How Nevada is working to generate jobs beyond casinos
Before the pandemic shut down daily life, Joe Kiele supported himself through the industry that dominates Nevada’s economy. I waited tables at a steakhouse in a casino in Reno.
Four years later, Mr. Kiele, 49, remains in Reno, but now spends his workday in a factory. Instead of worrying about cooking a customer’s rib-eye steaks, he trains people on the proper handling of industrial chemicals.
His employer, Redwood Materials, is building a massive complex in a remote desert expanse. There, the company began recycling batteries collected from discarded smartphones and other electronic devices. It mines critical minerals like nickel, lithium, copper and cobalt, and uses them to make components for electric vehicle batteries.
It’s no coincidence that the factory is just eight miles from a major customer – a Tesla car factory.
Mr. Kiele’s move from restaurant server to chemical operator parallels a transformation long championed by Nevada leaders seeking to make their economy more diversified, reducing its reliance on the hospitality sector for jobs. In recent years, they have attempted to secure investment from companies committed to the transition to green energy.
The Redwood Materials plant, which occupies about 300 acres and is expected to require some $2 billion in investment over the next decade, stands as a monument to Nevada’s aspirations. For employees, the plant is proof that there are other ways to pay their bills besides handing out cards and delivering food.
“We are not based on consumerism,” Mr. Kiele said. “We’re dealing with industry.”
This isn’t the first time Nevada has sought to expand its economy. The state has always bet its fate on the wealth coming from a single industry.
In the years following the Civil War, the newly formed state focused on silver and gold mining. Over the decades, Nevada’s economy boomed and busted depending on the value of the ore extracted from its patched lands.
The legalization of gambling in 1931 – an effort to overcome the Great Depression – spurred casino construction. Conventional wisdom held that the game was so irresistible that the company was effectively impervious to economic downturns. But that understanding collapsed during the Great Recession about 15 years ago. Then the pandemic made the mission of diversification even more urgent.
The most striking result of this campaign is the emergence of Las Vegas as the hub of the nation’s e-commerce distribution system.
Nearly 14 million square feet of warehouse space is currently under construction in the Las Vegas metro area, among 40 million square feet planned over the next two to three years, an increase of nearly “a quarter of the existing capacity,” said researcher John Stater. director at Colliers, the commercial real estate investment management company.
“We’re building warehouses at a rate I couldn’t have imagined,” he said.
The trend is propelled by geography. Las Vegas is connected by Interstate 15, which runs from Southern California north to Salt Lake City. Smaller highways connect Las Vegas to Interstate 10, which connects Los Angeles to Phoenix. Some 39 million people live within a half-day’s drive.
During the chaos of the pandemic, industrial goods from Asia overwhelmed the twin ports of Los Angeles and Long Beach. Warehouses in Southern California experienced malfunctions, causing delays in the U.S. goods delivery system. This encouraged retailers to look for other places to hide their merchandise.
Las Vegas attracted attention with large developable lots. Most of the new warehouses are being built on the outskirts of the metro area, north of Las Vegas, in a scrub-covered desert stretching up to treeless mountains.
There, Prologis, a San Francisco real estate investment firm, is building aggressively, while recently purchasing an undeveloped 900-acre expansion.
Only a few years ago, Prologis executives were enthusiastic about building warehouses spanning 200,000 square feet, leasing them to major brands. On a recent afternoon, bulldozers moved dirt into a soon-to-be-completed 680,000-square-foot warehouse for Moen, the maker of kitchen and bathroom fixtures.
“We are very optimistic about continued growth,” said Lisa Brady, vice president of Prologis.
Crocs, the shoe company, is preparing to open a distribution center in a new million-square-foot warehouse. There, the first 400 or so workers earning a starting wage of $18 an hour will begin processing orders.
More than 93,000 people work in transportation and warehousing in the state, an increase of one-fifth since before the pandemic, according to data analyzed by David Schmidt, chief economist for the Department of Employment, the Nevada Training and Rehabilitation. This compares to 364,000 jobs in leisure and hospitality.
Some economists say warehouses are a questionable alternative to working in casinos, given that many people burn out after just a few years, while wages tend to be lower. But the Nevada Governor’s Office of Economic Development, which courts investment, says an entry-level job can lead to supervisory positions that pay far more than typical leisure and hospitality jobs.
“I see this as a stepping stone to the future,” said Bob Potts, the agency’s deputy director.
A longer-term goal is to replicate the entrepreneurial activities of people like Martin Schiller, founder and chief executive of a biotechnology company called Heligenics.
Dr. Schiller’s resume included a teaching stint at Johns Hopkins when he arrived 14 years ago to start a medical institute at the University of Nevada, Las Vegas. In a lab there, he found a way to refine existing drugs by bombarding them with tens of thousands of genetic mutations, gleaning how cells develop resistance.
“We are drug pirates,” Dr. Schiller said.
On a recent afternoon, he and his team evaluated data gleaned from a trial of a variety of interferons used to treat multiple sclerosis, as they moved toward seeking approval of the Food and Drug Administration for a new treatment.
At first, Las Vegas felt isolated, but Dr. Schiller later came to appreciate certain advantages. University gave him time to develop his technique and launch his business, freed from the “publish or perish” culture that governs much of academia. The city rented him space in a museum to set up his first laboratory. He built his current offices and laboratory on a shoestring budget of $4 million.
“In San Francisco, it would cost $20 million,” he said.
Reno has long operated in the shadow of Las Vegas, but in recent times the city has thrived on its reinvention. The Tahoe-Reno industrial center has become a showcase, anchored by the Tesla factory and a Panasonic factory that manufactures batteries for electric vehicles.
Redwood Materials, created by Tesla co-founder JB Straubel, began limited-scale production in late 2022. The company employs 661 people at the Nevada site, with a goal of 1,600 jobs by the end of the decade .
Redwood’s liaison to state and local government is Don Tatro, a former state senator whose grandfather managed the Carson City Nugget, a casino south of Reno. Most new recruits have experience in leisure and hospitality. Their new job – creating parts for electric vehicles – comes with a sense of mission.
“There’s a lot of security in there,” said Grace Uhart, 27, who began her career working the front desk at the Venetian resort in Las Vegas and now oversees Redwood’s concierge and culinary services. “We had to understand the business in which we work.”