Nevada County Economic Development Plan— A Reality Check

I am please to hear that the Nevada County Economic Resource Council has an Economic Development Plan, at least according to an article in The Union. I have not had an opportunity to see the final product, which was approved by the ERC Board of Directors last week. I could not find the plan on the ERC Web page, the last update to the web site was January 2014.  So, let me comment on The Union article and I will see if I can get the plan posted to the web site for distribution.

 “Through a combination of initiatives and activities designed to encourage existing business growth that position the organization as the hub of economic development, the ERC will work to establish a positive operating environment for entrepreneurial start-ups and existing Nevada County businesses, and as a new location for businesses that possess shared alignment with Nevada County’s attributes.

“Simply put,” Gregory wrote, “the ERC goal is to grow the county’s economic pie.”

The problem with all past attempts to come up with an economic development plans was the turf wars among all the other organizations who viewed themselves as the “hub of economic growth”  in the community.  There is a telling quote in The Union article:

“When California Association for Local Economic Development’s President and CEO Gurbax Sahota asked the leaders during an October round table if all of Nevada County’s leaders and stakeholders were “solidly” behind the ERC, a chorus of “No” was echoed around the room at Grass Valley City Hall.”

“I am not totally convinced,” said Nevada County Supervisor Ed Scofield, who also sits on the ERC executive board. “If we were really the leaders, we would have the membership much stronger than it is.”

For even a targeted economic development plan to succeed, requires the whole community to buy into and supporting the plan, to put aside the turf wars and function as a unified community. The underlying issue has always been the community cannot come up with a common shared vision of what it wants the economic engines to be over the next 10 years”

  • The Greenies want sustainable agriculture and green manufacturing.
  • The Chambers, and to a large part the Board of Supervisors, want to increase tourism, thus the Go Nevada County Website. A web site that only now is becoming mobile device friendly, making it more usable by smartphone users,  the primary information device for travelers.
  • Some insightful people think that Nevada County could be come the “Brentwood of the Foothills” attracting retired folks and their wealth, but that would require building the infrastructures and shopping that wealthy people want.  But, there has been little understanding or enthusiasm for this approach by economic leaders.
  • Those wedded to the past want to bring back manufacturing, but the manufacturing world has moved offshore where labor cost are lower. Plus,  California has erected multiple regulatory barriers to new business development, thus the probability of expanding manufacturing in Nevada County is almost nil.

As you can see, there are multiple turfs challenges that make coming up with a successful economic development plan extremely difficult.  Without a total community buy in, the success of the ERC plan is at risk.

“The plan also proposes to convince growth-oriented businesses to move their companies to Nevada County. The final initiative aims to find 10 businesses outside Nevada County and have them vie each year for a prize — a combination of cash and services if they relocate to Nevada County.”

Reality Check!  Companies are morning out of California and the cost of energy and environmental regulations are raising the cost of business in the state to uncompetitive levels.  If a company is looking to expand they are expanding outside of California.  Nevada County would be competing with states like Texas that have more cash and more services than Nevada County could ever come up with.

On the other hand, the new ERC Executive Director John Gregory seem to understand the challenges:

But there are hurdles in the path to pulling off that plan, as Gregory outlined a lack of pervasive high-speed Internet service, an underdeveloped skilled and technical work force, lack of available land, lack of spousal employment opportunities and an underdevelopment of entrepreneurial programs as potential pitfalls.

We could solve some of those problems if our schools would focus more on math, science, business administration and entrepreneurship.  Our schools do not even teach the basics, like the use of spreadsheets or computer programing. They spend to much student  time on soft subjects that have no relationship to employment, such diversity, cultural studies and climate change. The implement of Common Core in the schools is not going to solve the problem.  In fact, it will make it worse, by focusing on the evils of commerce and the bastardization of science in the support of anthropogenic global warming.

Fiber optic broadband, the gold standard of internet communications, is still 2-3 years away, but Western Nevada County business parks have access to wireless broadband today. The bigger challenge is universal broadband in all neighborhoods in the community. Those with cable have broadband access, those with DSL are underserved and in many cases the only options in some neighborhoods are dial-up and satellite access.  These options are not conducive to economic expanding development.

Infrastructure for land development is a government responsibility, which has lagged or failed outright. There have been numerous commercial land surveys conducted and the need is known. However, when ever a developer steps forward the environmentalist in the community challenge the projects, demanding more and more studies until the developer runs out of money, or stamina, and leaves. When a developer leaves, the wackos celebrate another victory dancing around the mulberry bush beating their drums and economic development suffers. The ERC is not equipped to overcome this opposition. There will be no more land for business development until we have a generational change in the community, which brings about a cultural change. By then the ERC will be footnote in the economic history of the community.

A ERC plan has little value until it is executed and, the probability that the ERC can execute this plan is slim to none. The turf wars have killed all the past plans and will most like do in this one.

Stay tuned, this is going to an interesting year, with an election on the horizon, and a struggling local economy. it is sure to be an election issue, especially with the big box stores opening up on the southern border of the County this summer.  And, you thought $200 million in leakage was huge, you have not seen anything yet.

I am looking forward to reading the detailed plan. It many modify some of my views, but having been a party to all the past planning and failed execution, I think my insight maybe relevant.

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About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
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7 Responses to Nevada County Economic Development Plan— A Reality Check

  1. Michael Anderson says:

    Russ wrote: “Fiber optic broadband, the gold standard of internet communications, is still 2-3 years away, but Western Nevada County business parks have access to wireless broadband today.”

    You realize, of course, that there is only one reason that the Spiral fiber project is being held up, and that is because Smarter Broadband challenged the project. The CPUC won’t fund the Spiral project right now because of this challenge. What are your thoughts on this?

    Michael A.

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    • Russ Steele says:

      Michael

      Sorry for the delay in replying to your post and question. I have been in Cobo San Lucas for a week.

      In my view the CPUC is being short sited in their decision, though I do understand the CPUC issues.

      Wireless Broadband using current technology is only an interim solution to people needs for high speed Internet. Over the next 3-5 years the current technology is fine, after that the technology has to change or WISPs will not meet the demand for higher speed Internet. The FCC is continuing to bump up the minimum standard, which is 10Mbps, to 100Mbps for schools.

      Given that the technology does not change, consumers are going to demand fiber quality and speeds. Since it is going to take 3-5 years for local fiber to come on line, I would like to see the CPUC fund Spiral as the long term solution.

      However, the legislation that authorized the funding is quite clear, no over lap is allowed. This was a provision put in the legislation by the big telcos. They did not want public money funding their competitive down fall. Unfortunately SmarterBroadband and The Spiral Proposal have some overlaps, and those overlaps grow as SmarterBroadband build out their ARRA funded coverage plan. AT&T recently opened some fiber to business in areas that Spiral wanted to serve. They also may be challenging the Spiral proposal.

      In summary, I personally support the Spiral long term solution, while also supporting the SmarterBroadband’s interim solution that is available now, not 3-5 years down the road. People need connections now.

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  2. Todd Juvinall says:

    I was never a ERC fan because without General Plan and zoning realities encouraging business nothing will happen. I am proved out correct. I think it is a rearrangement of the Titanics deck chairs. I wish I was wrong.

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  3. Great summary Russ, and I look forward to its sequel as the real ERC plan is revealed. From the Union and your report, I see nothing different being put forth that has not already circled the barn many times before. The solution, as implied in your post, is for the various county governmental jurisdictions to step back and let the entrepreneurs devise their own means for creating products and services in Nevada County. For years the county has offered nothing but impediments to economic development, impediments that drove away all but the most determined (and well funded). We must always keep in mind that collectivists of any stripe provide the most meager environment for any kind of economic development (save black markets) on God’s green earth.

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    • One thing, I’d like to see the County do is to re-invest the entire TOT tax (a.k.a. bed tax, tourism tax) back into business/tourism development. Historically, the County keeps half of this for general fund purposes. It’s a small amount to begin with (I seem to recall it was $250,000 total in 2010.) I’m told that the Town of Truckee does not retain any of the TOT tax…it all goes back into promoting Truckee for tourism, commerce, etc.

      Our County has so much going for it, yet judging by business closures and my conversations with business leaders, it appears our economic vitality is slowly withering away. If this is not turned around soon, the decline will accelerate.

      I’ve attended a half dozen or so ERC meetings. They’ve been very interesting and informative, but it’s not clear they’ve had much impact on our economy over the past twelve months. In fairness, the ERC has been somewhat saddled with administering that GoNevadaCounty.com website/contract. The amount of overhead admin for that project was fairly high for a small staff and a small budget. I’m not sure enough time remained to pursue other economic promotion efforts.

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  4. Russ Steele says:

    This is kind of cultural change I was thinking about, the eventual extinction of the Greenies:

    “This April 22, Earth Day turns 44. The green movement is not aging well. . . . it has a diversity problem and speaks primarily to a narrow, graying demographic slice of the United States.”

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  5. RL Crabb says:

    You pretty much nailed it, Russ. The one industry you didn’t mention that that may affect our fortunes is the coming marijuana plantation boom, once it is legalized. Even so, Nevada County won’t be the only place growing weed. It’s going to be a very competitive business.

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