Monthly Archives: June 2016

Recession done; better days ahead

“I am tired of talking about the recession! The recession is over, and Las Vegas is moving forward.”

That was the message delivered by Jeremy Aguero, principal of Applied Analysis, during the 2016 Las Vegas Perspective presentation June 16.

Aguero, an economic analyst, posed a series of “What if” scenarios, asking what Southern Nevada would look like if it attained certain levels in education, employment, and other economic indicators. The questions were mostly rhetorical; he posted slide after slide showing that Southern Nevada had already met or exceeded his proposed benchmarks.

In the past year, Las Vegas ranked fifth among metropolitan areas in the nation for population growth.

Clark County has recaptured nearly all of the jobs that were lost during the recession. The state employs 936,100 people, just 700 fewer than were employed in May of 2007. The area has achieved that employment growth with 50,100 fewer construction workers.

“At the height of the construction boom, we were building homes for the construction workers that were building them,” Aguero said.

Taxable retail spending is at its highest level ever at $38.8 billion. Average hourly earnings are up 15.9 percent since January 2007 at $22.43, ranking Nevada as the having the nation’s fourth-highest hourly wage.

The number of business in Clark County grew by more than 2,000 in 2015 for to 53,468.

Besides the record number of visitors, increased visitor spending and convention revenues, Aguero also described educational achievements.

In the past year, the Clark County School District has had three National Merit Scholarship winners and been named as a College Board AP District of the Year. Vanderburg Elementary ranked in the top 50 best public elementary schools in the nation while Palo Verde High School was named an International Baccalaureate World School and both Bonner and Dooley Elementary were named National Blue Ribbon Schools.

Meanwhile, a panel discussion with Bo Bernhard, executive director, UNLV’s International Gaming Institute; Marcus Prater, executive director, Association of Gaming Equipment Manufacturers; and Christopher Oh, vice president of strategic operations for MGM Resorts International, highlighted how the gaming industry has changed and continues to change.

“Twenty years ago, more than 60 percent of the profits came from gaming,” Oh said. “In 2015, almost 65 percent of the Las Vegas resort industry’s revenue came from nongaming activities such as hotel room rates, nightclubs, pools, and dining. By its self, the Hakkasan nightclub at the MGM Grand generated over $100 million in 2015.”

Besides the hotel-casinos, many other businesses support the gaming industry, including gaming equipment manufacturers. Prater said Southern Nevada’s gaming suppliers and manufacturers have annual sales revenue of around $7 billion and employ about 16,500 people who earn about $1 billion annually.

Oh predicts that the casino floor will look different in 20 years, partly because of millennials.

Bernhard said millennials dislike the current slot machine options. To remedy that, skill-based gaming could be developed with variable payback winnings based on the player’s skill level.

The newest trend in gaming is e-sports, in which an audience watches two people play video games. Competitions are held across the country with prize money ranging from $10,000 to $7 million. Analysts estimate that there is a global audience of 100 million fans watching teams of players compete for the top dollars.

Gaming manufacturers and hotel-casinos want to take advantage of this trend and add skill-based gaming to the casino floors.

This was the 36th year for the Las Vegas Perspective presentation. It was started by the Nevada Development Authority, which rebranded as the Las Vegas Global Economic Alliance.

The 208-page book of statistics about every public and nonprofit agency, major employers, housing, and other economic drivers in the Southern Nevada region is available online at https://www.lvgea.org/sponsor-the-perspective/, for $50.


Top grantmaker shares his wisdom

By Craig A. Ruark

Special to the Las Vegas Business Press

Edmund J Cain 2016 small

Edmond J. Cain, vice president of grant programs for the Conrad N. Hilton Foundation speaks to members of the Nevada Corporate Giving Council about meeting philanthropic goals (Craig A. Ruark/special to the Las Vegas Business Press

“Love one another, for that, is the whole law; so our fellow men deserve to be loved and encouraged—never to be abandoned to wander alone in poverty and darkness.” Conrad N. Hilton (1887-1979)

During the June 10th lunch meeting of the Nevada Corporate Giving Council, some of the Las Vegas Valley’s most notable philanthropists and administrators of corporate philanthropic organizations were treated to a rare opportunity to listen to and ask questions of Edmund J. Cain, vice president of grant programs for the Conrad N. Hilton Foundation, and one of the leading authorities on corporate giving.

During his talk, Cain, who is also the vice chair of the Southern California Grantmakers’ Board of Directors, pointed out that philanthropic donations amounted to $258 billion in America last year. But despite the fact that there are over 100,000 recognized foundations in the U.S., 72 percent of that money came from individuals.

“That money, if used smartly, can make a real difference in what we are trying to achieve,” said Cain.

The Conrad N. Hilton Foundation was established in 1944 and since its inception has awarded more than $1 billion in grants. Today, the foundation assets are approximately $2.5 billion mostly due to the fact that Conrad Hilton he donated all of his wealth to the foundation in his final will.

While Conrad Hilton had made a lot of money, it was Barron Hilton that significantly increased the corporate wealth when, in 1971, he bought the famous International and Flamingo Hotels from Kirk Kerkorian, bringing gaming into the company holdings. For the next two decades, those two properties alone generated half of the revenue for the Hilton Corporation.

Like his father before him, Barron Hilton has pledged to the Foundation, upon his death, virtually all of the proceeds in excess of $4 billion that he received in 2008 from the sale of Hilton Hotels Corporation and Harrah’s Entertainment.

Currently, the Foundation ranks as number 30 among the largest charity organizations. With the addition of Barron Hilton’s financial pledge, the Foundation is likely to move into a position somewhere around 15.

The Hilton Foundation has gone through three eras’ which have evolved to define how corporate philanthropic decisions are made. The first was the “Conrad Era” where he would write a check to charities that stuck a cord in his heart. There was not any process for qualifying needs or abilities of those organizations to spend the money wisely.

The second era, headed by Don Hubbs, brought the organization into the era of major granting. Holmes established a process for identifying a few first class organizations and contributing to their cause.

The current “Strategic Era” is the third phase where the organization moved away from being reactive and simply identifying organizations, to hiring a professional staff and identifying issues that are aligned with the corporate values. These values are rooted in the life interests and vision of Conrad N. Hilton, “Assuring that the foundation pursues approaches that touch a diversity of people, places and needs by developing long-term projects and partnerships.”

“We invest in six strategic initiatives that involve funding multiple partners, generating new knowledge, and collaborating with other funders,” said Cain

In 2015, the Foundation gave out $107.8 million in grants to Catholic Sisters, children affected by HIV and Aids, foster youth, homelessness, substance use prevention, safe water, avoidable blindness, Multiple Sclerosis, disaster relief and recovery, Catholic education, and hospitality

In the first quarter of 2016, the Foundation has already given $18.5 million.

Prior to entering the world or philanthropic giving, Cain had a long career with the United Nations serving in Malaysia, Myanmar, Afghanistan, Turkey, and Egypt. He was also the first director of the U.N. Emergency Response Division. Cain also served as a senior member of The Carter Center’s Peace Program team, advising President Carter on global development issues.

The mission of the Nevada Corporate Giving Council is to connect philanthropy leaders from across industries to share news and best practices, discuss trends, and gain a deeper understanding of the community’s needs. The organization meets quarterly and information about participation can be found at www.moonridgegroup.com.


Henderson couple reinvents biomedical search engine technology

Jeff Saffer and Vicki Burnett became entrepreneurs out of necessity.

The spouses, who hold doctorates and are biomedical researchers, hit a wall in being able to search for the scientific literature they needed.

So they worked to get it.

“The ability to find authoritative documents is very important,” Saffer said. “When searching the answer for an illness, you do not want to end up at John Doe’s blog and find out that his grandmother got better when she wore a green dress.”

The pair was struggling to understand the flood of information their work was generating. Out of frustration, the couple developed a rudimentary algorithm for a search engine to narrow their search results to more credible sources.

What started as a programming tool for their own research blossomed into a useful search engine for other research groups, too.

In 2008, the couple formed Quertle, an analytics company. (Quertle is a made-up word formed by combining “query” and “article”). Their initial free site became popular and was used in 192 countries worldwide. They hired programmers to help perfect their search engine, and the knowledge they gained over the next seven years led them to launch a new subscription-based program in 2015.

That program is Quetzal, named for a turquoise-and-red tropical bird that the Aztec and Mayan people regarded as the “bringer of wisdom to mankind.”

“However, just being able to search information does not bring wisdom because it is filled with misinformation and can be difficult to comprehend,” Burnett said.

“The way we do things with our artificial intelligence and quantum logic methodology is that we not only find the right document, but we make it intelligible for people to understand what is there and what ties those particular results to their query,” Saffer said. “That is where we are trying to provide the wisdom and not just a list of results.”

The Quetzal search engine uses information from defined sources; it is a licensee of the National Library of Medicine and has access to information from all the biomedical articles published through it, as well as Toxline, PubMed, Biomedical News, U.S. Patents, and the Agency for Healthcare Research and Quality.

When a query is made, Quetzal looks at the documents stored in the database via a computer code that uses artificial intelligence, pattern matching, quantum logic, computation linguistics, and computational statistics. Those methodologies combined let the computer understand what the authors are talking about, then map the user’s query against points the author is making in the document so that the person searching receives a display of highly applicable query results.

Besides searching out information, the Quetzal site lets researchers hold real-time online discussions with colleagues about documents they have found. Unlike regular online chat rooms, Quetzal lets users invite selected individuals into the conversation. That conversation is encrypted to prevent hackers from ‘listening in.”

“The biomedical industry is very competitive, and there are a lot of people out there, trying to get a corporate advantage over their competitors,” said Saffer. “We do our best not to let that happen,” Burnett said.

When the couple started their company in 2008, they were living in Boulder, Colorado. They moved to Henderson in 2010.

“People don’t realize that having an international airport that’s always open can be critical for a business; not like in Denver when it closes down in the winter for snowstorms,” Burnett said.

Saffer said, “Of course, the tax structure, which is perhaps the number one reason for our relocation, along with the environment, made Southern Nevada a very desirable place to live.”

Wanting to inspire more diversity and bring additional bioscience industry to Nevada, Saffer and Burnett joined Lucine Biotechnology President and CEO Chandler Marrs to found the Parallel Innovation Labs project. The trio began holding monthly meetings they called the SciTech Hookup and invited other independent researchers to join them over cocktails. That effort grew into an annual conference with more than 300 attendees and more than a dozen vendors.


State leaving $529 million on table

“For nearly 40 years, Nevada ranked at or near the bottom of all 50 states and most territories in getting back federal tax dollars that its residents and businesses send to Washington, D.C.,” Miles Dickson, principal at The JABarrett Co. told the Nevada Corporate Giving Council luncheon June 10.

According to Dickson’s report, in 2012 alone, Nevada was shortchanged an estimated $529 million (excluding Medicaid) of funding when compared to neighboring intermountain west states. This included significant sums available but not received from the U.S. Departments of Health and Human Services, Education, Labor, and Housing and Urban Development.

“This massive shortfall reduces the quality and quantity of services throughout the state and increases the general fund usage to fill in the gaps. In turn, the demand on local businesses to provide extra financial support is increased to replenish the general fund,” said Dickson.

Of the $600 billion to $700 billion distributed in the form of grants to each of the 50 states and the U.S. territories by Washington each year, Nevada receives back an average of between 63 and 68 cents of every dollar that the state sends to D.C., Dickson said.

Many states receive between 80 and 90 cents back for every dollar they send, and 10 to 15 states receive well over a dollar every cycle due to their aggressive grant application programs.

Gov. Jerry Brown of California and Gov. Jan Brewer of Arizona have made grant application programs a priority for their states and in return receive some of the highest returns on their dollars.

“One of the things that has held Nevada back is the fact that our Legislature only meets for five months every other year, slowing the approval of grant applications,” Dickson said.

To rectify that situation, Gov. Brian Sandoval worked with the Legislature in 2011 to establish the Office of Grant Procurement.

In 2015, the Nevada Advisory Council on Federal Assistance (Grants Council) was established. This unique council of public, private, and nonprofit leaders is tasked with identifying barriers and developing solutions to increase federal grant funding.

Beginning in December 2015, the Grants Council had numerous and productive open meetings in which it identified and narrowed its focus to four primary issues that will be brought forward during the 2017 legislative session:

1. Establish a pilot fund of approximately $10 million for the biennium to allow the Governor’s Office of Finance, Grant’s Office, and state agencies the cash funds needed to secure high-priority, high-return competitive grants.

2. Fund and establish a statewide grants management system to identify and coordinate grant opportunities, as well as manage and report awarded grants.

3. Streamline the approval process for grant-related work plans while maintaining budgetary oversight.

4. Modify the language in the biennial budget authorization that creates a disincentive for agencies to pursue and secure federal grants.

Dickson is a third-generation Las Vegan with expertise and insight in public affairs, public policy, partnership development, social responsibility and strategy. The JABarrett Co. is a Las Vegas-based management consulting firm that serves leading businesses, governments and not-for-profit organizations.


First Lady of Franchising

When people ask franchising star Donna Curry where she earned her degree, she is quick to reply, “The School of Hard Knocks.” But the lack of college education did not stop her from setting goals and putting forth the hard work needed to achieve success.

Curry and her then husband came to Las Vegas in 1979 after selling a business they owned in Newark, Ohio. Curry took a job working for Cashman Photo in the Riviera Hotel. “I loved that job,” said Curry. “That was back in the days of the big name headliners and people got dressed up to go to the show. I would take their photo and sell it to them when the show was over.”

But as much as Curry enjoyed meeting the tourists and celebrities, both she and her husband longed to go back into business for themselves. “Mentally, my goal was to make as much money as I was making as a camera girl while building an asset.”

A friend back in Ohio told Curry of a little-known franchise called Subway, which at the time had only 282 stores in the entire country. After taking out a $40,000 second mortgage to pay the $3,300 franchise fee and operating costs, Curry went to Milford, CT, Subway’s corporate headquarters, to learn the business.

During her training, Curry shocked the Subway franchise team when she told them about her goal to open five locations. No individual at that time owned that many Subway franchises.

Curry opened her first store on Twain Avenue between Paradise and Swenson, in August 1983. At that time, the neighborhood was quite popular with casino dealers, pit bosses, and other middle-class workers that made her store a big success. Within nine months, she had opened a second location next to the Red Rock Theaters on Charleston near Decatur. Within a couple of years, Curry had met her goal of five locations.

Seeing Curry’s success, Fred DeLuca, co-founder of Subway, invited her to become corporate development agent for Subway. In that position, she has helped franchisees to identify new locations, negotiate leases, overseen the construction or remodeling of their new stores, and assisted them with ongoing operations to ensure that all stores adhere to the Subway brand standards.

Some of the more difficult locations to negotiate have been along the Las Vegas Strip and into the hotels. “Many people want these prime locations, and I have been able to get them for my franchisees through my networking relationships,” said Curry.

To date, Curry has helped develop 179 Subway locations throughout the Las Vegas Valley, Boulder City, Pahrump, Mesquite and the surrounding areas. Of those 179 locations, 65 are owned by Curry. In addition, Curry has invested in Winchell’s franchises and now owns 11 doughnut shops, eight of which are co-located with her Subway stores.

Curry has been quoted as saying, “You have to work really, really hard. I think when many people go into business, they think that since they own a business, they don’t have to work; just make the bank deposit and go home. That is not true. I am personally fully engaged in my business every single day. While I realize at this point, I don’t have to be this involved; I choose to be since I know you have to take care of customers and your staff.”

With Curry’s 65 sandwich shops and 11 doughnut franchises, she is responsible for the livelihood of 700 employees. That is a huge responsibility made even more challenging by talk about raising the minimum wage and the new overtime law.

“Being in business, you are a problem solver. I am a people person, and I tell everyone we are in the people business. It is just not about making sandwiches; it is about encouraging your employees to want to take care of the public, produce a good product with a clean store and friendly service,” said Curry.

That philosophy goes beyond her immediate employees and serves as a motto for her philanthropic side. Because the Las Vegas community is responsible for her success, she likes to focus her efforts on charities that are local. Curry donates 300 sandwiches each month to the Salvation Army to help feed the homeless, and each year during the DJ’s for PJ’s campaign, Curry buys one pair of pajamas for each Subway store that she has helped to develop. This year she will be donating 179 pairs of PJ’s to the cause.

Last year, Curry joined the board of the Grant A Gift Autism Foundation, which works with the family’s and kids that are born with autism to help them cope with everyday situations and give the autistic young adults a chance at scholarships and job opportunities.

“Today, one in six children are diagnosed with autism,” said Curry. “One of the things that I have done at Subway is to employ autistic kids, and it is thrilling for me to help them with their goal of getting a job.”

Curry is the proud mother of one daughter and four grandchildren who she says she loves to spoil. When it comes to her own enjoyment, she likes to read self-help books and attend motivational seminars. “I believe that if you are not growing, you are going the other way or getting stagnant. I am a real goal person and really driven, setting what I want to do next and how to achieve it.”

Curry’s next goal is to become a motivational speaker, telling her story as a non-college graduate that overcame difficulties to become a successful entrepreneur.


MGM and Republic team up on sustainability education

When you think about all the things that attract tourists to Las Vegas, a sustainability exhibit is probably not on the top of the list. In fact, it’s a bet that the vast majority of the 42 million tourists who visit each year don’t give a thought about recycling the beer and wine bottles after the precious liquid is consumed.

However, MGM Resorts International is trying to change the perception of Las Vegas by teaming up with Republic Services to introduce the Sustainability Discovery Center, located at the Mirage Hotel Dolphin Habitat.

The Habitat is a research and education facility that offers tours to more than 6,000 school children each year, teaching them about the ocean, the marine animals, and the environment in general. The Sustainability Discovery Center gives the resort an opportunity to highlight the corporate-wide commitment to protecting the global environment.

“Republic is more than just a company that picks up trash, we’re a recycling partner,” said Tim Oudman, market vice president of Republic Services. As a part of that partnership, Republic maintains a staff of employees at each MGM resort location. These employees personally sort through each bag of garbage by hand to pick out the recyclables from the food waste and other non-recyclable materials.

As a result of the MGM and Republic partnership, MGM Resorts recycles 28 million glass bottles each year. In 2015, the Mirage alone reached a 45 percent recycling rate, equaling more than 4,000 tons of material that did not go to the landfill.

David Blasko, director of the Department of Animal Care for the Mirage Hotel, is chiefly responsible for the development of the Sustainability Discovery Center. Blasko has worked with animals for more than 45 years, including the last nearly 10 years at the Mirage where he oversees the health and safety of the resort’s dolphins and white tigers.

“The one thing that I have failed to do for perhaps the first two-thirds of my career is to give people action items where they can make a difference. We have instilled passion but failed to provide a path,” said Blasko. “The big part of the Discovery Center is to define a path the visitors can take to become more sustainable.”

Outside is the beautiful Dolphin pool with an artificial coral reef and underwater viewing windows to watch the dolphins swim and play. Inside there are exhibits of sea shells along with photos and word panels that give interesting facts about the ocean. The exhibit is designed to educate people of all cultures and ages.


Near field technology racing EMV chips security upgrades

While the new EMV chip credit and debit cards are struggling for implementation, a new technology is beginning to replace the use of the actual plastic credit card altogether.

And the good news is all of the new equipment being installed to read the EMV chips already have this technology built in so there will not be an additional cash outlay for the business owner who wants to embrace the new payment advance.

For the consumer, nearly everyone with a smartphone less than two years old also has this technology in their pocket. Not only is this new technology secure, but it is also lightning fast.

The technology is called Near Field Communication and experts predict that point of sale transactions using NFC will grow to $545 billon by 2018. No doubt you have seen the NFC symbol – four wi-fi-like waves heading right — on credit card readers at the checkout stand.

Starbucks pioneered smartphone payment technology with its barcode-powered smartphone app, generating over $2 billion worth of transactions in 2014 and training its customers to use their phone to make a payment.

In 2015, ApplePay was introduced with the new iPhone 6 and 6S, using NFC technology. In head to head competition, Google revamped its Google Wallet application by introducing Android Pay. Not to be left behind, Chase Bank is introducing Chase Pay and Walmart is introducing its own Walmart Pay.

Both Apple and Android allow the user to attach one or more credit and debit cards to the account, allowing a choice for each separate transaction, just like pulling that card out of the wallet.

The obstacle to acceptance is security. Many people are reluctant to put their credit or debit card information into their smartphone for fear that the phone itself can be stolen. In addition to the passcode protection for opening the phone, most of the NFC apps have added a separate passcode to protect their use. Also, both Apple and Android have tracking programs built into their phones so that the owner can find their phone should it become lost or stolen.

Millennials, ages 18-34, now number 75.4 million and are leading the charge with this technology. They grew up in the age of personal computers and are using their smartphones for everything from a simple phone call to online purchases and banking transactions.

At checkout time, NFC technology allows the purchaser simply to hold a smartphone over the NFC symbol at the Point of Sale terminal to complete a transaction. This transaction is more secure than using the magnetic strip on the credit card and just as secure as using the new EMV chips. With NFC technology, a smartphone cannot be more than an inch from the reader device. No other devices beyond that distance can pick up the transaction signal.

The transactions are made using a security measure called a token. When you initiate a payment, your phone will send a token—a unique identifier of your phone and transaction—to the payment scanner to complete the transaction. The token is associated with your credit card (so the merchant knows whose account to withdraw money from) but is not your credit card. As a result, your actual credit card number is never sent wirelessly or shared with the merchant.

Apple is putting forward a major effort to advance their program and as of December 2015 had more than 700,000 retail locations signed up to accept Apple Pay, along with 100,000 Coca-Cola vending machines. Of course the Point of Sale readers don’t care whose NFC system you are using, which means that Android Pay along with Chase, Walmart, and any others entering the market are benefiting greatly from Apple’s promotional push.

A white paper published by Verifone, the global leader in secure electronic payment solutions and manufacturer of POS machines, states; “Consumers will be able to access a wallet app, tap their phone on a POS device and quickly and efficiently complete a transaction in just a few seconds. NFC makes it feasible for smartphone users to embrace mobile electronic wallet applications that can encompass credit/debit card accounts, loyalty programs, electronic couponing, e-gifting and other value-added applications.”

Google has also added a new feature to Android 4.4 called “Host Card Emulation” that makes is easier for companies to offer their own NFC-based mobile wallets. An independent coffee shop using this technology can develop its own pay and loyalty program that would be just as effective as the Starbuck’s app.

According to economists, mobile peer-to-peer payments in the U.S. are forecast to grow from $5.6 billion in 2014 to nearly $175 billion by 2019 as consumers increasingly skip the hassle of writing a check or going to an ATM.