account. When a lender callsto verify that the assets are there, the

answer is always “yes”, whether ornot the potential borrower actually hasany of his own money in the bank.

Companies advertising this ser-vice have Web sites filled with testi-monials from customers who haveused borrowed credit to get loansfrom lenders that wouldn’t have fi-nanced them otherwise. One websitesays: “Our product makes your cap-ital-seeking campaign easier andprovides incentive for the lender tofund your package. Attaching ourproduct to your loan package, line ofcredit request, or business projectwill make your capital-seeking pro-posal more appealing to yourlender…Your loan, line of credit orborrowing package will stand outwith our product.” So, are thesecompanies actually helping out JoeBusinessman or Jane Homeowner intheir fight against the big bad banks,which is what these people want usto believe? No. They’re just allow-ing more risky loans to be made.

It seems like integrity and honesty are becoming relics of the past. Every day there’s

another news article about identity theft, Internet scams, Enron-style corporate fraud

or political corruption.

Continued on Page 8

A

6 January 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 KathleenFoley. Unsolicited manuscripts must be accompanied by a SASE. Nevada BusinessJournal 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]

EDITOR-IN-CHIEFKathleen Foley • [email protected]

ASSOCIATE EDITORApril McCoy • [email protected]

ART DIRECTORJoe Thomasula

CIRCULATION DIRECTORMark Keays • [email protected]

RESEARCH / RANKING [email protected] EDITOR

McKensie Keever • [email protected] MARKETING DIRECTOR

Harry Benson • [email protected] WRITERS

A. Larry Aaron • Doresa BanningJennifer Rachel Baumer • Tiffannie Bond

Honorée Corpron • Liz Gamble • Steven KondrupDietmar Petutschnig • Jessica Santina

Chrysanthe Georges Sawyer • R. Keith SchwerMike Sullivan • Jerry Trenberth

ADVERTISING / SALESConnie Brennan • [email protected]

Sheri Lautherboren • [email protected] Perkins • [email protected]

Lucy Cox • [email protected] Richardson • [email protected]. ASSISTANT TO PUBLISHER

Hollie 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 AuthorityHarry York • Reno-Sparks Chamber of Commerce

Web Site: nbj.com • nevadabusiness.com TopRank Nevada: topranknevada.com

B P AAPPLIEDMay 2005

A division of BUSINESS LINK, LLC

How are government agencies inNevada keeping up with the state’stremendous growth? Find out howinfrastructure is being built to meetthese demands.

Nevada’s construction industry ispreparing for the 2007 legislativesession. This articles features inter-views with some of the leaders whowill be putting their issues in front ofthe state’s lawmakers.

S P E C I A L R E P O R T : The city of North Las Vegas is one ofthe fastest growing cities in thecountry. Find out why it is now con-sidered “A Cut Above.”

January 2007 • Volume 22 • No. 1

January 2007 7

B U I L D I N G N E V A D A

4 CommentaryLYLE BRENNAN

“Renting” CollateralA Cautionary Tale

10 Business Up FrontLitigation as a Growth IndustryOwn Your Own Cruise ShipCities Guardedly Optimistic About Fiscal Health

74 Nevada Briefs• Bank Receives Permission to Organize• Northern Nevada Medical Center Expands• New People Mover Planned for McCarran• Ford Motor Credit Expands Henderson Operation• Ely School Develops Biomass Project

75 Compassionate CapitalismEaster Seals Southern NevadaHelping Nevadans with Disabilities

76 Face to FaceLaVonne N. Brooks HSI (High Sierra Industries)Joseph CrisciCrisci Custom Builders

77 Inside PoliticsMIKE SULLIVAN

Constitutional ChangesThe Voice of the People?

78 Tech PageDIETMAR PETUTSCHNIG

Text MessagingWhat Business Owners Need to Know

79 Speaking for NevadaSTEVEN KONDRUP

Payday Loan RegulationsProtecting Nevada Borrowers

80 Expert AdviceCHRYSANTHE GEORGES SAWYER

Commandment for Goal-SettingMake Goals Vivid and Visible

82 Expert AdviceHONORÉE CORPRON

Commandment for Goal-SettingMake Goals Vivid and Visible

84 Money ManagementJERRY TRENBERTH

Trust Deed InvestmentsOverlooked, Underappreciated

85 Vital SignsLIZ GAMBLE

Organ and Anatomical DonationTwo Organizations Educate the Public

86 Business IndicatorsR. KEITH SCHWER

62 Building ConsensusConstruction Industry Faces the 2007 LegislatureJESSICA SANTINA

71 Jaynes CorporationNew Strategies Overcome ChallengesTIFFANNIE BOND

71 Commercial Real Estate Market ReportThird Quarter 2006 – Retail Market

72 Building Nevada News in Brief

• 1.5 Million Square Feet of Industrial Space Underway • Lear 429 Breaks Ground• The Village at The Cauldron Breaks Ground • $412 Million Retail Portfolio Sold • Shea Commercial to Be Reorganized• NAIOP Launches Northern Nevada Chapter

F E A T U R E S12 Infrastructure and Growth

Staying Ahead of the CurveJENNIFER RACHEL BAUMER

20 Employee Healthcare BenefitsFinding Ways to Overcome ChallengesDORESA BANNING

29 Industry Focus: Law FirmsIndustry Focus: Young Entrepreneurs

C O N T E N T SD E P A R T M E N T S

12

8 January 2007

of the amount of capital used, if theydon’t intend to use it as collateral?

Bice’s warning continued, “Anybroker or lender encouraging or ac-cepting verifications of deposits or as-sets from this or similar services couldalso be subject to administrative ac-tion for failure to have quality controlsin place or failure to follow estab-lished quality control procedures.”

Bill Uffelman, head of the NevadaBankers Association, said mostbanks have sufficient quality con-trols in place, so they are unlikely tobe defrauded by these schemes. Hesaid their victims would more likelybe second-tier lenders that specializein borrowers with bad credit. “Nowthat the housing market has cooledand there are fewer investors tryingto flip properties for a quick profit, Isuspect we’ll see less of this,” he ex-plained. “However, there are alwayspeople out there trying to make adishonest buck. Where there’s a will,there’s a criminal.”

As we start off the New Year, let’sresolve to be more vigilant, on bothpersonal and professional levels. Jan-uary might be a good time to makesure our computer networks are se-cure, our company websites are pro-tected, our lending practices providemaximum protection and our employ-ment policies shelter us from claimsof harassment or discrimination. Itmight also be a good month to exam-ine our insurance policies, both per-sonal and professional, to make surewe have adequate coverage.

At Nevada Business Journal, we’llcontinue to keep you informed onways to protect your company andmaximize your profits in 2007. Wewish you all a safe and prosperousNew Year.

COMMENTS email: [email protected]

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This development is a 10-acre project, consisting of 12 medical/professional office

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will have high visibility with signage on their buildings as well as a monument sign

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North Buffalo Business Centre

On Buffalo Drive just north of the Buffalo/Cheyenne intersection.

This development will have two 10,000 square foot single-story buildings with units for

sale or lease ranging from 2,500 to 10,000 square feet. The project enjoys the benefit

of having both high visibility and a great location close to Mountain View Hospital,

the Las Vegas Tech Center and US-95. Owners will have signage on the building and a

monument sign fronting Buffalo, as well as an electronic reader-board for personalized

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Copper Pointe Business Park

Fronting the I-215 Beltway between Sunset Road and Russell Road.

Copper Pointe Business Park is a 74,000 square foot high image office park, consisting

of two (2) two-story buildings with units for lease or sale ranging from 2,500 to 37,000

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Cheyenne Fairways Business Center

Cheyenne west of Durango, fronting the Durango Hills Golf Club.

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10 January 2007

Most new cruise ships carrymore than 3,000 passengers,and bigger ships are on the

way. How big? Some now have their ownzip codes. Cruise lines seekingeconomies of scale are retiring their mid-sized ships, and a company called CondoCruise Lines International is buying themto turn them into floating luxury condoprojects. The Florida-based companyspends between $15 million and $20 mil-lion to refurbish each ship and convert itsstaterooms into luxury suites containingfrom one to three bedrooms.

More than 10 million people cruiseeach year and 80 percent of them areAmerican. That makes owning acondo on a cruise ship an intriguing“real estate” deal, according to CondoCruise Lines. Since most people can’ttravel the world year-round, they canrent their condo and make nearly$4,000 per week when not using it.Other advantages of owning a cruiseship condo include avoiding monthlybills that home owners would normal-ly pay, such as water, electric,phone/cable and property taxes.

How much does it cost to own acruise ship condo? Units start at$382,000 and go as high as $1.3 mil-lion for a three-bedroom suite.

Like the millions of Americansthey represent, U.S. citieswere able to pay their bills

this year, but are concerned abouthow rising costs will affect theirlong-term financial stability.

More than two in three city financedirectors who responded to the CityFiscal Conditions Survey in 2006 saidtheir cities were better able to meet fi-nancial needs during 2006 than in theprevious year, yet many city officialscite numerous negative factors affect-ing the solvency of their budgets.

Fiscal conditions varied depend-ing on revenue sources. Only one-third of cities that rely on incometaxes saw improving conditions,compared to three of four cities thatuse sales taxes, and over one-halfthat rely on property taxes. Thosecities that relied on property tax rev-enues in 2005 saw income increasesof 2.2 percent (adjusting for infla-tionary factors).

Healthcare and pension costs are in-creasing at a faster rate than city rev-enues. The most common action toboost city revenues during 2006 was toincrease fees and charges for services.

“Cities will need to remain cautiousin the coming years, given loomingfederal deficits and other factors,”said Michael Kasperzak, councilmanfrom Mountain View, Calif.

“Given that cities today receiveapproximately one in four dollarsfrom federal and state sources com-pared to the one in three dollars theyreceived 25 years ago, municipali-ties are finding they must also be-come more self-reliant in terms offunding,” said Brian Murphy, coun-cilman from Cambridge, Mass.

American business, known theworld over for its entrepre-neurship, innovation and com-

petitiveness, might just as easily be rec-ognized for another attribute – its timespent on legal disputes. That’s the con-clusion of a new survey of corporatecounsel from international law firmFulbright & Jaworski LLP.

In its third annual survey of corporatelitigation trends, pulling data from 422 in-house law departments worldwide, Ful-bright found that the average U.S. com-pany faces 305 lawsuits. For large U.S.companies – those with $1 billion ormore in annual gross revenue – the num-ber of lawsuits soared to 556 cases, withan average of 50 new disputes emergingeach year for nearly half of them.

The undisputed champion of dis-putes is the insurance industry, wherethe average company faces 1,696 law-suits. Retailers and energy firms arealso targeted heavily, reporting averagecaseloads exceeding 330 per company.

Seventy percent of the in-house at-torneys surveyed confirmed that theircompanies initiated at least one newlawsuit in the past year as plaintiff. Halfsaid their companies separately faced atleast one new arbitration and one newregulatory proceeding in 2005-06, ontop of their litigation caseload.

Nearly 40 percent of respondents re-ported at least one $20 million suitcommenced against them in the pastyear, and 2 percent faced 50 new suitsor more involving at least $20 millionin claims. The good news for smallercompanies is that firms with revenuesunder $100 million reported an averageof only nine pending legal cases, andspent only $178,000 per year on dis-putes.

Own Your Own Cruise ShipLitigation as a Growth Industry Cities Guardedly Optimistic About Fiscal Health

BUSINESS UP FRONT

http://www.NBJ.com

January 2007 13

Planes, trains and automobiles, airports, roadways, power and water – we sometimes

take them for granted. But every day, more and more Nevada residents put demands on

this critical infrastructure. Behind the scenes, organizations are working diligently and

creatively to hold Nevada’s infrastructure together, and keep pace with growth.

Water, Water – Where?

For the water authorities, both northand south, certain challenges remainthe same: where to find water in adesert. The differences in recent yearshave been the challenges of findingwater in a desert while so many newpeople are pouring into that desertevery day.

So far, the water authorities havekept up with the frenetic pace ofgrowth in Nevada. For Truckee Mead-ows Water Authority (TMWA), every-thing revolves around planning cy-cles. “We’re constantly planning,”said Lori Williams, general manager.“Resource planning leads to facilitiesplanning, which leads to resourceplanning. It’s a constant cycle, updat-ed with information like new de-mands placed on the system in recent

years, what we expect in the future,how the regional plan has changed orif zoning has changed, and then we goback to look at those factors.”

Besides regional planning forwater, resources and facilities,TMWA also determines the storagefacilities and locations throughout itsregion, so its staff depends on a steadystream of incoming data on whichareas are building up most quicklyand where the next demands on waterare going to be.

TMWA also provides services fornew subdivisions once they’re ap-proved. Three years ago, it was issuingas much as 1500 to 1800 acre-feet ofwater a year in new project water ser-vices, a demand which is cooling a bit.

“Currently we’re seeing a generalslowdown in large subdivisions beingbuilt,” said Williams. There are more

applications for commercial projects,including a number of four- or five-unit neighborhood retail centers.

At the other end of the state, PatMulroy, general manager of SouthernNevada Water Authority (SNWA), isstill seeing healthy growth in her re-gion, especially given the recent landreleases by the Bureau of Land Man-agement (BLM). “We have some sig-nificant infrastructure projects,” Mul-roy said. “Three billion dollars worthof facilities need to be built to bringwater from eastern central Nevada inWhite Pine and Lincoln Countiesdown the I-5 corridor.”

SNWA has a good track record forgetting facilities built on time and onbudget. The agency’s issues, Mulroysaid, are more with getting permitsand environmental clearances to de-velop water in the state of Nevada.

Cover Story: Infrastructure and Growth

14 January 2007


“Our greatest challenge is on the re-source end, which isn’t something wecould necessarily be doing better –it’s a time consuming, politicalprocess,” she noted.

Currently, SNWA is awaiting hear-ings with the state engineer on a pro-ject to bring water from the SnakeValley basin on the Nevada/Utah line.The agency is confident it can devel-op the water program without damag-ing the environment or affecting arearanches, but residents in White PineCounty have concerns about the waterusage, and the approval process willtake time. Meanwhile, SNWA hasbeen successful in negotiating a Col-orado River allocation plan.

Mulroy said she expects to see con-tinued growth in Southern Nevada.The housing market is going throughan adjustment now that the investor-fueled buying frenzy has cooled and alot of those homes are flooding the

market. “Until those are sold and themarket settles, I think we’re going tosee a slowdown in new construction,”said Mulroy. “I’ve been talking withhome builders and they’re ratchetingback from past levels. However, oncewe’re past the market adjustment,we’re going to continue to see growth,although it might be a differentgrowth, with more condominiums andhigh-rises and smaller lots being de-veloped. The commercial sector isstill healthy. If you go to the Strip andcount the cranes, there are still somany of them.”

Electric Nevada

Sierra Pacific Resources, the hold-ing company for Sierra Pacific PowerCompany and Nevada Power, is cur-rently the fastest-growing utilitiescompany in the country. While signif-icant challenges arise in meeting the

demands of growth in both the northand the south, Sierra Pacific Resourceis accommodating those demands.

“In 2006, we had near-record levelsof new hook-ups, with approximately48,000 new electric customers inSouthern Nevada and 10,000 inNorthern Nevada,” said Jeff Ceccarel-li, senior vice president, service deliv-ery and operations. “In NorthernNevada, where we also have naturalgas distribution, we added about5,000 new gas customers. That’s a 5percent compound growth rate forSouthern Nevada and 2.5 percent to3.5 percent in Northern Nevada – avery robust gain.”

What does that mean in terms of in-frastructure? In the southern end ofthe state, Nevada Power put in over750 miles of primary cable. Approxi-mately $10 million dollars worth ofstock items must pass through itswarehouses every month to meet na-tive growth load (or, basically, thegrowth of new customers.) Over thelast eight years, some 52 new substa-tions have been added in SouthernNevada. Currently, the biggest projecton the power company’s drawingboard is the coal-fired power plantunder construction near Ely, which isjust one of the infrastructure projectsestimated to cost more than $1 billionin the next five years.

Flying High

The Reno-Tahoe International Air-port (RTIA) receives no tax monies –every bit of its operating dollars aregenerated by the airport itself. Thisexplains why the first order of busi-ness as the airport grows is to rebuildthe concourses, making concessionsavailable for travelers after they’vepassed through security. The airportneeds to generate revenue.

Still, post 9/11, Northern Nevada’sairport is doing well. “We’re feelingthe effects of growth positively,” said

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K rys T. Bart, executive director, Reno-Tahoe Airport Authority, was recently

chosen Airport Director of the Year for air-ports serving fewer than 5 million passen-gers a year. “I was very honored to be se-lected,” she said. “This is particularly anhonor because the award is judged not bypopularity, but by a panel of your peers. Theylook at specific things, such as organization-al effectiveness, commitment and work inthe community, financial success and howmuch revenue the airport produces.”

Bart was also selected chairman of theAmerican Association of Airport Executives,which gives her the opportunity to representthe U.S. aviation community and, she said, “Itputs Reno on the map and brings great at-tention to our city. It’s an opportunity to inter-

act with decision makers nationally and inter-nationally, so there are important dividends;when I meet with people who have no clueabout Reno, we’ll be able to change that.”

Bart has been with the airport since De-cember 1998. At that time, the airport wasfacing serious financial trouble and air servicewas declining. Since that time, she’s weath-ered the events of September 2001 andwatched as Reno’s airport rebounded.

Things are looking up at the airport. With-in the next few months, Reno-Tahoe Interna-tional Airport (RTIA) will add six new outgoingflights. While the number of flights may cur-rently be down, the number of seats filled perflight is up and cargo transport is up to threetimes the national average. RTIA receives notax monies and generates its own revenue.

Krys T. BartReno-Tahoe International Airport

16 January 2007


Krys T. Bart, executive director,Reno-Tahoe Airport Authority. “Takea look at the infrastructure we’ve putin place: the runways and taxiwaysand the air field. We’ve planned forthe future. We won’t need any moreinfrastructure for a long time.”

Cargo transport has grown to threetimes the national average year afteryear, which speaks well of the eco-nomic vitality and prosperity of thebusinesses locating in the area, ac-cording to Bart. And when it comes togrowth, the airport is taking a mea-sured approach, looking first at re-building the concourse area and goingforward from there.

With major air carriers in bankrupt-

cy or restructuring, fleets are chang-ing and more regional carriers are es-tablishing service. “The long and theshort of it is there are just fewer jets inthe market, but the load factor – thenumber of passengers in seats – is up,so with high levels, we have moreseats filled on every plane,” said Bart.And soon there will be more planes –in the next month, six more flightswill be leaving RTIA regularly.

Reno’s successful airport and its di-rector have been noticed, too. Bart re-cently received the Airport Director ofthe Year award for airports servingless than 5 million passengers annual-ly (see sidebar). And this success isvital to the continued prosperity of the

region. “I think it’s important to notethe critical nature of airports in theircommunities,” said Bart. “Any suc-cessful community in the world has asuccessful airport. Years ago, townssprang up near railroads, which gavethem an economic boost. Now the air-port fills that role.” RTIA isn’t just re-sponding to Northern Nevada’shealthy economy, said Bart; it’s actu-ally impacting it.

At the other end of the state, Mc-Carran International Airport is verymuch involved in building new infra-structure. In fact, it’s been building aslong as Randall Walker, director ofaviation, Clark County, has been there– 16 years.

“We obviously feel a direct impactfrom growth,” said Walker. “Analysisshows over the last couple of decades,that for every hotel room added to thecommunity, 320 additional airportpassengers are generated – that’s 160coming in and 160 going out. So theaddition of 10,000 hotel rooms meansanother 3.2 million passengers mov-ing through the airport. We need toplan facilities to accommodate thatnumber of passengers.”

The county has a master plan inplace that shows what needs to bebuilt to reach an ultimate airport ca-pacity that is sustainable. “You can al-ways do more for a period of time, butat some point you have to stop,” saidWalker. “You can’t run at 100 percentforever. Sustainable capacity is 53million passengers a year, and inorder to handle 53 million passengerswe have to know what facilities tohave in place. We already have themaster plan and all the significantprojects are under construction orunder design.”

Those significant projects includeimprovements to the airfield, the ter-minal and the roadway leading to theairport, to the tune of some $3.8 bil-lion over the next five years.

Galena Creek Bridge on I-580 in Northern Nevada is one of the many infrastructure projects underway.

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18 January 2007

Road Trip

Some time ago Nevada Departmentof Transportation (NDOT) identifiedand initiated five “super projects”across the state. Those included theCarson freeway and the I-580 projectin Northern Nevada and three projectsin Southern Nevada – the widening ofI-15 between the California-Nevadastate line and the exit at TropicanaBoulevard, widening U.S. 95 from theSpaghetti Bowl to Craig Road, andbuilding the Hoover Dam bypassbridge south of Hoover Dam.

Those projects are all either cur-rently underway or almost complet-ed, according to Scott Magruder,public information officer, NDOT.The second phase of the Carsonfreeway project has been awardedto a construction company andwork is set to start. The I-580 free-way extension connecting Reno atMt. Rose Highway to Washoe Val-ley at Bowers Mansion – a $393million contract – was recentlyawarded. The U.S. 95 project iswrapping up, as is the Hoover Dambypass bridge and the I-15 project.Everything has either been fundedor is almost complete.

This led NDOT to identify the nextbatch of highway improvements – themega-super projects – identified asProject Neon, which will address theI-15 corridor in Las Vegas from I-515/U.S. 95 through the Las VegasSpaghetti Bowl, the I-515 widening,and others planned for both NorthernNevada and Southern Nevada. Due toa $3.8 billion shortfall projected for

highway infrastructure over the nextfew years, Gov. Kenny Guinn has setup a Governor’s Blue Ribbon TaskForce to study future highway pro-jects across the state.

Inside Washoe County limits inNorthern Nevada, the Regional Trans-portation Commission (RTC) is hardat work. The agency is looking forways to move people along the down-town corridors quickly and efficiently,especially as downtown condomini-um growth brings more and more res-idents into the heart of Reno. The toll-free Sierra Spirit bus servicecontinues to shuttle residents and vis-itors through the downtown entertain-ment core and up to the University ofNevada, Reno. To minimize fuelcosts, as well as reduce emissions, theRTC is also looking at a hybrid buswith both gas and electric motors.

In addition, the RTC is looking forways to clear the air while moving thepeople. “Developing both a stable andclean source of renewable energy isimperative to our collective future,”said Derek Morse, RTC deputy exec-utive director. “Nevada has abundant


Work is progressing at the Martin Luther King exit on US 95 in Las Vegas.

Daniel J. Sklar

January 2007 19

geothermal, solar and wind resources,which can be combined with both es-tablished and emerging technologiesto meet our future energy needs.”

RTC is developing a Hydrogen FuelProject (H2Fuel) in a joint effort withthe University of Nevada Desert Re-search Institute, Ormat Air Productsand the Department of Energy.H2Fuel will tap Northern Nevada ge-othermal resources to produce the hy-drogen that will be used to power afleet of transit vehicles. The venture,which will be the first real-world,large-scale H2Fuel plant in the U.S.,includes plans for an anticipated 45-vehicle fleet.

Even with Northern Nevada’sslowdown in new construction andhousing, Morse said future businesslooks good. More land-use develop-ments are being proposed and jobs inthe area, formerly expected to in-crease by 94 percent between 2002and 2030, are now expected to in-crease 103 percent.

“Obviously, we have a very at-tractive community in theReno/Sparks area and we’re receiv-ing increasing attention from peo-ple in other areas. People today likeit here and their children tend tostay in the area,” said Morse. “It’s agreat place to live, a great economy,there are expanding job opportuni-ties in high-tech, high-paying em-ployment and businesses want to dobusiness here. In so many ways,RTC is playing a key role in sus-taining this positive atmosphere,now and for the future, in terms ofquality of life, transportation, cleanair and the ability to get aroundwithout traffic congestion.”

Flip a switch, turn a tap, hail abus – Nevada’s infrastructure andthe organizations behind it arekeeping pace.

Jennifer Rachel Baumer is a freelancewriter based in Northern Nevada.

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20 January 2007

It’s well known that health insur-ance costs are rising in Nevada.“Over the past five years, we’ve

seen premiums increase by almost100 percent,” said Ty Windfeldt,sales and service director for Home-town Health, a not-for-profit com-pany owned and operated byRenown Health (formerly WashoeMedical Center).

What may not be well known, how-ever, is how employers and health in-surance companies are reacting. Theirresponses run the gamut from slash-ing or eliminating benefits to institut-ing programs that make employeesmore accountable for their healthcare.

Why the Cost Increase?

Several factors contribute to thegrowing costs of health insurance.The price of healthcare itself – physi-cian services, hospitalizations andprescriptions – is escalating. Newtechnology and pharmaceuticals areexpensive.

In addition, when it comes tohealthcare, people demand the best.“We want to have it all, and we don’twant to wait in line,” said DavidDahan, chief executive officer ofOrgill Singer, an insurance agencybased in Las Vegas. “We want manydifferent providers to be available tous in a timely fashion. We want themto be educated. We want everything.There is a cost to that.”

As the population ages, more peo-ple are utilizing services. “Becauseof the large baby boomer population,a disproportionate number of peopleare now reaching the age where theyhave some major medical situations,”said Omar Rodriguez, senior vicepresident of market development forFiserv Health, a company that buildscustomized health plans for largeemployers.

Inefficiencies in the healthcaresystem are costly. One example isthe current system of transferringand disseminating patient informa-tion from one provider to another.

Because that system is inefficient,providers don’t always receive all thenecessary information, which some-times results in inadequate care, oftenwith a very costly outcome.

With shortages of professionals –nurses, pharmacists, respiratory thera-pists, radiology technologists andmore – healthcare entities must paypremium dollars to hire people fromplacement firms.

In addition, inadequate governmentreimbursement to care providers forhealthcare services causes careproviders to shift the financial burdenonto those who can pay. Similarly, theinsured wind up paying for the unin-sured and underinsured population.According to Mike Murphy, presidentand general manager of the AnthemBlue Cross/Blue Shield for NevadaPlan, this population consists of threesegments: people eligible for govern-ment programs who aren’t enrolled orengaged in them; people with house-hold incomes greater than $50,000who don’t see value in health

Employee Healthcare BenefitsFinding Ways to Overcome Challenges

January 2007 21

insurance companies’offerings; and peo-ple with lower incomes, said Murphy.

The uninsured typically pay lessthan 1 percent of billed charges, ac-cording to the Nevada Hospital Asso-ciation. Consequently, providers mustwrite-off the remaining balances asbad debt, and the cost of that getsshifted to people who do have insur-ance coverage. In 2005, premiumcosts for family health insurance cov-erage provided by private employersincluded an extra $922 in premiumsdue to the cost of care for the unin-sured; premiums for individual cover-age rose by $341, according to a re-port from Families USA, a non-profitorganization dedicated to achievinghigh-quality, affordable healthcare forall Americans.

At least 18 percent of Nevada’s res-idents are uninsured, and an addition-al 20 percent have inadequate cover-age, according to the Henry J. Kaiser

Association, said he’s even seen peo-ple opt for a lower-paying job that of-fers good benefits instead of a higher-paying job with fewer benefits.

When it comes to perks, health ben-efits are critical. “Potential employeesnot only look at their salary andwages, but because of the cost ofmedical care, the benefits part of of-fering compensation plays a very crit-ical part in recruiting and retainingemployees,” Rainey said.

Further complicating the issue,“Many employees have an entitle-ment mentality, believing that em-ployers owe them benefits,” Liechtyadded.

The Employers’ Point of View

Employers have to weigh their em-ployees’ expectations of benefitsagainst their companies’ budgets.“Clearly, employers have to engage in

Family Foundation’s 2005 State Factsreport. Nevada ranks eighth on a listof states with the greatest number ofuninsured, according to data providedby insurance provider Aflac Inc.

The Employees’ Perspective

As the cost of health insurancerises, so does the demand for it frompotential and existing employees.“People flock to the companies thatoffer benefits,” said Sandra Liechty,president of the Southern NevadaHuman Resources Association andvice president of group services forCustom Benefit Consultants, a healthinsurance broker. “I’ve seen peopleleave companies and then go back be-cause of the benefits package. Thepay was comparable, but the benefitswere so much higher.”

Mike Rainey, president of theNorthern Nevada Human Resources

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a balancing act,” said Don Giancur-sio, senior vice president of sales andmarketing for Sierra Health ServicesInc., Nevada’s largest healthcare in-surance provider. “They want to pro-vide benefits. In most cases, they needto provide benefits to attract and re-tain employees.”

One camp of employers viewshealth benefits as an expense thatneeds to be reduced, Rodriguez said.Some companies, particularly thesmaller ones, reduce the cost by elim-inating benefits. “When you force anemployer to choose between eliminat-ing benefits or going out of business,they’re going to eliminate benefits,”Liechty said.

Another option is to scale back onbenefits, offering employees coveragein the form of limited health insuranceplans. “(The plans) aren’t meant totake care of serious illness,” Dahansaid. “They’re just meant to help out.”Other companies shift more of the pre-mium costs to the employees or offerhealth benefits only to employees inselect jobs. Others avoid having toprovide health benefits altogether byhiring only contract and part-time em-ployees. “This creates a repeatingcycle that ultimately increases thepool of those without insurance orwithout adequate insurance,” said JoshCharlebois, communications special-ist for Saint Mary’s Medical Center.

Some employers prioritize theirbenefits. They may reduce perks inone area – for example, the holidayparty – to supplement in another:health insurance. Some extend the pe-riod of time before new employeesbecome eligible for health benefits.

The remaining camp of employersis working to turn their employeesinto better, more active consumers ofhealthcare. “Business owners, CEOsand CFOs are all taking a very in-volved role in the process of renewingtheir health plans,” Windfeldt said.“Five years ago, they didn’t careabout the cost of health insurance.

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They just knew they had to have it.Today they’re taking a more proactiveapproach.”

Active consumers use healthcaremore wisely, thereby driving down in-surance costs. “There’s a little bit lessabuse, better understanding and betterbudgeting,” Dahan said.

More and more employers are shar-ing with their employees informationabout what health insurance coveragecosts them.

“When you quantify the benefitspackage for an employee, it’s abouteducating and getting them vested inthe process, letting them know thathealthcare is not $20. Healthcare ismore like $300,” Dahan said.

Saint Mary’s Medical Center, forinstance, provides all its employeeswith a document once a year thatshows the cost of their benefits pack-age, including the costs being ab-sorbed by Saint Mary’s. Transparencyis key because employees frequentlydon’t know the actual costs of theirinsurance premiums or of healthcarein general.

“Our industry hasn’t done a greatjob of making people accountable fortheir actions in the last 15 to 20years,” Giancursio said. “We designedplans that insulated people from whatthe true costs of care were. They be-came reliant on plans with low co-pays. That just doesn’t have any sem-blance or make any sense relative tothe actual costs for the services.”

Employees are instituting healthand wellness programs – WeightWatchers and yoga, for example – atthe workplace to encourage healthierlifestyles. Some employers engageoutside vendors, including health in-surance companies, to provide theservices. Others do it in-house. SierraHealth Services, with its Health Planof Nevada insurance coverage, offersemployers wellness plans that covereverything from smoking cessation todisease management. “Knowledge ispower, and employees who make the

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tangible connection between wellnessand reduced healthcare costs are moreinclined to live healthier lives,”Charlebois said.

Often, programs are tied to finan-cial or other incentives for employees.State of Nevada employees who com-plete a wellness assessment get theirhealth insurance deductible cut inhalf. Saint Mary’s offers financial re-bates to employees who meet certainpositive health criteria factors, such asblood pressure, cholesterol, bodymass index and no-tobacco-productuse. Employees who use Saint Mary’son-site fitness center at least 120times a year also are eligible to getmoney back.

“By encouraging wellness througha healthy lifestyle, healthcare costscan be controlled because fewer ser-vices are needed,” Charlebois said.

Some larger companies are payingto have their employees evaluated fortheir wellness level and health riskfactors and then implementing cus-tomized disease-management pro-grams for each person. “I think it’s aconcept that will get some tractionand potentially be applicable in thesmaller and mid-sized accounts goingforward,” Giancursio said.

Hometown Health began offeringits employer groups this service lastAugust. It surveys a company’s em-ployees with a confidential health as-sessment questionnaire and conductslaboratory tests. After analysis, it pro-vides each employee with a confiden-tial report that outlines specific riskfactors and areas for focus. It alsoprovides the employer with a similar,comprehensive report that highlightsthe group’s risk factors. With the em-ployer, its staff develops strategicplans to improve employee health.

“You can’t just create one size fits all– employers are so different,” Wind-feldt said. “We try to tailor-make pro-grams for the specific employer thatwill provide them with an outcome –something that’s measurable.”

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With its WellCheck Program, SaintMary’s Health Plans has providedcustomized programs to many of itscovered employers, such as theWashoe County School District, theSilver Legacy and Sierra PacificPower Co. These offerings rangefrom individual classes to health-as-sessment programs to complete well-ness plans.

Fiserv provides a disease-manage-ment plan for 6,000 Station Casinosemployees in Southern Nevada. Twoof its measurable initiatives includeensuring that expectant mothers re-ceive the best medical care prior todelivery and ensuring that levels ofbreast cancer screening improveyear after year. In addition, Fiservhas bilingual customer service rep-resentatives on site periodically ateach Station Casinos location to as-sist employees.

The insurance companies offeremployers a host of tools to help

them predict future health-insurance-related costs based on their employ-ees’ current health. “We have theability to tell a customer that in thisone location of their operation theyhave 83 women over the age of 40,and 13 of them had a mammogramthis year and five had breast cancer,”Rodriguez said.

The Role of Health Insurance Companies

Along with offering health risk as-sessments and disease managementplans, health insurance companieshave been introducing insurance plansthat put the onus on the healthcareconsumer. These plans, called con-sumer-driven health plans (CDHPs),are high-deductible (generally$2,000-plus) health insurance planswith tax benefits. One such plan, theHealth Savings Account (HSA), is atax-exempt trust that’s set up with aqualified HSA trustee to pay or reim-burse certain medical expenses thatthe insured incurs. The employer andemployee both can contribute tax-freedollars. Contributions to the accountroll over from year to year and em-ployees can take their HSA with themif they change employers.

“HSAs offer employees a way toactively contribute to their own

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January 2007 27

healthcare needs while reducing theirtax burden,” Charlebois said. “Theyempower consumers to take control oftheir own health spending, while alsohelping them understand the truecosts associated with providing care.”

In fact, 25 percent of Americanscovered by consumer-driven healthplans were more likely to engage inhealthy behaviors, and 30 percentwere more likely to get an annualcheckup, according to a 2005 nation-al study by McKinsey & Co.

HSAs aren’t ideal for everyone,however. “An HSA will work for anaffluent, white-collar individual whounderstands how to use it,” Giancur-sio said. “It doesn’t work for someoneon the lower end of the wage scalewith chronic illnesses.”

Some insurance companies, such asSierra Health Services, offer employ-ers a base plan and a buy-up plan.Employers often will pay the costs as-sociated with the base plan and makethe buy-up plan, which offers moreoptions, available to employees attheir cost. Some larger clients havethree or more insurance plans. TheLas Vegas Chamber of Commerce, forexample, which insures about 2,500employees, has a handful.

Insurance companies also areboosting health insurance plan de-ductibles. “As recent as three yearsago, it was very uncommon to see anout-of-pocket maximum of more than$3,000 to $4,000,” Liechty said.“Now, I’m seeing out-of-pocket max-imums of over $10,000. That’s be-coming more of the norm.”

Insurance companies also are mov-ing to higher co-pays, for example,$50 co-pays for specialists. They’remore diligent about requestingHealth Insurance Portability and Ac-countability Act (HIPAA) Certifi-cates of Prior Creditable Coverage sothey can apply pre-existing restric-tions to plans.

They’re also working to better edu-cate healthcare consumers. “Inform-ing the consumer is like magic,”

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Dahan said. “The consumer will makethe system a better system. It works inevery industry, and there is no reasonthat it should not work in healthcare.”

Hometown Health provides quar-terly newsletters to its consumers, in-forming them about a host of topicsfrom necessary medical checkups toselecting a primary care physician. Italso provides a 24-hour nurse hotlinefor people in need of medical advice.“[As a result] we’ve seen the numberof emergency room visits fall off dra-matically and consumer satisfactionincrease,” Windfeldt said.

Some insurance companies aresteering people toward generic optionsfor prescriptions, which are less expen-sive than brand options. Insurancecompanies are also negotiating for bet-ter rates with physicians and hospitals;and they’re implementing administra-tive technology, such as electronicclaims handling, interactive telephonesystems and Web-based applications,to improve efficiency and reduce costs.

On the Horizon

Moving forward, expect thehealth insurance industry to offereven more new products. AnthemBlue Cross/Blue Shield, for exam-ple, will introduce its LumenosCDHP products this year, whichcover preventive care and healthcoaching while rewarding plan pur-

chasers for choosing healthierlifestyles. Also this year, Anthemplans to launch a system to provideemployees and members a betterway to capture personal data foreasy and efficient transfer betweendoctors and hospitals. In addition,it’s working on products and ser-vices for smaller employers, and in-vestigating ways to provide cover-age to more uninsured people.

The future looks good to Giancur-sio. “I think we probably will contin-ue to work our way through some ofthe challenges that face us as an in-dustry,” he said. “Politics play a bigpart of that. The changing of theguard [in Washington, D.C.] willhave an impact. At the end of the day,I believe as an industry we’ll collec-tively rally to come up with solu-tions. The goal is to provide quality,affordable coverage.”

Doresa Banning is a freelance writerbased in Northern Nevada.

“You can’t just

create one size

fits all – employers

are so different.”

January 2007 29

Does age matter in the businessworld? As part of Nevada Busi-ness Journal’s monthly Industry

Focus series, we brought together en-trepreneurs under the age of 40 andasked for their outlook on being busi-ness owners in Nevada. Connie Bren-nan, publisher of Nevada BusinessJournal, served as the moderator forthe event, which included a freewheel-ing discussion of issues such as workethic, credibility, staffing and the en-trepreneurial mindset. Following is acondensed version of the discussion.

Robb Smith: I’m the founder andmanaging partner of Nevada Ven-tures, which was Nevada’s first ven-ture capital fund. I’m also the co-founder of the Reno-Tahoe chapter ofEntrepreneurs Organization (EO). Ihave been involved in several entre-preneurial and start-up companies,

primarily in Northern Nevada andtechnology-based.Gerald Shear: I bought BMW Motor-cycles after selling a real estate com-pany about a year ago. I planned totake some time off from running abusiness, but that only lasted abouttwo months.Kale Flagg: I’m the director andfounder of a development companycalled Stable Development. We focuson corporate office buildings and med-ical buildings. I have never had a jobexcept for the companies I have owned.Sam Cherry: My company, CherryDevelopment, focuses on residentialhigh rises in the downtown area ofLas Vegas. We’re also looking to buildin the downtown Henderson area.Mark Cenicola: Cenicola-Helvin En-terprises hosts a variety of websites,from technology news to classifieds.We also provide business solutions

FRONT ROW (LEFT TO RIGHT):

Sam Cherry Cherry Development

Robb Smith Nevada Ventures, L.P.

Douglas Geinzer Recruiting Nevada

Darik Volpa Understand Surgery

Mark Cenicola Cenicola-Helvin Enterprises

BACK ROW:

Bianca Minnozzi Rolladen Shutters

James Kilber James Kilber Investments

Paula Yakubik MassMedia Public Relations

David LaPlante Twelve Horses

David Goldwater Goldwater Capital Nevada, LLC

Brett Primack Custome Homes by Chateau, LLC

David Stone Nevada Association Services

Gerald Shear BMW Motorcycles of Las Vegas

Zoltan Hollo TerraSpec Development

Jaimee Yoshizawa Pacific Concepts

Kale Flagg Stable Development, LLC

I N D U S T R Y F O C U S

Young Entrepreneurs: A New Generation of Business Leaders

30 January 2007

under our bannerview.com brand.These business solutions range fromemail marketing software, websitebuilding, e-commerce, website host-ing and custom solutions. Basically,we help companies conduct businesson the Internet.Paula Yakubik: I’m the managingpartner and founder of MassMediaPublic Relations. We are a corporatepublic relations and advertising firm.We have 18 employees in Las Vegasand five employees in Reno, and werecently opened an office in Phoenix.David LaPlante: I operate a softwaredevelopment company called TwelveHorses. We have offices in Reno, SaltLake and Ireland.Brett Primack: Our family company,called Primack Valley Companies, hasseveral different real estate and devel-opment components. I also am a gen-eral contractor. We just finished some

four-plexes in Henderson and now weare getting more involved in the in-dustrial and commercial realm.David Stone: I’m the founder ofNevada Association Services. Mycompany is a licensed collectionagency representing homeowners as-sociations in the collection of past dueassessments. I’m a new member ofEO. I have been an entrepreneur for as

long as I can remember. My first ven-ture was in the 7th grade sellingchewing gum to other students. Thatgot shut down, and since then I havehad other start ups. Most of themfailed, but when I started this one, I fi-nally found something that worked,and here we are today.Darik Volpa: I’m the founder andCEO of Understand.com, located inReno. We make medical animationsthat explain surgeries to patients.Doctors will license our product andpeople can go to their website and seea total knee replacement, ACL recon-struction or breast augmentation. Iworked in corporate America for 10years. I’m not a serial entrepreneurlike many of you, but got burned outon the corporate life and wanted to domy own thing. Douglas Geinzer: I’m with RecruitingNevada. We publish the largest networkof employment websites in Nevada,helping companies track why peoplemove here. I am the original founder ofthe EO chapter in Las Vegas. I havebeen an entrepreneur forever. I havenever really worked for anybody.David Goldwater: I formed a compa-ny creatively named Goldwater Capi-tal Nevada. We lend money to devel-opers and builders. It’s hard money;we sell first and second deeds of truststo the public and lend that money out.I worked as a policy maker for about10 years and then started my ownbusiness. Our loans range from abouthalf a million dollars to $15 million.Zoltan Hollo: I have been in Las Vegasfor 13 years. I’m a managing memberof TerraSpec Development, which is aland acquisition and developing com-pany. We focus on the outlying mar-ket, so we don’t have too much goingin Las Vegas right now, but mostly inthe Laughlin and Bullhead, Arizonamarket. Our ultimate goal is to createmaster-planned communities such asthe one we are working on in

Industry Focus: Young Entrepreneurs

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January 2007 31


Steamboat Springs, Colorado rightnow. Currently, we are developingsome multi-family projects.Jaimee Yoshizawa: I’m with PacificConcepts and the Cauldron Tavern.I’m a civil engineer by trade, bornand raised in Hawaii. We do civilengineering, real estate develop-ment, property management andcommercial real estate brokerage.We take one or two projects at atime and do the land acquisition andeverything involved with develop-ment, with property managementfrom ground up, as well as commer-cial and small residential real estate.The Cauldron Tavern, which weown, is a video poker bar.Bianca Minnozzi: I have been in Vegasfor about 38 years and I own RolladenShutters. We are family-owned andhave been in business for 20 years.We manufacture and sell RolladenShutters to businesses and residentialhomes. They are important for energyconservation and security.

Connie Brennan (Nevada Business Jour-nal): What is the biggest challenge ofbeing a young entrepreneur? What isthe biggest reward of owning yourown company?

Primack: I’m going to answer thesecond question first. I have two kids– six and eight – and owning my ownbusiness means I can spend moretime with them. I don’t have a bosssaying I have to be there from 9:00 to5:00. The biggest challenge on theflip side is managing time. It doesn’tmatter if you are a young entrepre-neur or an older entrepreneur – man-aging your time to make sure you cando everything you want to accom-plish is a challenge.Cenicola: The best thing about being anentrepreneur is I’m actually doing whatI love to do, and I think that’s the mostimportant thing. It’s funny that David

started as an entrepreneur selling gum tokids in school and got shut down. I gotshut down in fifth grade selling Now-n-Later candies. Flagg: Most people have their incomeand define their lifestyle within that in-come. As entrepreneurs, we can definewhat kind of lifestyle we want and cre-ate the income we want so we canachieve that lifestyle.

Brennan: Have you ever consideredworking for anyone?

Cenicola: Yes, I have worked forother people. I was actually a networkengineer for the City of Las Vegas asa technology person. There are a lotof people out there who are a lotsmarter than I am, when it comes totechnology and programming. So, I

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figured I could run the business sideand find the talent who are much bet-ter at doing the dirty work, and letthem be the best at what they do.

Brennan: The No. 1 challenge for mostbusiness owners is finding the rightpeople. Is that something you face aswell? How difficult is it for you to findqualified people to staff your company?

Volpa: We hire a lot of technologypeople. My biggest challenge is beingsuccessful at getting high tech talentto Reno. We recruit in the Bay areaand in Sacramento. Trying to recruitin Las Vegas and other places is by farthe No. 1 one challenge, especiallywith 4 percent unemployment.LaPlante: Finding quality labor is al-ways a challenge. As a young entre-preneur, it’s also important to avoidthe pitfalls about being optimisticabout what you want to make. That’swhere groups like EO can be really

helpful. Sometimes you have to firesomeone, and that just rips you apart,and you probably did it two years toolate anyway. I think everyone at thistable has probably gone through that.Stone: My business is all customerservice-oriented. I have a hard timejust finding a receptionist who sharesthe same ideas I have – when some-one calls and says, “Thank you” and

your receptionist doesn’t say “Uh-huh,” but says, “You’re welcome” or,“My pleasure,” or “Anytime.”Yoshizawa: On the flip side, there’salso such an appreciation for findingthe right people and then surroundingyourself with them. Then it seems likeall these other people tend to gravitatearound you. I have so much more ap-preciation for my staff right now thanI ever did when I first started out.Flagg: For me, the challenge is not find-ing people willing to take the salary, butfinding people who don’t have what weterm a minimalist attitude. There are somany people who just do the minimumamount. When you get a quality person,you start getting momentum and youget some good people who attract moregood people. When you get one or two,they see the passion, they live off thepassion, and then other people are at-tracted to that. Maybe they don’t wantto take risks, but at least they have thework ethic. They want to take the mostadvantage of situations, as opposed to aminimizing them.

Brennan: Is it difficult for you to getrespect from prospective clients be-cause of your youth?

Cherry: It’s the banks. When you are24 years old and you are going to abanker asking for $60 million, if youare knowledgeable about your projectand about your industry, it makesthings much easier. Hollo: I face the same challenge. Ithink the way you get respect is tosimply know what you are doing.You can always get somebody’s re-spect if you are the best at what youdo. When you start out, that credibil-ity and trust are important.

Brennan: But if you are 24 years old,how do you get your financing?

Hollo: I believe banks focus on peoplefirst. I found a local banker and ended

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up getting my first loan for $16,000. Cherry: Your knowledge of yourbusiness is also important, and theysee that. Geinzer: For my first few start-ups, Iused credit cards and family. As I con-tinued to grow, I had some hard times,but I have done it all with my ownmoney. So, I don’t go to a bank any-more. I find it’s smarter and easier tomake the money and only grow basedupon what you are bringing in.

Brennan: In every roundtable, one ofthe common threads is always thecomplaint that the new generation,your generation, doesn’t have thework ethic of other generations. Whatdo you think?

Yakubik: No. I have trouble getting re-spect from the younger generationbelow us. I’ve had people who workedfor me who dictated what they wanted,came in when they wanted and tooktime off when they wanted. That’s whatI have a problem with. Stone: I don’t think there is anythingreally attractive or noble about someonesaying, “I’m working 80 hours a week.”Our older generation always says,“When I was younger, I worked 60hours a week.” Today you may be ableto produce the same amount, but if youare doing it in half the time, that’s im-pressive. So, it’s not really the numberof hours you work. I think it’s the qual-ity of work you are doing. We have theInternet now. Everything’s different. So

I think we have to keep that in mind.Geinzer: It comes down to how youwere raised and what part of countryyou were born and raised in. My com-pany attracts a lot of people from theEast Coast or Midwest because theybring in a sharper work ethic. Nothingagainst the West Coast, but a lot ofthis population wants a job wherethey don’t have to work. We find wewould rather have people from theeast than the west.LaPlante: Our best recruits don’tknow to look for us and they’re notlooking for a job. They’re just lookingfor social interaction. So we need to“hang out” where they do and makecontacts with them. It’s that sociallyconscious, younger employee whomakes us a better company. It’s that20-something crowd. They’re very so-cially conscious and they’re willing towork 60 hours a week if they feelthey’re participating in somethingother than just the bottom line. Andthey make really great employees.

Brennan: Does the educational sys-tem offers enough classes on entre-preneurship?

Primack: No, it’s hard to teach risk,though. I mean, how can you teachsomeone how to accept risk? A classwon’t teach you that. Experience will. Stone: There’s a drive in most entre-preneurs that simply cannot be taught.I’m sure that most of us in here sharethe same traits. You just don’t learn

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that in college or graduate school.College teaches you the basics: fi-nance, accounting, human resources,marketing and management.

Brennan: So, do you think there is avoid in the education system?

Stone: I don’t know firsthand, butI’m sure there is a void. I think thereis always room for improvement. Of-fering classes on becoming an entre-preneur is only part of the equation.Even you had a great course of studyat UNLV and you had a class of 100people, you are still only going to get5 to 10 percent of the students who goout and become successful.Smith: We’re working on setting upan entrepreneurship minor at the Uni-versity of Nevada Reno and have beenfor some time. As we work throughthis, I often say that entrepreneurshipis a cultural innovation. Look at Sili-con Valley. Of course, you really want

to see what drives students to feelconfident about going out and tryingit on their own. They’re in a culturewhere their examples are successfulentrepreneurs. Using examples in ourown community that show people itcan be done, and then translating thatback into the university system, willhave a market affect. We lecture pret-ty regularly at the entrepreneurshipschool. We tell them that the universeis far more malleable than what mostpeople think. You have to have a cre-ative vision, be stubborn with yourwill and execute it. So follow yourpassion and don’t be afraid. For thosewho get it, I think they have just asmuch capacity to become an entrepre-neur as any of us. LaPlante: For the past two years, theCenter for Entrepreneurship and Tech-nology has put on a statewide businesscompetition for college students. It’sdone in Arkansas and Oklahoma aswell. The Reynolds Foundation kicks

in a sum of money to provide cashincentives for better business ideas.These kids get so much experience. Iwish I could go back to college nowand get the same experience they aregetting. They have the chance to inter-act with folks like us and find out whatthey really need to know. You can’tteach entrepreneurship. You can onlypass on experiences. Stone: I think one of the things thatshould be taught is that if you are mo-tivated to be creative, if money is yourprimary motivation, you’re probablynot going to be successful at whatev-er you do. There’s got to be some-thing else, whatever it is. If it’smoney, it’s not going to happen.

Brennan: How do you even knowabout a business plan when you are20 years old?

Stone: Trial and error.LaPlante: Yes.

Brennan: Do you use organizationswith mentoring programs?

LaPlante: I know in Northern Neva-da they have SCORE (Service Corpsof Retired Executives). It is retiredbusiness people who are giving backto the community. They have be-come involved in Northern Nevadawith helping some of the collegeprograms. Cherry: I think mentoring is the key. Iwas mentored, not just in business,but in life as well, so I feel like it ismy responsibility to teach what Iknow to someone who shows an in-terest. I failed many times, but I havelearned from each failure, and it wasall from mentoring. And I think it is ahuge responsibility. Any way I canhelp someone who shows an interest,I would love to help.Stone: Giving back to the communi-ty is extremely important to my com-pany, just because what we do often

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January 2007 61


has a negative connotation. We’re acollection agency and we also workfor homeowners associations, sothat’s a double whammy. We’re veryactive in giving back to the commu-nity. We want people to know wearen’t horrible people. During theholidays, we sponsored three fami-lies and made sure all our employeesparticipated. It is just such a greatfeeling to give back to the less fortu-nate in the community.

Brennan: At the end of the day, whatreally sets you apart as an entrepre-neur?

Volpa: Risk. The desire to take risks.Stone: Fear.Smith: Especially fear. Yoshizawa: It’s just never giving up.You can’t teach this to anybody atschool, but being successful is a lotof failures. It means picking yourselfup time after time. Nobody is goingto teach you how to not give up and,when you have a problem, how tofind a different way to solve it.Flagg: I don’t think anyone at thistable would be successful as an entre-preneur or CEO if they weren’t will-ing to bet on themselves. We are ourbest bet, and we create the lifestylewe want, as opposed to limiting ourlifestyle based on somebody else’s es-timation of our value.Yoshizawa: There have been a lot oftrial and errors, and a lot of hard-ship. If I wanted to close up shop, Ican’t do it anymore because I’mgoing to affect so many other peo-ple’s lives now.Goldwater: It’s a combination ofbeing appropriately dumb and ap-propriately smart. You have to bedumb enough to believe you can dosomething and smart enough toknow you are actually able to exe-cute it.Smith: I think there’s a thirst forfeeling alive and innovative, and

challenging yourself. The flip side ofthat is the fear you’ll wake up someday and realize that you didn’t chal-lenge yourself. Cenicola: Numbers are actuallywhat motivates me. It’s getting thenumbers right and adding upsomeone’s score if they took achance to win. Having the biggestnumber is the way to win, and

money is the easiest measurementof your success because it showsyou took almost nothing andturned it into something.Goldwater: One of the developersI work with says he categorizedentrepreneurship into three phas-es. First you’re crazy; second,you’re a visionary; and third, youare lucky.

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Nevada's construction industry is prepar-ing for the 2007 legislative session. Busi-ness leaders interviewed for this story in-clude (left to right): Senator Warren Hardy,Associated Builders and Contractors; SteveHolloway, Associated General Contractors;Cindy Creighton, Nevada SubcontractorsAssociation; and Tony Dazzio, NAIOP.

January 2007 63

BUILDING CONSENSUSC O N S T R U C T I O N I N D U S T R Y F A C E S

T H E 2 0 0 7 L E G I S L A T U R E

Building Nevada: Building Consensus

It’s been a turbulent couple of years.Since the 2005 legislative session,Nevada has experienced one of the

country’s biggest housing booms,then a housing slowdown. As one ofthe country’s fastest-growing states,it’s wrestled with managing thatgrowth, which has resulted in soaringenergy prices, limited water resourcesand increased highway traffic.

As lawmakers head into the 2007session, builders, contractors and de-velopers around the state are prepar-ing to go to battle over several ofthese issues, which could ultimatelyaffect everyone in Nevada.

Infrastructure Issues

“We’ve been advising legislatorsthat Nevada’s infrastructure needs tobe addressed and now it’s come to thepoint where we’re facing close to a $4billion bill in order to pay for infra-structure over the next 10 years, andthat’s just to get to the most basiclevel of service,” said Buzz Harris, as-sistant executive director for theNevada chapter of the AssociatedGeneral Contractors (AGC).

That’s why the Nevada AGC, anon-profit association made up ofapproximately 300 heavy highwayand commercial contractors fromthe top half of the state, intends tolobby for pro-infrastructure mea-sures in 2007. It’s a tough task ina state with a firm low-tax stance,said Jeanette Belz, an indepen-dent lobbyist for the AGC.“Everyone’s always saying, ‘Notax increase on my watch’ be-cause it gets used against themlater, as we saw very clearly inthis last campaign season.”

In the last session, the AGC pro-posed a gasoline tax increase of 2cents per year for five years; althoughthis increase would have been a directform of taxation and use – you don’tuse the road, you don’t pay the tax –the bill died in the Legislature. “Insome ways, we’ve been a lone voicein the wilderness,” said Belz. “But it’sa problem that is not going away.”

What exactly is the infrastructureproblem? That’s what the Governor’sBlue Ribbon Task Force was createdto determine. Following the 2005session, Gov. Guinn appointed 14

legislators and community leaders,including Nevada AGC ExecutiveDirector John Madole, to study fu-ture highway projects in Nevada.They were charged with reviewingthe need for future Nevada Depart-ment of Transportation (NDOT) pro-jects, project costs and revenue pro-jections, and then evaluated potentialfunding options.

Their findings, released in early De-cember 2006, indicate that, wheretransportation is concerned, Nevada isverging on a crisis. Between 1990 and2003, Nevada’s population grew by 92percent, and the number of vehiclemiles traveled on its roads more thandoubled, from 9 billion to 19.46 bil-lion; these numbers reflect the fastestrate of growth in the nation. By 2010,Nevada’s population should grow by2.8 million. Las Vegas is the 10th mostcongested city in the U.S. Unless dras-tic steps are taken, by 2030, drivingtimes in Las Vegas will exceed thoseof present-day Los Angeles.

Currently, NDOT has 10 “Superand Mega Projects” on its books,which are needed to help ease conges-tion and accommodate growth, and

64 January 2007

are expected to total roughly $11 bil-lion. Yet, the NDOT projects a shortfallof $3.8 billion (in 2006 dollars) by2015. And there hasn’t been an increasein fuel taxes, registrations or driver li-cense fees in this state since 1992.

Among the task force’s many rec-ommendations are the following:• Tougher enforcement of vehicle reg-istrations for those moving here fromout-of-state;• Redirecting the entire 2 percent statesales tax on vehicles and vehicle re-pairs to the State Highway Fund forNDOT;• Appropriation of at least $170 mil-lion in 2008-2009 from the generalfund surplus to highways, and any fu-ture general fund surpluses above theexpenditure cap for “one-shot” statehighway expenditures;• Indexing state fuel taxes to inflation,with a maximum increase of 4.5 per-cent annually;• Increasing the driver license fee by$20 for the highway fund.

Another potential drain on theNevada’s highway fund is the Real IDAct of 2005, which states that by2009, each citizen must receive a na-tional identification card from thelocal Department of Motor Vehicles.Issuing this card will require morestaff – and more money. Increaseddriver license fees would help offsetcosts of the Real ID program.

“So far nobody’s come forth with abill relative to highway funding,” saidBelz. “But I assume we’ll advocatefor those, because it has to be ad-dressed.”

The AGC isn’t the only entityconcerned about infrastructure. TheBuilders Association of NorthernNevada (BANN), which represents900 members in the residentialbuilding industry from NorthernNevada, will be looking closely ateminent domain, along with othersin the industry.

In the November election, voterspassed Ballot Question 2, an eminent

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bill draft requests in the works to chal-lenge Question 2, and that BANN willbe advocating for those.

“If you think about how roads areconstructed, it’s a long process,” ex-plained lobbyist Belz. “Land is divid-ed up parcel by parcel. You have to doenvironmental impact studies, getzoning permits and all that. Five yearsjust doesn’t cut it.”

Guy Wells, chairman of the NevadaContractors Association, said hisgroup will also work against the PIS-TOL initiative. “If PISTOL passes, itwill be disastrous for the constructioncommunity, making it impossible to

acquire right-of-way land, and it willmake smart-growth planning impossi-ble,” he stated.

BANN will also advocate for bettermanagement of the state’s resources.As Mike Dillon, BANN’s communityrelations and government affairs di-rector, explained, this begins withwater. In fact, following the 2005 ses-sion, an interim committee was es-tablished to address Northern Neva-da’s water concerns. This SCR 26committee met to discuss how best touse, manage and allocate Nevada’swater resources. Its recommenda-tions will be addressed in the 2007session, and BANN expects to advo-cate for those.

“That will probably mean discussionabout making a new entity, perhaps aNorthern Nevada water authority,” saidDillon, who added that this new author-ity would then be responsible for work-ing with developers, leaving the Truck-ee Meadows Water Authority (TMWA)to deal mainly with ratepayers.

Housing Concerns

The relationship between infra-structure and the housing market iscertainly on the mind of Irene Porter,CEO and executive director of theSouthern Nevada Home Builders As-sociation (SNHBA), which representshome builders, light commercialbuilders and master-planners inSouthern Nevada. As Porter ex-plained, the recent downturn in thehousing market concerns allNevadans. The SNHBA will supportany legislative issues that stimulatethe market.

“The home building industrypays a huge amount of taxes inNevada, which are used for every-thing from low-income housing, toschools, to the state budget,” saidPorter. “As taxes paid by homebuilders slow, so will funding. In-frastructure like roads, parks andcommunity centers won’t be

domain initiative drafted by PISTOL(People’s Initiative to Stop the Takingof Our Land), which seeks to amendthe Nevada Constitution to allow pub-lic land that stands undeveloped forfive years to be sold back to the orig-inal private owner at its original price.The measure must pass once more toaffect the Constitution.

“This is very concerning to us, be-cause we think it will have a signifi-cant negative impact on the state andthe taxpayers, and frankly, on the abil-ity to develop transportation projects,”said Bambi Spahr, executive directorof BANN, who adds there are already

The state faces a budget shortfall for infrastructure projects such as roadwork.

January 2007 67


funded for citizens, so that shouldbe of concern for everyone.”

She said that while the housingslump now provides numerous afford-able options for homebuyers, it hasunfortunately resulted in a number oflayoffs in the industry. “It’ll be partic-ularly important during this session tokeep this in mind, and support noth-ing that exacerbates the situation byforcing more layoffs.”

Spahr added that in the 2005 ses-sion, a study and interim committeewere established to address afford-able housing in the state. She ex-pects BANN to support bill draftsthat would provide for more afford-able housing.

A Shortage of Land

According to Tony Dazzio, presi-dent-elect for the National Associa-tion of Industrial and Office Proper-ties (NAIOP) Southern Nevada

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Chapter, in the next five years, LasVegas will run out of contiguous, in-dustrially-zoned land. This land,which is designated for projects like“big box” developments and distribu-tion warehouses, is essential to the re-gion’s economic prosperity, saidDazzio. “These types of projects sup-port gaming, residents, and goods andservices moving through the city. Ifyou run out [of land], the costs ofhousing those services go up, andthat’s transferred to the customer.”

In the event of a land shortage, tak-ing these services outside the commu-nity would mean a loss of revenue andincreased costs associated with stor-age. “We recognize that growth is es-sential to our economic vitality, andwe support a balance of residentialdevelopment growth as well as indus-trial growth,” said Dazzio. “We wouldoppose converting any industrial landfor residential use, unless a viablesubstitute is located.”

“Balance” will be NAIOP’s prima-ry theme when it comes to taxation aswell, because while Nevada’s favor-able tax structure is good for growth,you can’t have growth without infra-structure. “We support reasonable taxincentives and the authority of elect-ed officials to set a fair tax policy,”said Dazzio, “and we’d oppose anytaxes that would create an undue bur-den for citizens or reduce our favor-able position in the nation. It’s aboutstriking a balance.”

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68 January 2007

Defending the Industry

Senator Warren Hardy of District 12in Southern Nevada is also the presi-dent of the Associated Builders andContractors (ABC) Las Vegas chapter.ABC Las Vegas represents approxi-mately 260 non-union members. Hardysaid that while the 2005 legislative ses-sion was an active one for his chapter,this one should be fairly quiet.

“I think it’ll largely be a defensiveyear for the industry,” Hardy said.“Construction is an extremely impor-tant sector of the economy, and weneed to continue to make sure thatpeople can continue to make a livinghere, so we’ll be supporting legisla-tion that’s in line with that.”

ABC isn’t alone. The Nevada Sub-contractors Association will be de-fending Senate Bill 241, the Right toRepair bill that passed in 2003.“We’ve had three years for that bill to

work its way through the courts, andnow we’ve identified areas for im-provement,” explained Executive Di-rector Cindy Creighton.

When it passed, SB 241 rewrote theNevada Constitution to derail exces-sive construction defect litigationagainst the industry. Contractors andsubcontractors were essentially of-fered the chance to repair defects be-fore facing litigation.

However, Creighton said a lack ofspecificity still exists. “We need to knowwhat we’re fixing,” Creighton said. “Forexample, a plumber may get sued for aproblem that exists in a project contain-ing 200 units. We need to know whatwe’re fixing, and we don’t get that thelawsuits aren’t specific enough.” Andwhile she added that this is more a judi-cial issue than a legislative one, it willcertainly come up in the 2007 session.

The Las Vegas Chapter of the AGCrepresents over 650 member compa-nies from the bottom half of the state.Executive Vice President Steve Hol-loway said they have already submit-ted three bill draft requests for thisnext session, all of which help to de-fend the industry.

The first of these concerns construc-tion managers-at-risk, or project man-agers who provide advice andconstruction leadership on projects,from planning and design, through con-tract management and supervision overthe construction phase. These man-agers contract directly with trade con-tractors, so everyone works smoothlyas a team. But with public works pro-jects, all contractors are hired separate-ly, based on their initial bids.

“The Nevada Contractors Associa-tion is supporting a bill draft requestto add construction management at-risk as an alternative delivery methodon public works projects,” said NCA’sWells. “Nevada is one of only sixstates in the country that doesn't cur-rently allow construction manage-ment at-risk. It essentially allows stateand municipal agencies to award pro-jects on a best-value basis instead ofprice alone, and limits public liability,since the construction manager agreesto assume any cost overruns beyond anegotiated guaranteed maximumprice. The method, as a result, servesas a strong incentive for the job tostay within budget. Public agenciesare very supportive of the idea andhave participated in drafting the legis-lation. Their backing comes as a


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result of several low-bid, high-profileproject miscues, including the ClarkCounty Regional Justice Center andDetention Center in downtown LasVegas, which both opened a year lateand over budget.”

The second bill draft supported bythe AGC pertains strictly to ClarkCounty, and it has to do with trans-portation logistics. The bill is in re-

sponse to a court decision that allowedlocal government entities to issue per-mits on oversized loads and vehicles.

“As an example, if you wanted tomove portions of a tower crane from ayard in North Las Vegas to the Wynnresort on the Strip, you might have toget four different permits: one fromNDOT, one from the county, one fromthe city of North Las Vegas and one

from Las Vegas,” said Holloway.“They might each take a week, andit’s all to move the same load. Time ismoney, and Steve Wynn is not goingto wait six weeks for a tower crane.”

As a result, the AGC went to the2005 session with a bill that said localentities would have to work togetherto authorize the permitting process.The problem, Holloway said, is thatnone of these entities could agreeupon a set of hours during whichthese loads could be moved. The lo-gistics, Holloway said, don’t work.“So we’re going to the legislature in2007 to get them to fix it,” he said.

The AGC’s third proposed bill isanother defensive move, modifyingChapter 624 of the Nevada RevisedStatutes. It states that if contractorsaren’t paid promptly for projects,they may stop work and recoverdamages. While the law is good,Holloway said, it needs “tweaking,”so laborers who complete their por-tion of the work may collect theirpayments without having to waitmonths, or even years, for projectcompletion. This session, the AGCwill spell out conditions, so paymentcannot be held up indefinitely.

A Fresh New Year

Builders and contractors aroundthe state all agreed on one thing: thenewest crop of legislators suggestspromise for the industry. And clear-ly, with the many issues facingNevada’s construction industry, itwill be important to start on theright foot. “Many of the newlyelected people are very thoughtfuland have offered refreshing ideas,”said Porter of SNHBA, who echoedmany others in her industry. “Itlooks like there will be some greatcommittee chairmen in the Assem-bly, so we’re very positive.”

Jessica Santina is a freelance writerbased in Northern Nevada.


http://www.capsource.com

January 2007 71

Brooke. “When mistakes were made, itwas hard to trace them back. There wasno accountability, no process.”

Brooke knew what his branch needed,but he wasn’t sure how to go about at-taining his goals. In preparing materialsfor an upcoming planning session,Wayne Davenport, Jaynes Corporationchief financial officer, sent Brooke a copyof the book Good to Great by JimCollins. Once he read it, Brooke’s goalswere set and his path clear.

“I was reading this book and I was inturn-around mode. This was touching anerve in me,” Brooke said. “We were agood company, but if we were going togo from good to great [something neededto happen].”

He confronted each obstacle andworked on getting “good people on thebus” to create a “culture of discipline,”following suggestions in the book andmodifying them to work within JaynesCorporation. The goal was to begin withbaby steps and gain momentum to leapswhere the company was working to keepup, Brooke said.

“I like to give people tools to work with,”he added. “At the same time, you have tocreate a culture of discipline to keep upwith this stuff or it will eat your lunch.”

Brooke realized one of his most valu-able assets was the Golden Rule, ortreating others like you want to be treat-ed, and he worked on applying it to thebusiness world. He encouraged his teamto apply this philosophy when dealingwith subcontractors, architects, engi-neers and owners. He added personalcommunication instead of form lettersand e-mails. It’s a simple idea, he said,but a successful one.

“For the most part, everyone wants tobe good, wants to succeed,” Brookesaid. “We want to be everybody’s con-tractor of choice.”

Tiffannie Bond is a freelance writer basedin Southern Nevada.

he Jaynes Corporation has aLas Vegas story similar tomany residents – the compa-ny came to the city tem-

porarily in 1988…and never left. Thetiming was perfect, said Steve Brooke,executive vice president of the generalcontracting firm. It was right before thebuilding boom.

When Wal-Mart Stores, Inc. came tothe Las Vegas Valley nearly 20 years ago,it brought Jaynes Corporation with it.The company built two Wal-Mart storesand a Sam’s Club before Jaynes execu-tives decided to set up shop in town.

Jaynes Corporation, which was origi-nally founded as a concrete contractor in1946, has grown over the years until, in2004, it was ranked No. 7 of the Top 125Contractors by Southwest Contractormagazine, which ranks Arizona, NewMexico and Nevada contractors by rev-enue. Southwest Contractor also chosethe company as No. 4 out of the Top 10General Building Contractors the sameyear. The 2004 rankings were based onthe $190 million in revenue tallied by theJaynes Corporation. In 2005, Engineer-ing News Record ranked Jaynes Corpo-ration as No. 188 in the Top 400 GeneralContractors by revenue, which that yearreached $237 million.

The numbers didn’t lie. Jaynes Corpo-ration was growing, but the pace wasslow and steady. After the terrorist at-tacks of 9/11, the company suffered a de-crease in revenue from $250 million to$200 million over the next few years.

Last year, however, revenue jumpedfrom $200 million to $325 million. Therebound was the result of new thinkingamong the company’s upper manage-ment, according to Brooke. “We had tocircle the wagons, get our house in orderand re-grow the company,” he said. Thecompany needed to implement proce-dures, control and accountability. “Therejust wasn’t a lot of that in place when Igot here [to the Las Vegas office],” said

A T T H E T O P

Jaynes CorporationNew Strategies Overcome Challenges

T

Southern Nevada statistics compiled by Applied Analysis.

Northern Nevada statistics compiled by Alliance Commercial Real Estate Brokerage.

ABBREVIATION KEY

MGFS: Modified Gross Full-Service

SF/MO: Square Foot Per Month

NNN: Net Net Net

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

POWER CENTERS

Total Square Feet

Vacant Square Feet

Percent Vacant

New Construction

Net Absorption


Under Construction

Planned

COMMUNITY CENTERS

Total Square Feet

Vacant Square Feet

Percent Vacant

New Construction

Net Absorption


Under Construction

Planned

NEIGHBORHOOD CENTERS

Total Square Feet

Vacant Square Feet

Percent Vacant

New Construction

Net Absorption


Under Construction

Planned

43,699,236

1,201,168

2.7%

210,000

188,146

$1.99

5,219,303

11,550,545

12,790,630

224,985

1.8%

98,000

99,442

$2.17

2,916,583

5,560,221

12,014,605

224,783

1.9%

0

19,685

$1.79

1,179,504

3,871,129

18,894,001

751,400

4.0%

112,000

69,019

$2.00

1,123,216

2,119,195

RETAIL– 3rd Quarter 2006

Next Month: INDUSTRIAL

Commercial Real Estate Report

11,500,000

720,000

6.30%

N/A

N/A

$1.61

N/A

2,267,000

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

na

72 January 2007

on the northwest corner of RussellRoad and I-215. Phase I consists of68,000 square feet, with retail spacedivisible from 1,049 square feet to10,444 square feet and office spacedivisible from 900 square feet to10,444 square feet. Phase II, plannedfor later this year, consists of 100,000square feet. Companies that havesigned leases at the project includeStudio Open, La Pedispa, Lava Java,Meritage Fine Food and Wine, Mer-itage Banquet Rooms, PODS NevadaOffices, Electric Chair, ElectricBeach, Amethyst Massage and im-press communications.

$412 Million Retail Portfolio Sold

Barclay’s Realty & ManagementCompany recently sold a 16-propertyretail portfolio including two Nevadashopping centers for a total price ex-ceeding $412 million. Weingarten, oneof the largest real estate investmenttrust (REIT) companies listed on theNew York Stock Exchange, purchasedCharleston Commons in Las Vegas for$60,225,000. The 337,571-square-footcenter is located on North NellisBoulevard, anchored by Wal Mart.BlackRock Realty, the real estate in-vestment arm of BlackRock Inc., pur-chased Canyon Lakes Plaza for $19.2million. The 65,367-square-foot cen-ter, located on West Sahara Avenue, isanchored by Smith’s Food & Drug.Burnham Real Estate* ONCOR Inter-national’s Retail Advisory Group ne-gotiated the sale.

Shea Commercial to Be Reorganized

Arizona-based Shea Commercial hasentered into an agreement with Pruden-tial CRES Commercial Real Estate to

form a western regional brokerage officethat includes Arizona and Nevada, withplans for expansion into Southern Cali-fornia. Shea Commercial’s developmentbusiness will be reorganized as a real es-tate investment trust (REIT) under thecontinued direction of Shea Commer-cial Founder and CEO Jim Riggs.Shea’s commercial brokerage operationwill affiliate with Prudential CRESCommercial Real Estate, and operate asan independently owned and operatedfranchisee trading as Prudential CRESCommercial Real Estate.

NAIOP Launches NorthernNevada Chapter

A group of commercial real estate pro-fessionals recently formed the North-ern Nevada Chapter of the National As-sociation of Industrial and OfficeProperties (NAIOP). “The impetus forestablishing the local chapter is two-fold: first, to promote sound growththroughout the northern region of thestate, and secondly, to ensure the con-tinuation of Nevada’s pro-business en-vironment,” stated new chapter Presi-dent Scott Beggs, director of portfoliomanagement at Reno-based DP Part-ners. The Northern Nevada Chapter has62 members. As a national organiza-tion, NAIOP has an extensive networkof 52 chapters that represent the inter-ests of developers and owners of indus-trial, office and related commercial realestate throughout North America.

1.5 Million Square Feet of Industrial Space Underway

Phase II of the 1.5 million-square-footBlue Diamond Business Center in LasVegas was recently completed. Withmore than 350,000 square feet of light in-dustrial space, it features tenants such asSara Lee Bakery, Outdoor Kitchen Con-cepts, Hardwood Specialty, AmericanShredding, Las Vegas Review-Journal,Peterman Lumber, U.S.A. Dawgs, Inc.,Ventura Metals, Desert Portable Storageand Level One Inspection Services.Phase III, scheduled to begin construc-tion in the first quarter of 2007, will becomposed of five buildings for a total of450,000 square feet. The 110-acre BlueDiamond Business Center is located westof I-15 at the intersection of WindmillLane and Valley View Boulevard.

Lear 429 Breaks GroundSacramento-based Panattoni Develop-ment Company has begun work on theLear 429 building in the Lear Industri-al Center. The 429,000-square-foot in-dustrial facility is the third building tobe constructed at the Lear IndustrialCenter, located in the Silver Lake areaof the Stead submarket in NorthernNevada. The Lear Industrial Center ismaster-planned for approximately 1.4million square feet of industrial prod-uct. Lear 429 is scheduled for comple-tion in June of 2007. The architect onthe project is Tectonics Design Group.

The Village at The CauldronBreaks Ground

Pacific Concepts has begun construc-tion on Phase I of its latest project insouthwest Las Vegas, The Village atThe Cauldron. The three-story plazawill be home to retail shops, restau-rants and loft-style offices. The Vil-lage at the Cauldron sits on 8.62 acres

B U I L D I N G N E V A D A B R I E F S

The Village at The Cauldron BreaksGround

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74 January 2007

city of Las Vegas. The new office willaccommodate more than 300 employ-ees. In addition to loan servicing,which is currently handled at the Hen-derson facility, the expansion will alsofocus on additional business services,including originations, dealer creditand wholesale operations. The expan-sion efforts will allow Ford MotorCredit to serve as the company’s pri-mary financial services hub to cus-tomers throughout the entire westernregion of the United States.

Ely School Develops Biomass Project

The David E. Norman ElementarySchool in Ely will receive the NevadaRenewable Energy and Energy Conser-vation Task Force’s 2006 public sectorRenewable Energy And ConservationHonors (REACH) Award for outstand-ing contributions to renewable energyand energy conservation in Nevada. Theschool’s biomass boiler project uses ap-proximately 150 tons of wood chips peryear to heat the school building. It waspart of a $3.4 million energy retrofit pro-ject completed by APS Energy Servicesand made possible through the Fuels forSchools program. The retrofit will gen-erate an annual savings of approximate-ly $460,000 for the White Pine CountySchool District. The biomass boiler isthe first Fuels for Schools project inNevada and will be used to host toursand educate students and visitors aboutalternative fuels and forestry health.

Bank Receives Permission to Organize

Service1st Bank of Nevada has re-ceived “Permission to Organize” bythe State of Nevada Financial Institu-tions Division. This step in the forma-tion process allows bank organizers toaccept stock subscriptions. Service1stexpects to raise initial capital of $50million, making it Nevada’s first“super-start-up bank.” The stock willbe sold through private placement tobetween 200 and 300 Nevada share-holders with a minimum subscriptionof $100,000. John Dedolph, Chairmanand Chief Executive Officer, was theformer CEO of Las Vegas based SunState Bank. Other officers involved inthe formation of Service1st include:Stuart Olson, President; PatricialOchal, Executive Vice President andChief Financial Officer; and DavidJones, Executive Vice President. Allthree individuals were formerly withNevada First Bank. The bank will openin January with one branch and a lend-ing center located in Las Vegas at Cen-tra Point, on the northeast corner ofDurango Boulevard and Sunset Road.

Northern Nevada Medical Center Expands

Northern Nevada Medical Center is ex-panding into the community of SpanishSprings in Sparks, with its NorthernNevada Diagnostic Center planned toopen in summer 2007. The center will belocated in a medical office building onthe southeast corner of Los Altos Park-way and Ion Drive just across from thenew Miguel Sepulveda ElementarySchool. The facility will be the first ofthree 20,000-square-foot physician-owned buildings planned for the 5.6-acresite. Northern Nevada Diagnostic Center

will offer outpatient diagnostics includ-ing X-rays, CT scans, MRIs, ultrasoundsand digital mammography. MoodyWeiske Contractors of Reno will beginconstruction on the first medical officebuilding in early January 2007.

New People Mover Planned for McCarran

The Surveying and Geomatics group atStantec’s Las Vegas office will assistBombardier in the construction of apeople mover that will eventually con-nect the D concourse at McCarran In-ternational Airport to the new T3 termi-nal via a 1,100-foot-long undergroundtunnel. For this project, Stantec will usea new three-dimensional laser scanningsystem, which company officials said isa much faster process than more con-ventional methods. The laser scan willproduce a three-dimensional map of thecore as-built tunnel, while also record-ing necessary data, capturing images at16 different points on the full 360-de-gree radius inside the tunnel at 2.5-footintervals. This new technology willallow the task to be completed in as lit-tle as three days, rather than the esti-mated six weeks it would take other-wise. Bombardier engineers will useStantec’s data when they pour concretefor the people mover’s running padsand install steel guidebeams and otherequipment.

Ford Motor Credit Expands Henderson Operation

Ford Motor Credit Company recentlyannounced it will expand its operationsin Henderson. The Henderson facility,which currently employs more than500 people, will occupy nearly 20,000square feet at an additional location insouthwest Henderson, bordering the

N E V A D A B R I E F S

Northern Nevada Diagnostic Center

January 2007 75

new services, including Recreation,Assistive Technology, Transition Con-nect and Early Intervention. These newprograms join with existing programs:Adult Day Services; Child Develop-ment Center; Family Respite; JobTraining and Employment; and Sup-ported Living. In 2007, ESSN will beexploring the need for adult daycareand in-home care services for seniors.

The newest program offered throughESSN focuses on early interventionwith children from birth to 3 years old.This program offers a family-centeredapproach to working with childrenwho have special needs. With this newservice, ESSN hopes to increase ser-vices to children and their families intheir natural home environment.

Patchett, who joined the SouthernNevada branch as CEO and presidentin 2004, has been helping Easter Sealsserve families of people with disabili-ties for more than 10 years, Patchett isalso a member of the community ofpeople with disabilities – he becamevisually impaired at the age of seven.Despite his disability, he continued todevelop his athletic and academic abil-ities throughout his childhood and con-tinues these passions to this day.

Golf Tournament and Fashion Show Planned

ESSN has teamed with the StevenJackson Foundation for a golf tourna-ment fundraiser and high-end fashionshow on Feb. 20, 2007. The golf tour-nament will be held at Arroyo GolfClub at Red Rock, while the fashionshow will be hosted by a top-rated

night club on the Las Vegas Strip. Theshow will feature athletes from the Na-tional Football League and modelsfrom SecretsInc.

Along with these community events,Jackson and additional members of theNFL will be hosting a youth mini-foot-ball camp on Feb. 19. The camp,which welcomes all children under theage of 14, will be held at the UNLVpractice fields. Participants will notonly have a day of fun, but will also re-ceive a T-shirt and have autograph op-portunities with the athletes.

Additional NFL athletes scheduledto attend are St. Louis Rams quarter-back Marc Bulger and wide receiverTorry Holt. Easter Seals also welcomesCarolina Panthers linebacker AdamSeward, Tennessee Titans wide receiv-er Drew Bennett and San DiegoChargers wide receiver and UNLVHall of Famer Keenan McCardell.

Jackson is currently one of theNFL’s top-10 running backs, rushingfor more than 900 yards this season.Jackson, a local graduate of El DoradoHigh School, is well known in LasVegas for his community involvementand work with local charities.

aster Seals Southern Neva-da (ESSN) CEO and Pres-ident Brian Patchett mightbe one of the youngest

leaders of the internationally recog-nized non-profit organization, but hehas big plans on impacting the LasVegas community.

Easter Seals provides services na-tionwide to more than 1 million chil-dren, adults and their family membersannually. The organization has beenhelping individuals for more than 80years. From child development centersto physical rehabilitation and job train-ing for people with disabilities, EasterSeals offers a variety of services tohelp the disabled address life’s chal-lenges and achieve personal goals.

Although Easter Seals has beenserving the Southern Nevada commu-nity for more than 25 years, it has near-ly doubled in size over the last twoyears. Before then, people who re-quired disability services often lackedthe necessary assistance, but Patchettsaid his vision is to “provide servicesto people with disabilities so they canlive, work and play independentlywithout being institutionalized.”

Patchett has transformed the organi-zation, overhauling the budget, addingprograms, and adding to the staff. Hehas helped the Southern Nevada loca-tion grow to more than 110 employees.

ESSN now offers nine programs,compared to only five when Patchetttook the helm of the organization’sSouthern Nevada chapter. Within thepast two years the staff has welcomed

by Michelle Danks

Easter Seals of Southern Nevada

6200 W. Oakey Blvd.

Las Vegas, NV 89146

702-870-7050

Eastersealssn.org

E

Easter Seals Southern NevadaHelping Nevadans with Disabilities

C O M P A S S I O N A T E C A P I T A L I S M

76 January 2007

FACE TO FACE

President and CEO

HSI (High Sierra Industries)

Reno

Type of businessNorthern Nevada’s largest provider ofservices to people with intellectual andphysical disabilities

Biggest business challengeJuggling the dual missions of HSI: provid-ing employment, job training and residentialsupports to people with disabilities, whilealso providing excellent light manufacturingand labor-intensive services on a contractbasis to local businesses.

If you could start over and choose a different profession, what would it be? My current position is a varied, exciting,sometimes frustrating, and in the end, al-ways rewarding job. I didn’t begin my ca-reer here. Rather, this organization and Ifound each other after I spent many years inthe manufacturing industry and having runmy own consulting company. So, the onlyother “career” I might have chosen is tohave been a mom.

How do you spend your time when you’renot working? Does Rotary or the Hispanic Chamber ofNorthern Nevada and the Latino Empow-erment Advancement and Developmentprogram count as work? If so, then Imake an effort to run a minimum of threeto four miles, three times a week. Sun-days are spent with my family.

Little-known fact about yourself: I was a figure skater for nine years, until Iwas 14 years old. I was a great jumper,but a horrible spinner.

Does managing a non-profit require differ-ent skills than managing a for-profit com-pany?Having had a career in both arenas, Iwould say that leading a non-profit orga-nization demands much more of me onevery level than I believed possible. Onany given day, I could be working on is-

Years in Nevada: 12

Years with Firm: 6

LaVonne N. Brooks

President

Crisci Custom Builders

Las Vegas

Type of businessLas Vegas-based general contracting firmthat specializes in institutional, industrial,professional and retail construction.

Biggest Business Challenge: Finding quality people to staff my compa-ny. When they’re out in the field, theyrepresent the company. When they makea mistake, it not only reflects poorly onthem, but on Crisci Custom Builders aswell. On the same note, when they dowell, Crisci Custom Builders is reflectedpositively through their actions.

What do you like best about your job? I love being able to see somebody’s dreamcome alive. When a client describes whathe or she wants, an architect sketches it onpaper and we’re able to build it, it’s amaz-ing. To think that what we build could bestanding for years – that’s another amazingpart of my job.

How do you spend your time when you’renot working? Boating, reading and practicing martialarts

What would you like your legacy to be? I would like to be remembered as a manwhose actions were true to his word andabove-board, who carried through withhis promises and practiced honesty allaround.

With building material costs rising, what areyou doing to help keep your costs down?While we cannot regulate the costs ofbuilding materials, we have found onetruly efficient way of keeping costs downfor everyone involved. The key is ensuringthat the project is finished on time accord-ing to schedule. By using the best subcon-tractors and managing constructionprogress so developments are completedon time. Owners see the overall savingswhen we keep our word.

Years in Nevada: 22

Years with Firm: 16

Joseph Crisci

January 2007 77

Most political experts seem to agreethat ballot measures asking the public ifthey want to pay more in taxes or fees tofund a needy project – such as puttingmore police officers on the streets orbuilding new roads – are a good way touse the process.

Those initiatives or referendums thatseem to circumvent the spirit and intentof electing leaders, such as legalizingmarijuana or outlawing smoking inpublic places, might need more publicdiscourse and debate before automati-cally appearing on our ballots.

Big corporations and industries suchas gaming, mining and construction arevery wary of the initiative process. Howappealing would it be to voters if theycould vote to immediately raise gamingtaxes or ban all mining in Nevada?While these may not pass automatical-ly, it would take strong efforts by the in-dustries being attacked to explain whythese questions could be extremelydetrimental to our state’s economy.

Mike Sullivan is president of KnightConsulting, a Las Vegas government af-fairs firm.

Current Secretary of State DeanHeller, who oversees the electionprocess in Nevada, has tried to put forthlegislation that would tighten restric-tions for initiative petitions and referen-dums. Incoming Secretary of State RossMiller has plans to do the same.

One of Miller’s proposals, likely topass in 2007, is banning questions thatqualify for the ballot but are rejected bythe voters. Supporters of that measurewould have to wait two or more electioncycles before they could bring a reject-ed proposal back in front of voters.Under this law, those backing the legal-ization of marijuana would have to waituntil the 2014 election cycle before theycould qualify their initiative again.

There is a fine line, however, betweenbeing too cumbersome and allowingpeople unfettered access to Nevada’sballots. Advocates for tighter restric-tions point out that people elect repre-sentatives to pass laws and put pro-grams in place for the public benefit.Initiative supporters believe their way ismost honest and accurate when it comesto finding out what people want, since itis truly the will of the people.

oes government of thepeople, by the people andfor the people include theright of the public to cir-

cumvent the legislative process, andpass legislation and constitutionalamendments by themselves?

This question will undoubtedly beasked several times as the 2007 Legisla-ture gets ready to convene for its 74thsession this coming February.

Nevada has some of the most re-laxed initiative and referendum lawsof any state in the country. It is the rea-son you have seen questions to legal-ize marijuana on nearly every ballotfor the past several years. Because ofthe Silver State’s small populationbase, those wishing to change ourConstitution or institute new laws can,without much cost, collect signaturesand gain access to the ballot.

It takes a certain number of signa-tures from those who voted in the lastgeneral election to force a question orreferendum onto the ballot. Collectingthese signatures has been slightly chal-lenging in the past due to difficultieswith getting signatures in Nevada’sless-populated rural counties. However,those restrictions have been challengedin federal court and may be thrown out.

Large political action committeeswith unlimited budgets can hire sig-nature gatherers, and collect theneeded signatures in far less timethan it would take in a more popu-lous state. When an issue actuallymakes it onto the ballot, politicalcommittees have a national presenceto push their particular measure.

Constitutional ChangesThe Voice of the People?

I N S I D E P O L I T I C S

D

POSITION AVAILABLEMarketing VP for risk management firm in Las Vegas.Requires degree and relevant experience.Send resume to:Capstone Brokerage Inc.2675 S. Jones Blvd., Ste 102 Las Vegas, NV 89146 or Fax to 702-932-7730

78 January 2007

text message, simply put,is a maximum of 160characters of text you cansend back and forth.

While cell phone-hugging, text-crazyteenagers are the most visible text-messaging force out there, businesspeople are starting to use text mes-sages to send and receive informationwith trusted senders and recipients.Yes, texting (SMS technology) hastranscended the teen market andmoved into big business.

Business owners are sitting downwith consultants to map out mobilestrategies, just like they did severalyears ago with Internet strategies.

Business owners, be aware: Youwon’t be able to broadcast mass SMSmessages without getting people toopt in – you can’t blanket entire citieswith a coupon. In this medium, mar-keting needs to drill down a lot furtherto be effective. A mobile customer re-lationship marketing (MCRM) sys-tem is required as a tool to communi-cate to “moving target” customers.

For the business owner, textingmakes business sense for internal andexternal communications as a controlmechanism. Early adopters includednightclubs and the entertainment in-dustry, which used texting to commu-nicate highly-targeted messages toend users. These days, constructionfirms may ask crews to use text mes-sages to report locations and jobprogress to a central database. A

restaurant may take down a cus-tomer’s cell number and text the cus-tomer when a table becomes available;a pharmacy may do the same when aprescription is ready. It’s all about sav-ing time. My father, who owns a log-ging company in South America, usestexting to collect weigh-station infor-mation from his team members. Thisway, he doesn’t have to buy everyonean expensive laptop.

The financial industry has pickedup on this technology as a way tocommunicate investment informationto clients more quickly. The dialogueis far more intimate in business-to-business applications than business-to-consumer, yet tremendous oppor-tunities are available for the retail sideas well, utilizing customer needs toenter into a continuous mobile dia-logue. In some cases, with high-valueinformation, customers are willing topay for text messages, so the technol-

ogy can actually become a revenuestream. We are seeing this in the realestate world, where it’s important tobe first. We are also seeing companiespush live video to cell phones.

For the business owner looking toexplore this technology, the first stepis to find out what percentage of yourcustomer and supplier base uses cellphones. Nationally, 85 percent of allpeople over age 18 and under age 55have a cell phone. Look into whetheryou want to use mobile to receive,gather or send out information. (Mul-timedia and video messaging are alsohuge right now.)

Even if your business does not planto use SMS messaging for marketingor communications, you should en-sure that your website is easily acces-sible from a cell phone. Companiesare developing special WAP (wirelessapplication protocol) sites that run oncell phones, and some casinos areconverting websites to WAP sites.

SMS messages sent this year show a71 percent increase in monthly volume,compared to last year. Any cell phonepurchased within the last three years iscapable of receiving a text message. It’stoo powerful a force for progressivebusiness owners to ignore.

Dietmar Petutschnig is CEO of AGNunet, Inc.’s U.S. operations, whichare based in Las Vegas, and a partnerin the global organization, which hasoffices in Germany and Dubai.

A

Text MessagingWhat Business Owners Need to Know

T E C H P A G E

“For the business

owner, texting makes

business sense for

internal and external

communications.”

January 2007 79

defaulted loan, he or she must offerthe borrower the opportunity to enterinto a repayment plan by a writtenagreement no later than 15 days afterthe date of default.

The loan agreement or promissorynote must also include the followingterms as established through the fed-eral Truth in Lending Act:• Annual Percentage Rate (APR):The cost of credit as a yearly rate.These rates are typically high be-cause “payday” loans are usuallysmall and for very short terms. TheState of Nevada has not establisheda cap on these rates.• Finance Charge: The dollar amountthe credit will cost, or the actual costof the interest paid for receiving theloan. • Amount Financed: This is typicallythe amount of cash the borrower re-ceives from the lender.• Total of payments: The total amountpaid after making all scheduled pay-ments.

Before doing business with anylender or other financial institution,log on to www.fid.state.nv.us, andclick on the “Licensees as of …” linkto ensure you are doing business witha licensed entity.

Steven Kondrup is acting commis-sioner of the State of Nevada Finan-cial Institutions Division.

Limitations are set on loan ex-tensions. If the borrower wishes toextend the initial term of the pay-day loan, the extension cannot ex-ceed 60 days beyond the initialloan expiration.

The right to rescind the loan isavailable to the borrower. Thelender must allow the borrower torescind the loan on or before theclose of business on the next day ofbusiness at the location where theloan was initiated. For instance, if aborrower took out a loan on Thurs-day morning, the borrower has untilclose of business on Friday to re-tract the loan. The borrower mustreturn the sum of money equal tothe face value of the loan and pro-vide copies of certain documents tothe borrower as proof of the voidedtransaction.

The borrower has the right to pay aloan in full or in part at any time with-out any additional charge or fee be-fore the date the final payment or ex-tension is due.

Terms must be presented in the lan-guage in which the transaction wasconducted. Before making a loan, thelender must provide the customerwith a written agreement of the loan’sterms. For example, if the transactionwas conducted in Spanish, terms mustalso be in Spanish.

Before a lender attempts to com-mence legal action to collect on a

heck cashing and deferreddeposit service compa-nies, colloquially knownas “payday lenders,” are a

necessity to certain borrowers whomay be labeled sub-prime, thoughconsumers from a broad spectrum ofincome and asset levels use paydayloan services.

Payday loans are meant to assistconsumers experiencing temporarycash flow problems or financial emer-gencies, but are not meant to be reliedupon as regular income.

With the passage of Assembly Bill384, new tougher regulations inNevada Revised Statutes 604Acurbed many of the former abusesand made it more difficult for un-scrupulous lenders to take advantageof consumers. Some of the changeshelp protect consumers from thedebt treadmill by capping borrow-ers’ loan amounts, the cumulativetotal of multiple loans and the num-ber of extensions.

The Nevada Financial InstitutionsDivision is responsible for the regula-tory enforcement of the new law. Fol-lowing are some highlights:

Limitations are set on loan amounts.Payday loans may not exceed 25 percentof the borrower’s expected gross monthlyincome. The cumulative loan amounts ofmultiple loans to a single borrower alsomay not exceed 25 percent of the borrow-er’s expected gross monthly income.

Payday Loan RegulationsProtecting Nevada Borrowers

S P E A K I N G F O R N E V A D A

C

“How does the Financial Institutions Division regulate payday lendersand protect consumers?”

Steven Kondrup

80 January 2007

and planning into their approach orthey could end up failing miserably.It’s far more than hanging a shinglethat says: “Se Habla Español.”

Achieving success with the His-panic market certainly involves tak-ing demographics into considera-tion. But equally as important, is theattention given to psychographicsand cultural nuances. This involvesthe following important tenets:

Ascertain your target audience’slevel of acculturation. Before start-ing on any initiative targeting His-panics, it is critical to determineyour target audience’s level of accul-turation. Acculturation refers to thestage or level that an individual hasachieved in adjusting to the host cul-ture. Characteristics that typicallydefine levels of acculturation in-clude: length of time in a new coun-try; level of fluency in that country’slanguage; education; degree of com-fort in dealing socially with mem-bers of the new country; etc. Severalstates have a large concentration ofHispanics who have a high level ofacculturation, like California, Flori-da and Texas, whereas the majorityof Hispanics in Nevada have a verylow level of acculturation. This is at-tributed to the fact that the majorityof Hispanics in Nevada have only re-cently arrived.

Create unique marketing ap-proaches and messages. When de-veloping marketing strategies and

tactics, it’s not safe to assume that awinning formula for the non-His-panic market will be a winning for-mula for Hispanics. One of the mostimportant things to recognize whenbuilding a customer relationshipwithin this market is that the groupof prospects is not merely a Spanish-speaking version of the U.S. market.Their language is different and soare their cultural perspectives, expe-riences and goals. A marketing mes-sage that resonates with the non-Hispanic market may make no senseto your Hispanic target audience.This means you need to do morethan translate. Messages must “con-nect” with the Hispanic consumer inorder to appeal to the audience. Andto get it right, word choice, tone andgraphic design will likely need to besignificantly different. Also, givecareful consideration to your mediamix. It will likely need to vary aswell, because the Hispanic marketresponds to media differently thanthe general market.

Assume the need to educate andinform about your product or ser-vice. If your target audience has alow level of acculturation, such asthe majority of Hispanics in Neva-da, it is very possible they have lim-ited or no experience with the prod-uct or service you are offering.Don’t make the mistake of assumingthey have used your product before.Do some research first. If there is

s businesses are aware,there is power in num-bers, and nowhere is thatmore apparent than in the

U.S. Hispanic market. In fact, withone in five residents being Hispanic,Nevada is one of the nation’s fastest-growing Hispanic markets. In ClarkCounty, one of every four residentsis Hispanic. And in terms of buyingpower, the numbers speak for them-selves. At $10 billion in 2005, Neva-da ranked fifth in the nation.

The news is good for Nevada busi-nesses wanting to expand their ap-peal to the Hispanic population. It’san excellent market to target, yetbusinesses need to put some thought

by Michelle Danks

A

Se Habla EspañolWinning Hispanic Customers in Nevada

E X P E R T A D V I C E

SUBSCRIBE NOW

IT’S EASY

Go to:www.NBJ.com

Nevada Business Journal

January 2007 81

Investment WisdomAn anonymous Chinese proverb reads:

A great fortune depends upon luck; a small one on diligence.

That’s where Vista Financial Resources comes in. We earn good, solid

double-digit returns for our investors by careful and diligent underwriting.

Every effort is made to select borrowers carefully and evaluate projects

through the prism of lessons learned over decades in the real estate

development world.

We can’t turn you into a millionaire overnight, but we can help you keep

and grow what you’ve got. Please come and meet us. Find out what makes

us worth knowing.

For additional information call us at (702) 614-5400.

Vista Financial Resources LLC is a Nevada Licensed Mortgage Brokerage Firm.

Money invested through a mortgage broker is not guaranteed to earn any interest

or return and is not insured. Prior to investing, investors must be provided

applicable disclosure documents.

Michael Crisp

Jerry Trenberth

Michael A. Saltman

limited familiarity with your prod-uct, take an educational approach inyour advertising and marketing ma-terials. Explain and inform. Yourchances of creating customer goodwill and winning their business willbe much greater.

Deliver a welcoming attitude. Tobuild a relationship with the Hispan-ic market, it’s important that promis-es conveyed in advertising materialsare delivered in the customer experi-ence. This is done with Spanishspeaking customer service associ-ates, Hispanic sales representativesand marketing materials presented inSpanish. It’s vital to have people onstaff who can communicate effec-tively with customers in Spanish.This means having employees withtrue fluency in the language and anunderstanding of the culture. Inother words, those who can converseat a level well beyond high schoolSpanish. Ideally, it’s best to havemore than a Spanish-speaking, non-Hispanic employee and instead em-ploy Hispanic representatives whocan relate to your Hispanic cus-tomers on all levels. By doing so,you are reinforcing the fact youvalue Hispanic business at everytouch point.

The keys to creating effective His-panic customer relationships are re-ally no different than successfullymarketing to other segments of thepopulation. You need to acknowl-edge their uniqueness, respect thedifferences, communicate in a waythat resonates on several levels andembrace their business with a wel-coming attitude. You enhance yourchance of success by planning on thefront end, and by putting a few keytools and approaches in place.

Chrysanthe Georges Sawyer is pres-ident of Georges Marketing, a LasVegas-based marketing consultingfirm specializing in direct marketingand marketing to Hispanics.

http://www.washoecounty.us

82 January 2007

4. Make your goals specific, precise,clearly defined. Just like your vision,write out your goals in complete, vividdetail. Instead of writing “a newhome,” describe the home you desire:“a 7,500-square-foot contemporarywith 5 bedrooms, 3 baths, an officewith a separate entrance, and a view ofthe mountains on 20 acres of land.”Giving the subconscious mind a de-tailed set of instructions is crucial togoal achievement.

5. Include a timeline. Timelines arevital to goal achievement. By when,exactly, must this goal be achieved?“This year,” “soon,” “in a littlewhile,” or “later” doesn’t cut it. Picka date. If it’s not on the calendar, it’snot going to happen. You must beable to measure exactly where youstand now against where you want tobe in the future.

6. Make sure your goals are bigenough. I’m sure you’ve heard the oldsaying, “Shoot for the moon. If youmiss, you’ll still reach the stars.” Goalsshould inspire you to move forward,perhaps with a little bit of a knot inyour stomach. If your goals are tooeasy, you won’t be as motivated toachieve them. If they’re too hard, youmight become overwhelmed and noteven take the first, necessary steps.

Take action right away to reinforceto your subconscious mind you are se-rious about achieving your vision.

Honorée Corpron is a Las Vegas-based author and personal coach.

hat is standing in the wayof achieving your goals?To achieve your goals, youmust first create a vision.

Then, identify categories within yourvision, such as: employees, money, ex-ercise, family and personal time, per-sonal development and other thingsyou want to acquire. Use the followingguidelines to create and achieve yourgoals – and the life you truly desire:

1. Write down your goals. This is themost important aspect of goal-setting.Writing down your goals creates theroadmap to your success. You maychoose to revise a goal as circumstancesand other goals change. Changing agoal isn’t failure. Consider it a victorybecause you had the insight to realizethe goal you set wasn’t perfect and youhad the courage to make a change.

2. Your goals should be based solelyon your vision. Write your goals inpositive language. Your subconsciousmind is a very efficient, powerful tool– its only function is to carry out in-structions. The more positive instruc-tions you give it, the more positive re-sults you will get, and the faster youwill get them.

3. Make your goals congruent witheach other. In other words, one goalmust not contradict any of your othergoals. Example: A goal to buy a$750,000 home is incongruent with anincome goal of $50,000 per year. Thisis called non-integrated thinking andwill sabotage all of the hard work youput into your goals.

by Michelle Danks

W

Commandments for Goal-SettingMake Goals Vivid and Visible

E X P E R T A D V I C E

IT’S EASY

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84 January 2007

investor/clients and $150,000 fromeach of three investor clients to makeup the total of $900,000.

Before lending, the mortgage com-pany evaluates the loan to make surethe collateral is worth significantlymore than the amount loaned (to givethe investors an “equity cushion”against default), assembles the in-vestor group and handles the paper-work. Monthly, as the borrower makeshis payment, the mortgage companycollects the money and divides itamong the various investors accordingto the percentage they invested.

What rates of return should in-vestors expect from trust deeds? Itdepends on several factors, includingthe quality and desirability of thecollateral, the loan-to-value ratio andthe reputation, track record and fi-nancial net worth of the borrower. Italso depends upon whether the trustdeed is in the first or second position.At present, in Las Vegas, “firsts” typ-ically command roughly 12 percentto 14 percent per annum and “sec-onds” roughly from 14 percent to 18percent and up.

Some people shy away from invest-ing in trust deeds as sounding “toogood to be true.” With the prime ratehovering around 8 percent, they won-der why anyone would agree to pay upto 18 percent to borrow money unlessthe person or company were a disas-trous credit risk. Why wouldn’t thesepeople borrow the money at muchlower rates from their bank?

First, mortgage companies are lessregulated than banks. They make deci-sions and fund loans more quickly.Second, mortgage companies frequent-ly will lend more than a bank would ona given piece of property. Third, bankscan be fickle, changing policiesovernight from being “real estatefriendly” or “raw land friendly” lendersto refusing to lend on such collateral.When this happens, quality borrowersare left out in the cold. Fourth, mostbanks have “one borrower limits” lim-iting the total amount a bank can lendto a single developer/borrower (includ-ing affiliates). Once these limits arereached, the borrower is forced else-where – such as to a mortgage compa-ny – to get the money needed.

In short, many solid borrowersseek financing from mortgage com-panies. Moreover, notwithstanding avery few highly-publicized bad ap-ples, many reputable mortgage com-panies quietly generate returns fortheir investor/clients.

All mortgage companies must be li-censed by the State of Nevada Mort-gage Lending Division (MLD). Talk toseveral companies (and several in-vestors, if possible), then check withthe MLD at (702) 486-0780 or (775)684-7060 – and with your attorney andaccountant – before investing.

Jerry Trenberth is a principal withVista Financial Resources, LLC, a li-censed mortgage brokerage firmbased in Las Vegas.

ick up a copy of Money orSmart Money magazine,and you’ll find articlesabout all manner of po-

tential investments. Stocks, bonds,REITs, tax-free municipal bonds,real estate – even baseball cards andCabbage Patch dolls. But you’llprobably never find an article ontrust deeds, even though these invest-ments have been quietly yieldingmany savvy Nevadans double-digitannualized returns for decades.

A trust deed (aka mortgage) ismuch like the mortgage on yourhouse; however, as an investor, youare the lender who receives monthlypayments, rather than the borrowerwho makes them. Typically, borrow-ers are real estate developers or landbankers borrowing to purchase, de-velop or hold property. Also typically,because most mortgage loans are toolarge for one investor to fund individ-ually, loans are made through mort-gage companies which, in turn, sellfractionalized interests to investors.

For example, a borrower may havea real estate project worth $1.5 mil-lion. He wants to borrow $900,000against it. The mortgage companyendeavors to verify that the propertyreally is worth $1.5 million – usuallyby getting an appraisal from a li-censed appraiser. The mortgagecompany then agrees to lend the bor-rower $900,000 (a 60 percent loan-to-value ratio); it might then obtain$90,000 from each of five

Trust Deed InvestmentsOverlooked, Underappreciated

M O N E Y M A N A G E M E N T

P

creas are the only organ transplants tobe performed in Southern Nevada,and only at Sunrise Hospital MedicalCenter and University Medical Cen-ter. Additionally, there is a need to in-crease organ donations,” addedRichardson. “The donor shortage is apublic health crisis nationwide.” In2005, although more than 100,000people were candidates for trans-plants, only about 28,000 organ trans-plants were performed. Nearly 18people died each day in 2005 becauseno organs were available.Anatomical Donation Leads toMedical Advances

Even among those comfortablewith organ donation, discussing thesubject of whole-body donation canbe an awkward conversation. Yet, itwould be a safe bet to say that everytransplant surgeon practiced his or herfirst surgical transplant on a cadaver,and with each technological advance,physicians practice new procedureson cadavers before performingsurgery on a live patient.

“The public’s understanding and ac-ceptance of whole-body donation is anessential step in the ongoing educationalprocess of physicians. It is through thegenerosity of individuals who donatetheir bodies to science for medical edu-cation that in-depth study of the humanbody can be conducted. Because ofwhole-body donation, countless individ-uals enjoy a better quality of life,” saidDr. Michael J. Crovetti, founder of theHenderson-based Medical Education &Research Institute of Nevada (MERIN).

A non-profit organization, MERINis a venue where surgeons learn newsurgical procedures and test new sur-gical instruments and techniques.Through cooperative efforts with thepublic and private sectors, andthrough its public education pro-grams such as Generations: AnAnatomical Donation Program,MERIN is a leader in helping tobring advances that ultimately mayresult in improved healthcare deliv-ery, less invasive operations, im-proved surgical outcomes, shorterpatient recovery time and fewer post-surgical infections.

“In creating the MERIN Genera-tions program, it’s become clear thateven people who are organ donorshave limited knowledge of, or a com-fort level with, whole-body donation.We are working to educate Nevadansabout the importance of whole-bodydonation,” said Crovetti.

In Southern Nevada, anatomical do-nations can be made to MERIN. InNorthern Nevada, donations can bemade to the UNR School of Medi-cine. According to Richardson andCrovetti, an individual can choose tobe both an organ donor and a whole-body donor.

The Nevada Donor Network can be reached at 702-796-8222 orwww.nvdonor.org. MERIN can bereached at 702-933-5627 or www.mer-inv.org.

Liz Gamble is a freelance writerbased in Southern Nevada.

ore than 100,000 peopleacross the U.S. needorgan transplants. InNevada, 217 people are

waiting for kidney or kidney/pancreastransplants, the only type of trans-plant surgery performed in this state. Organ Shortage

Not long ago, the topic of organ do-nation was a quiet whisper. Backthen, debate took the form of ethicalquestioning: should we be transplant-ing organs? Today, the discussion re-volves around the severe organ short-age and philosophical concerns, suchas fairness in awarding organs tothose most in need.

In Nevada, the Nevada Donor Net-work (NDN), and its executive direc-tor, Ken Richardson, lead the publicdialogue on organ donation. Throughtheir efforts, Nevada citizens, whoformerly knew little about organ do-nation, are now automatically askedto be donors when applying for dri-ver licenses at the Department ofMotor Vehicles.

NDN is one of the few organ pro-curement agencies in the country tomanage the recovery of organs, tis-sues and eyes in the same facility,making Nevada progressive in thefield of organ and tissue procurement.In addition, the NDN also testsdonors and recipients for tissue-typ-ing before organ transplantation.

Yet, according to Richardson, thestate has a long way to go. “Nevadaneeds a multi-organ transplant center.Right now kidney and kidney/pan-

by Michelle Danks

M

Organ and Anatomical DonationTwo Organizations Educate the Public

V I T A L S I G N S

January 2007 85

86 January 2007

e’ve been looking for aslowdown in the high-flying Nevada economy –and the most recent data

show a more measured pace of activi-ty. To be sure, housing activity, as re-flected in monthly permitting, is downmarkedly in both Las Vegas and Reno(down 40 percent and 61 percent, re-spectively, for residences).

A slowdown in housing has somebenefits, however, helping other con-struction sectors find needed workers.Still, amid much discussion about “bub-bles” and “economic recessions,” thingsare adjusting without catastrophic ef-fects. Sectors exclusive of housing showcontinuous prosperity. Most importantly,overall activity remains upbeat.

Evidence of more moderate rates ofchange in the Silver State may be found ina number of indicators. For taxable sales,up 3.5 percent above the same level ayear ago, it is now less than the sum of thegrowth in population and prices. Indeed,most of Nevada’s growth indicators pointto modest rates of change.

Though some have speculated thatwe may have already made substantialheadway in addressing housing-mar-ket imbalances, it is highly likely thatfurther adjustments will occur in LasVegas and Reno. How long these ad-justments will act as a drag on growthdepends on evolving conditions, butmost economists believe that slowergrowth is ahead for 2007.

Nationally, housing starts also showa double-digit slowdown, suggestingslower overall growth ahead. Currently,third-quarter 2006 GDP is now grow-ing at an annual seasonally-adjustedrate of 2.9 percent. Again, dependingon evolving conditions, we might ex-pect future GDP growth to continue ator below the current level.

R. Keith Schwer

UNLV 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. Depart-ment 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

10/06

10/06

09/06

09/06

09/06

08/06

08/06

10/06

10/06

09/06

09/06

10/06

10/06

09/06

08/06

08/06

10/06

10/06

09/06

09/06

10/06

10/06

09/06

08/06

08/06

10/06

10/06

10/06

10/06

3q06

3q06

10/06

10/06

10/06

3q06

10/06

08/06

10/06

10/06

10/06

1,315.2 1,308.7 1,259.6 0.5 4.4

4.0 4.0 3.6 0.0 11.1

4.269 4.182 4.126 2.1 3.5

984.97 1,063.33 1,011.89 -7.4 -2.7

4.235 4.565 4.156 -7.2 1.9

103.65 103.02 104.18 0.6 -0.5

4.337 4.455 4.292 -2.7 1.0

940.0 934.0 897.3 0.6 4.8

4.0 4.0 3.7 0.0 8.1

3.068 3.021 2.966 1.6 3.5

807.85 886.02 835.29 -8.8 -3.3

1,465 1,496 2,440 -2.1 -40.0

84 102 126 -17.6 -33.3

3.831 4.107 3.709 -6.7 3.3

70.22 69.73 72.00 0.7 -2.5

3.657 3.756 3.586 -2.6 2.0

231.4 230.7 222.8 0.3 3.9

3.6 3.7 3.3 -2.7 9.1

0.664 0.627 0.650 6.1 2.3

98.54 96.55 99.05 2.1 -0.5

191 269 490 -29.0 -61.0

50 96 37 -47.9 35.1

0.399 0.453 0.433 -11.8 -7.7

16.59 16.28 17.30 1.9 -4.1

0.474 0.487 0.502 -2.8 -5.6

135.844 135.752 133.877 0.1 1.5

4.4 4.6 4.9 -4.3 -10.2

201.8 202.9 199.2 -0.5 1.3

207.8 207.2 202.3 0.3 2.7

102.5 101.7 99.4 0.8 3.1

138.6 138.6 136.6 0.0 1.5

363.673 364.482 347.443 -0.2 4.7

16.11 16.58 14.79 -2.8 8.9

1.486 1.740 2.046 -14.6 -27.4

11,432.9 11,388.1 11,115.1 0.4 2.9

108.390 108.070 111.700 0.3 -3.0

-64.300 -68.958 -64.968 -6.8 -1.0

1,377.94 1,335.85 1,207.01 3.2 14.2

5.46 5.30 3.51 3.0 55.6

-0.32 -0.21 0.67 52.4 -147.8

Still Growing

No Change

Modest Change

Down

Modest Change, Year Ago

Modest Change

Modest Change

Still Growing

Good

Modest Change

Down

Down Sharply, Year Ago


Modest Change

Modest Change

Modest Change

Still Growing

Good

Modest Change, Year Ago

Down



Down

Slight Change

Slight Change

Slight Change

Good

Energy Price Drop

Concern

Concern

Slowing

Slight Change

Down Recently

Down

Slowing

Slight Change

Down

Up

Up

Inverted Yield

B U S I N E S S I N D I C A T O R S

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Coverage is not available in all areas. Limited-time offer. Other conditions and restrictions apply. See contract and rate plan brochure for details. Subscriber must live and have a mailing address within Cingular’s owned network coverage area. Up to $36 activation fee applies. Equipment price and availability may vary by market and may not be available from independent retailers. Early Termination Fee: None if cancelled in the first 30 days; thereafter $175. Some agents impose additional fees. Rebate Debit Card: BlackBerry Pearl price before mail-in rebate card is $349.99. Allow 10–12 weeks for rebate card. Rebate card not available at all locations. Must be customer for 30 consecutive days. Must be postmarked by 1/30/07. Sales tax calculated based on price of unactivated equipment. Unlimited Voice Services: Unlimited voice services are provided solely for live dialog between two individuals. Offnet Usage: If your minutes of use (including unlimited services) on other carriers’ networks (“offnet usage”) during any two consecutive month exceeds your offnet usage allowance, Cingular may at its option terminate your service, deny your continued use of other carriers’ coverage, or change your plan to one imposing usage charges for offnet usage. Your offnet usage allowance is equal to the lesser of 750 minutes or 40% of the Anytime Minutes included with your plan. The BlackBerry and RIM families of related marks, images, and symbols are the exclusive properties of and trademarks or registered trademarks of Research In Motion Limited – used by permission. RIM and Research In Motion are registered in the U.S. Patent and Trademark Office and may be pending or registered in other countries. ©2007 Cingular Wireless. All rights reserved.

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Krys T. Bart, Head of the Reno-Tahoe Airport …...5495 S. Rainbow Blvd., Ste 202 • Las Vegas, NV...

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