Monday, February 26

How Nevada Is Pushing to Generate Jobs Beyond the Casinos

Before the pandemic brought everyday life to a halt, Joe Kiele supported himself through the industry that dominates Nevada’s economy. He waited tables at a steakhouse inside a casino in Reno.

Four years later, Mr. Kiele, 49, remains in Reno, yet he now spends his workday inside a factory. In place of worrying about the doneness of a customer’s rib-eye, he trains people on the proper handling of industrial chemicals.

His employer, Redwood Materials, is constructing an enormous complex across a lonely stretch of desert. There, the company has begun recycling batteries harvested from discarded smartphones and other electronics. It extracts critical minerals like nickel, lithium, copper and cobalt, and uses them to manufacture components for electric vehicle batteries.

Not coincidentally, the plant sits only eight miles from a major customer — a Tesla auto factory.

Mr. Kiele’s shift from restaurant server to chemical operator parallels a transformation long championed by Nevada’s leaders seeking to make their economy more diverse, reducing its reliance on the hospitality industry for jobs. In recent years, they have tried to secure investment from companies engaged in the transition toward green energy.

The Redwood Materials plant, which occupies roughly 300 acres and is expected to require some $2 billion in investment over the next decade, looms like a monument to Nevada’s aspirations. For the employees, the factory is evidence that there are ways to pay bills besides dealing cards and delivering food.

“We’re not based on consumerism,” Mr. Kiele said. “We’re dealing with industry.”

This is not the first time that Nevada has sought to broaden its economy. The state has a history of betting its fate on the bounty flowing from a single industry.

In the years after the Civil War, the newly formed state was concentrated on mining silver and gold. Over the unfolding decades, Nevada’s economy prospered and stumbled in line with the value of the ore extracted from its parched earth.

The legalization of gambling in 1931 — an effort to overcome the Depression — spurred the construction of casinos. Conventional wisdom had it that gambling was so irresistible that the business was effectively impervious to economic downturns. But that understanding came undone during the Great Recession about 15 years ago. Then the pandemic added urgency to the mission to diversify.

The most conspicuous result of that campaign is the emergence of Las Vegas as a hub in the national distribution system for e-commerce.

Nearly 14 million square feet of warehouse space is now being built in the Las Vegas metropolitan area, among 40 million square feet planned over the next two to three years — an increase of nearly one-fourth of the existing capacity, said John Stater, research manager at Colliers, the commercial real estate investment management firm.

“We are building warehouse space at a pace I couldn’t have imagined,” he said.

The trend is propelled by geography. Las Vegas is threaded by Interstate 15, which runs from Southern California north to Salt Lake City. Smaller highways link Las Vegas to Interstate 10, which runs between Los Angeles and Phoenix. Some 39 million people live within a half-day’s drive.

During the chaos of the pandemic, factory goods from Asia overwhelmed the twin ports of Los Angeles and Long Beach. Southern California’s warehouses seized with dysfunction — a cause of delays in the American delivery system for goods. That encouraged retailers to seek out alternative places to stash their wares.

Las Vegas beckoned with large developable lots. Most of the new warehouses are going up on the fringes of the metropolitan area, in North Las Vegas, on scrub-covered desert rolling out to treeless mountains.

There, Prologis, a San Francisco real estate investment trust, is aggressively building, while recently buying an undeveloped expanse of 900 acres.

Only a few years ago, Prologis executives were excited to put up warehouses stretching across 200,000 square feet, leasing them to major brands. On a recent afternoon, bulldozers moved earth at a soon-to-be-completed 680,000-square-foot warehouse for Moen, the maker of kitchen and bathroom fixtures.

“We’re very bullish on continued growth,” said Lisa Brady, a vice president at Prologis.

Crocs, the footwear company, is preparing to open a distribution center in a new warehouse running one million square feet. There, some 400 initial workers earning starting pay of $18 an hour will begin handling 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 at the Nevada Department of Employment, Training and Rehabilitation. That compares with 364,000 jobs in leisure and hospitality.

Some economists argue that warehouses are a dubious alternative to casino work, given that many people burn out after only a few years, while pay tends to be lower. But the Nevada Governor’s Office of Economic Development, which courts investment, argues that entry-level work can lead to supervisory positions that pay far more than typical jobs in leisure and hospitality.

“I see this as a springboard to the future,” said Bob Potts, the agency’s deputy director.

A longer-term goal focuses on replicating the entrepreneurial pursuits of people like Martin Schiller, founder and chief executive of a biotechnology venture called Heligenics.

Dr. Schiller’s résumé 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 pioneered a way to fine-tune existing drugs by bombarding them with tens of thousands of genetic mutations, gleaning how cells develop resistance.

“We’re drug hackers,” Dr. Schiller said.

On a recent afternoon, he and his team assessed data gleaned from a trial of a variety of interferon used to treat multiple sclerosis, as they moved toward seeking the Food and Drug Administration’s approval for a new therapy.

At first, Las Vegas felt isolated, but then Dr. Schiller came to appreciate some advantages. The university gave him time to develop his technique and launch his business, free of the publish-or-perish culture that rules much of academia. The city leased him space in a museum to establish his first lab. He constructed his current offices and laboratory with a shoestring budget of $4 million.

“In San Francisco, that would take $20 million,” he said.

Reno has long operated in the shadow of Las Vegas, but in recent times the city has prospered through reinvention. The Tahoe-Reno Industrial Center has become a showcase, anchored by the Tesla factory and a Panasonic plant that makes electric vehicle batteries.

Redwood Materials, which was started by a Tesla co-founder, J.B. Straubel, began producing at a limited scale in late 2022. The company employs 661 people at the Nevada site, with a target of 1,600 jobs by the end of the decade.

Redwood’s liaison with 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 leisure and hospitality. Their new work — creating parts for electric vehicles — comes with a sense of mission.

“There’s a lot of security in it,” said Grace Uhart, 27, who started her career in the front office of the Venetian resort in Las Vegas and now supervises janitorial and culinary services at Redwood. “The business that we’re in was going to need to be figured out.”