RENO GAZETTE-JOURNAL

Sparks gets Top 10-ranking in high-tech manufacturing Up-and-coming small markets survey

Sparks was named one of the most attractive up- and-coming small market cities for operating a high-tech manufacturing facility, according to a national study.

But high energy costs are chipping away some of the area’s cost advantages against other markets, the study found.

Sparks’ $25.7 million total annual operating cost for a typical 250,000-square-foot facility with 300 employees gave it the 10th best ranking among 45 areas surveyed by The Boyd Company, Inc.

The New Jersey-based company is a national corporate site selection firm that counts such companies as PepsiCo, Pratt & Whitney and JPMorgan Chase among its list of clients.

Mesquite in Southern Nevada, also made the list at No. 4 with an operating cost of $24.6 million.

Topping the survey was Quincy, Wash., which posted an annual operating cost of about $21.1 million. Costs factored into the numbers include labor, energy, tax and corporate travel.

Inclusion among the Top 15 bodes well for an area’s mind share among companies, said John Boyd Jr., a principal with The Boyd Company.

“The top cities in this study are cities in the radar screen today,” Boyd said. “When our clients ask us to look at potential areas for them, these usually are the cities that they ask us to look at.”

Good business climate

Boyd cited a “very, very favorable business climate” as a key advantage for Sparks. Besides Nevada being a right-to-work state, Sparks’ total annual labor cost of nearly $17.2 million for a facility with 300 employees is among the lowest in the West. Other positives include Sparks’ proximity to California, along with Nevada’s lack of personal, corporate and state income taxes.

Although Reno was not included in the study, the costs for Sparks can be applied to the greater Reno- Sparks area, Boyd said. Just the fact that Sparks placed high in the report can help Washoe County gain recognition among companies, said Chuck Alvey, president and CEO of the Economic Development Authority of Western Nevada.

“You still have a lot of companies out there that have no idea where Sparks or Reno is,” Alvey said. “So this kind of study is phenomenal when you’re trying to get the story out that this is a good place to do business, especially when you’re trying to enhance our strong tourism image with a strong business image.”

Challenges remain

Despite Sparks placing high in the study, the area still has its share of challenges. At the top are access to dependable and affordable supplies of water and energy, with Sparks’ sporting the highest power costs among the top small markets in the report.

The annual electric power cost for running a typical 250,000-square-foot facility with 300 employees in Sparks, for example, is about $3.8 million. In contrast, the total power cost in Quincy, Wash., which has access to cheap hydropower, is $1 million.

“Today, industrial selection comes down to energy, energy, energy,” Boyd said. “That’s the main driver guiding manufacturing today. They want cheap reliable power and, hopefully, clean energy as well.”