Northern Nevada Expanding Its Roots as Logistics Hotspot

Fueled by some of the best business incentives and living conditions in the US, companies in e-commerce, retail, new energy and high tech are centralizing operations and distribution locations in Northern Nevada…

For many years, the Reno-Sparks area has been distribution hub for the Western United States. Its proximity to California and the Western US, and business-friendly tax structure make it a natural for businesses looking to domicile their west coast logistics operations – providing access to rapidly growing consumer markets in excess of 75 million people.

“The Reno-Sparks area is special when it comes to logistics and distribution,” said Mike Kazmierski, CEO of EDAWN (The Economic Development Authority of Western Nevada). “We are essentially the center of the West from a distribution and e-commerce perspective, with not only a superb business climate but a wonderful place to live as well,” he said.

In addition to its inherent logistical advantages, other factors have created a perfect storm for Nevada to surge ahead as a logistics and economic development hotspot.

The Dramatic Shift in Consumer Expectations over the past 5-10 years has put the onus on the supply chain to be the final differentiator in the marketplace. E-comm and omni-channel requirements are forcing manufacturers and retailers to rethink their logistics capabilities to enable cost-effective, instant delivery – moving toward next day/same day in some cases. This mentality (I want it now or I’ll go somewhere else) is forcing distribution networks to become more decentralized, and alliances with transportation and 3PL partners to become more strategic. The shift in consumer expectations is forcing innovation in the supply chain. “The past 3 years has seen a real shift in e-comm companies looking at Northern Nevada,” says Russ Romine, VP of Transportation for LEGACY Supply Chain Services. “The value proposition for 3PL order fulfillment has shifted from cost center to a strategic enabler of sales and business growth.”

The Rapid Growth of Emerging Industries has presented opportunity for states to innovate the ways in which they attract entrepreneurial new businesses in sectors such as new energy, e-commerce, data storage and high tech. While companies in these new industries seek advantages from a business and tax incentive standpoint, they also typically place high value on culture, education and other quality of life factors for their people.

To keep up with these shifts, Nevada has adapted to become an economic development innovator – attracting and retaining businesses with financial and quality of life advantages.

So Why Are Companies Choosing Northern Nevada?

1. Financial & Tax Advantages of Nevada Among the Best in the US

For new companies looking to locate in Nevada, as well as long-time business residents of the state, Nevada offers a very advantageous tax structure. In fact, a 2015 Tax Foundation Index has Nevada ranked as the #3 most business friendly tax climate in the country. Some of the many attractive elements of the area’s tax structure include no corporate income tax, no personal income tax, and no franchise tax.

The area offers many additional business incentives including: sales and use tax abatement, abatements for intellectual property development, even real property tax abatement for recycling. Nevada also provides strong incentives for capital investments and “green” building.

2. Nevada is a National West Coast Logistics & Distribution Hub

The aforementioned strategic location of Nevada is essential to companies looking to reduce landed costs and meet level of service requirements into their Western US markets. The old saying location, location, location holds true: Northern Nevada enables 1 day transit to major markets including LA, San Diego, Seattle, Portland and San Francisco, as well as 1-2 day ground transportation capability into all 11 western states – something no other area can lay claim to.

Leveraging the proximity to the west – a vast array of local, regional and national carriers provide intra-and inter-state service across all modes, from parcel to intermodal to priority air cargo. Foreign Trade Zone #126, one of the largest FTZ’s in the country is located in Northern Nevada. The zone includes Alternative Site Framework (ASF), allowing importers and manufacturers additional flexibility, quicker ramp up time, and lower costs when leveraging a foreign trade zone into their supply chain.

3. In Addition to Logistics Infrastructure, Nevada is Well-Equipped for Business in the 21st Century

The abundance of natural and renewable clean energy resources, geographic location, and stable climate makes the region home to some of the largest data center campuses in the world. The “Super Loop”, a high-capacity, low-latency fiber optic network connects Reno and Las Vegas to Los Angeles, San Francisco, and Silicon Valley – making Nevada the most connected state in the country.

Nevada is well-equipped commercially – with the highest square footage of industrial real estate per capita in the United States – comprised of over 70 million square feet of mostly Class A-rated space. Distribution space lease rates in the area stack up quite favorably to other regions, especially as compared with California:

4. An Innovative Business Climate for Growing Companies

True economic development synergy exists between state, regional and local business development entities, and Nevada’s educational system – allowing for innovation in job creation and workforce training. Tech companies in the region have inserted custom curriculum within the state’s university system to develop workforce-ready pipelines of talent, while the state incents businesses based on job
development and training. Nevada also offers strong tax incentives for companies invested in bringing new jobs to the state.

Additionally, Nevada ranked #8 in a 2014 study of Best States for Doing Business by Chief Executive Magazine. Reasons cited include high scores in taxation and regulations, workforce quality and living environment.

5. Speaking of Climate – Nevada Offers Unbeatable Quality of Life (& Great Weather too)

Northern Nevada, specifically the Reno-Sparks-Tahoe area, is located at the base of the Sierra Mountains, providing access to world-class skiing, hiking, golfing, and water sports in less than one hour’s drive. With an emerging arts scene, 24-hour entertainment and over 300 days of sunshine annually – the area has something for everyone.

The area has a strong educational system, featuring the University of Nevada – a National Tier 1 University according to US News & World Reports. Northern Nevada also offers a competitive overall cost of living and strong housing market. Overall- Reno NV came in at #10 in Livability.com’s Ranking of 100 Best Places to Live.

Northern Nevada has become an innovator in economic development and entrepreneurialism, logistics and supply chain infrastructure, and overall quality of life. The region is and always has been a hotspot for west coast distribution, today it stands of the brink of becoming one of the most vibrant economic hotspots in the country. Learn more about the business advantages of Northern Nevada.