Before the pandemic shut down everyday life, Joe Kiele made a living in the industry that dominates Nevada’s economy. He waited tables at a steakhouse in a casino in Reno.
Four years later, Mr. Kiele, 49, remains in Reno, but now he spends his workdays in a factory. Instead of worrying about whether a customer’s ribeye is done, he trains people on how to properly handle industrial chemicals.
His employer, Redwood Materials, is building a huge complex in a lonely stretch of desert. There, the company started recycling batteries from discarded smartphones and other electronic devices. It extracts critical minerals such as nickel, lithium, copper and cobalt and uses them to make components for electric vehicle batteries.
It is no coincidence that the factory is only 13 kilometers away from a major customer – a Tesla car factory.
Mr. Kiele’s move from restaurant waiter to chemical operator comes with a shift that Nevada’s leaders have long advocated to make their economy more diverse and reduce reliance on hospitality jobs. In recent years, they have tried to attract investment from companies involved in the green energy transition.
The Redwood Materials plant, which covers about 300 acres and is expected to require about $2 billion in investment over the next decade, looms like a monument to Nevada’s ambitions. For employees, the factory is proof that in addition to issuing cards and delivering groceries, there are ways to pay bills.
“We are not based on consumerism,” Mr. Kiele said. “We’re dealing with industry.”
This isn’t the first time Nevada has tried to expand its economy. The state has historically bet its fate on the premiums of 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 prospered and fell in step with the value of the ore mined from the parched earth.
The legalization of gambling in 1931 – an attempt to overcome the Depression – spurred the construction of casinos. Conventional wisdom held that gambling was so irresistible that the business was virtually immune to economic downturns. However, this understanding was shattered during the Great Recession about 15 years ago. Then the pandemic made the mission to diversify even more urgent.
The most striking result of this campaign is the development of Las Vegas into a hub in the national e-commerce distribution system.
Nearly 14 million square feet of warehouse space is currently under construction in the Las Vegas area, with 40 million square feet planned over the next two to three years – an increase of nearly a quarter of existing capacity, said John Stater, research manager at Colliers, the investment firm for Commercial real estate.
“We’re building warehouse space at a pace I couldn’t have imagined,” he said.
The trend is driven by geography. Las Vegas is crossed by Interstate 15, which runs from Southern California north to Salt Lake City. Smaller highways connect Las Vegas with Interstate 10, which runs between Los Angeles and Phoenix. Around 39 million people live within half a day’s drive.
During the chaos of the pandemic, manufactured goods from Asia flooded the twin ports of Los Angeles and Long Beach. Warehouses in Southern California experienced malfunctions, a cause of delays in America’s delivery system for goods. This encouraged retailers to look for alternative storage locations for their goods.
Las Vegas attracted large buildable properties. Most of the new warehouses are being built on the outskirts of the metropolitan area, north of Las Vegas, in a brush-covered desert that stretches into treeless mountains.
There, Prologis, a San Francisco real estate investment trust, is building aggressively, recently purchasing 900 acres of undeveloped land.
Just a few years ago, Prologis executives were excited to build 200,000 square feet of warehouse space and rent it out to major brands. On a recent afternoon, bulldozers moved dirt inside 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 at Prologis.
Crocs, the footwear company, is preparing to open a distribution center in a new million-square-foot warehouse. About 400 first-time workers will begin processing orders there, with a starting salary of $18 an hour.
According to David Schmidt, chief economist for the Nevada Department of Employment, Training and Rehabilitation, more than 93,000 people work in transportation and warehousing in the state, an increase of one-fifth since before the pandemic. This compares to 364,000 jobs in the leisure and hospitality industry.
Some economists argue that warehouses are a dubious alternative to casino work because many people burn out after just a few years and pay tends to be lower. But the Nevada Governor’s Office of Economic Development, which promotes investment, argues that entry-level jobs can lead to supervisory positions that pay far better 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 focuses on emulating the entrepreneurial activities of people like Martin Schiller, the founder and CEO of a biotechnology company called Heligenics.
Dr. Schiller’s resume included teaching at Johns Hopkins University when he arrived 14 years ago to start a medical school at the University of Nevada, Las Vegas. In a lab there, he developed a method for fine-tuning existing drugs by bombarding them with tens of thousands of genetic mutations, thereby figuring out how cells develop resistance.
“We are drug hackers,” said Dr. Schiller.
On a recent afternoon, he and his team were evaluating data collected from a trial of various interferons to treat multiple sclerosis while focusing on the Food and Drug Administration’s approval of a new therapy.
At first, Las Vegas felt isolated, but then Dr. Schiller has some advantages. The university gave him time to develop his technology and start his company, free from the “publish or perish” culture that dominates 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 shadows of Las Vegas, but recently the city has flourished through reinvention. The Tahoe-Reno Industrial Center has become a showpiece, home to the Tesla factory and a Panasonic plant that makes batteries for electric vehicles.
Redwood Materials, founded by a Tesla co-founder, JB Straubel, began limited-scale production in late 2022. The company employs 661 people at its Nevada location, with the goal of creating 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 ran the Carson City Nugget, a casino south of Reno. Many of the new hires have experience in the leisure and hospitality industry. Her new work – making parts for electric vehicles – comes with a sense of mission.
“There’s a lot of security involved,” said Grace Uhart, 27, who began her career in the front office of the Venetian Resort in Las Vegas and now manages janitorial and food services at Redwood. “The business we were in needed to be figured out.”
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2024-02-05 10:02:03
www.nytimes.com
