In May 2011, Mike Kazmierski resigned as president and CEO of the Colorado Springs Regional Economic Development Corporation.
Kazmierski, a blunt-talking former Army colonel, had been at odds with many of the EDC’s supporters and board members. The Great Recession hadn’t made it any easier to persuade businesses to move to Colorado Springs, and city policies didn’t help either — at least in Colonel Kaz’s opinion.
Substantial incentives to new businesses had never been part of the Colorado Springs package. Secure in the belief that the region’s many advantages – climate, workforce, cost of living, low utility rates, honest efficient and business-friendly local government – were incentive enough, the city declined to enter the fierce and expensive competition between cities for major new businesses.
Kazmierski made his opinion clear: The city and the EDC were essentially spinning their wheels. Absent incentives, we couldn’t compete.
So Kaz quit, and soon took a job in Reno running EDAWN, the Economic Development Authority of Western Nevada.
At the time, it seemed like a step backward. Moving to Reno, a fading gambling town that hit bottom in the recession? How could Kaz get businesses to move there? Reno had a low-skill workforce, an unemployment rate of 14.5 percent, and its principal industry had been in decline for years.
That didn’t faze him. Kazmierski saw a city a few miles from the California border, well-served by transportation links and without California’s high taxes and regulatory obstacles.
I talked to Kaz in 2013 and wrote about it in the Independent. Here’s an excerpt from the piece.
Kazmierski moved to Reno in November 2011 and took over the Economic Development Authority of Western Nevada (EDAWN), a challenge many would have avoided. Reno was the “Detroit of the West.” Unemployment stood at 14.5 percent, primary employers were fleeing or broke, the gaming economy was stagnant, and few businesses were interested in moving there.
“I was lucky,” Kazmierski said. “I came here when the community was at the bottom, and everyone had figured out that they had to work together. We’ve built a team that is committed to growing our economy by attracting, retaining and growing quality jobs.”
That sounds like typical eco-devo speak, but Kazmierski has delivered. Unemployment has fallen to 9 percent, and in the fiscal year ending July 1, EDAWN just announced it and its partners “assisted 33 companies to relocate or expand in the region, creating a projected 2,112 jobs.”
Given the Reno/Sparks population of about 420,000, that’s impressive. The details are significant: six corporate headquarters, 11 manufacturers, six logistics companies and 10 back-office/business-support companies.
How did Kaz pull it off in Nevada?
“Reno is a lot like Colorado Springs,” he says. “It’s a much better community than people realize. We have the mountains, we have Tahoe, and we’re only seven miles from California as the crow flies — but we’re not California. We’re on the road a lot, talking to manufacturers. We love manufacturers, and California, so we’re told, hates them.”
Site visits by companies are important, Kazmierski continues, “because of the companies that visit this region and make a decision to relocate, more than 80 percent choose Reno-Sparks.”
So what can we do to replicate Reno’s success? “As an economic developer I believe that quality jobs are the key to economic vitality,” Kazmierski writes in a follow-up email, “but it takes a village to be successful in job creation (attraction, retention/expansion and entrepreneurial startups). In my humble opinion, job creation must be a community priority and more important than ideological battles on taxes/incentives or personal/political agendas. Reno gets that — not sure C-Springs is there yet.”
“It takes a village” — there you go, Kaz, quoting Hillary Clinton! No wonder they had to get rid of you here…”
So no, it wasn’t a step down. In fact, it has turned into the biggest step up you could imagine. Kaz and EDAWN just won the Super Bowl of economic development.
At a news conference Thursday afternoon, it was announced that Tesla Motors would locate its “gigafactory” in Reno. The $5 billion facility will manufacture lithium-ion batteries for Tesla’s electric vehicles, and will employ 6,500 workers. Reno’s competitors included New Mexico, Arizona, California and Texas.
Announcing a package of tax breaks totaling about $1.25 billion over the next 20 years, Nevada Governor Brian Sandoval said that the deal “would change Nevada forever.”
The factory will be 20 times larger than any existing facility. Tesla CEO Elon Musk expects that economies of scale will enable the company to sell the acclaimed Tesla S sedan for around $35,000. The new batteries, as well as being much cheaper will offer greater range. That combination, the company believes, will enable Tesla to sell 500,000 vehicles annually by 2020.
Reno and Nevada have made a daring bet on an unknowable future. Would Colorado Springs and Colorado have made such a bet? I don’t think so – that kind of reckless, daring and imaginative leap into the future is no longer part of our culture.
We wouldn’t have invested in General Palmer’s risky railroad scheme. We wouldn’t have bought a lot in “Fountain Colony.” We wouldn’t have given Winfield Scott Stratton a grubstake to explore the goldfields of Cripple Creek. We wouldn’t have paid attention to Charley MacNeill’s copper mining scam – let Spec Penrose waste his money on such foolish speculations!
We don’t know whether the Colonel’s bet will pay off, but when Peyton Manning launches a deep pass down the sideline he doesn’t know whether the receiver will haul it in.
He does know that if he’s not in the game, he won’t score.