Monthly Archives: September 2016

Asian Influence and Population Growth Brings Economic Benefit to Vegas Valley

 

Anyone who has lived in Las Vegas more than 30 years has seen a lot of changes, not only along the tourist corridors of the Las Vegas Strip and Downtown’s Glitter Gulch, but the neighborhoods and side streets as well.

Spring Mountain Road, which starts at Las Vegas Boulevard and heads west to Hualapai Way, is one of those major streets that has seen dramatic change visually and culturally.

Now, distinguished by its Asian-themed restaurants, grocery stores, shops and medical practices, it is hard to picture Spring Mountain’s early days as a semi-industrial blend of warehouse buildings with storefronts and vast sections of desert.

The August opening of the $1 million Chubby Cattle restaurant at the corner of Spring Mountain and Jones Boulevard is one of the high-water marks for the road. Owner Harby Yang spared no expense when designing the 3,600-square-foot space, complete with a waterfall, custom designed 3-D recessed sky ceiling, custom-made, hand-cut tables with induction cookers and seating for 160 guests.

By recruiting Master Chef Mr. Ho, former corporate chef for Little Lamb International, Chubby Cattle also adds to the list of distinguished chefs that now call Las Vegas home.

This restaurant is looking to reform traditional Mongolian cuisine and is the first of its kind to combine refrigerated, conveyor belt-based hot pot with the finest traditional foods from Asia. The goal is to provide customers with the healthiest way to enjoy fresh dishes.

Looking back in history to 1988, the only authentic Asian influence on Spring Mountain was the Cathay House Chinese Restaurant. Located just west of Decatur Boulevard, the restaurant had an unobstructed view of the entire Strip and was known for fine dining.

However, all of that changed nearly overnight in 1995, when James Chen, the Taiwanese-American owner of JHK Investment Group, bought the two block warehouse-retail complex at the corner of Spring Mountain and Valley View Boulevard and gave it a complete makeover, using traditional Chinese architectural colors and facades and rebranding it as Chinatown Plaza. Chen even built a paifang, a traditional-style Chinese arch as a gateway to the plaza.

Promoted as a blend of “East meets West” where Asians can buy traditional products and others can experience Asian culture, the plaza became an immediate success.

In 1999, then-Gov. Kenny Guinn officially designated this section of Spring Mountain as Chinatown, prompting exit signs off Interstate 15 and a rapid westward expansion of Asian culture businesses to Rainbow Boulevard where the Korea Town Plaza now occupies a prominent corner featuring the Greenland Supermarket and food court.

Around 2004, the modern Pacific Asian Plaza opened with a supermarket and 31 businesses, from restaurants, tax services, insurance companies, hair salons, a massage school, real estate offices, smoke shops and a lounge.

According to Lana Pazargad, coordinator for the Plaza, “The businesses are predominantly Chinese and Korean, but there are shops owned by immigrants from about nine separate Asian countries.”

In 2006, an Asian-themed hotel-casino was planned for the southeast corner of Spring Mountain and Valley View, but as with many projects, the recession made those plans crumble. Today, that site is owned by Fore Property and construction has started on a 295-unit apartment complex with modern amenities. Citing the fact that Chinatown is a “vibrant area,” the owners are hoping to capitalize on the abundance of restaurants and shops located just across the street.

dina-titus-2During the Aug. 25 meeting of the Asian Chamber of Commerce, U.S. Rep. Dina Titus was the featured guest speaker and complimented both the chamber and its members on the significant contribution they have made to the community and the economy.

Quoting statistics, Titus stated that outside of California, the Las Vegas metropolitan area has the third-largest Asian population of any metro area in the western U.S., growing from 3 percent in 1990 to 10 percent of today’s population.

“Not only is the Asian community 10 percent of our population, it is also 9 percent of the electorate in Nevada. In some of the close elections, for which Nevada is famous, the Asian vote has made a key difference for candidates winning by just 6 to 8 percentage points,” Titus said.

According to the U.S. Census Bureau, Asians overtook Hispanics as Nevada’s fastest growing immigrant group — almost doubling the growth rate of immigration from Mexico and Central and South America.

Of the current population, the Filipino-American contingency is the largest, followed in order by the Chinese, Japanese, Korean and East Indian populations.

In 2015, Robert Lang, director of Brookings Mountain West, told KNPR’s “State of Nevada” that one of the biggest draws for Asian immigrants has been the availability of health care jobs.

According to Lang, Nevada went looking for those skilled workers from Asia and has benefited greatly. “We would be worse off if we didn’t have so many Filipino nurses,” Lang said.

Titus, during her speech, found it interesting that “In the high schools in my district, which are so varied, during the last school year Tagalog (spoken in the Philippines), Japanese and Vietnamese are among the top five languages that were spoken.”

According to David Zhao, CEO of NXTFactor, a partner in the Chubby Cattle Restaurant, “after researching the hot pot market in Las Vegas, we saw a huge opportunity to open Chubby Cattle, as there were no modern and authentic hot pot restaurants in the area. The soup base, sauce station, cooking method, food distribution system, quality of food and drinks were just outdated. It’s time to revolutionize the hot pot experience and to be able to showcase this world-renown cuisine (with both history and culture) to the West.”

The Cathay House, which suffered in popularity and then financially after the vacant property just to the east was developed, blocking the picturesque view of the Strip, has been closed and reopened multiple times. In 2013 the name was changed to The Jade Restaurant and in January of this year the property was sold again and reopened again after a major renovation under the name Hong Kong Dim Sum and Seafood Garden II.

As for the Chubby Cattle, Zhao has high hopes for the prominent location along Spring Mountain’s prosperous Asian-themed corridor but is not stopping there.

“Consider this the first location for Chubby Cattle as we plan on taking it to the high-profile hotels and potentially along the Las Vegas Strip. We’re already in discussion with upcoming establishments for opportunities for the second franchise of our conveyor-belt hot pot and barbecue experience,” Zhao said.

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Compound pharmacies spread to meet need for customized prescriptions in Southern Nevada

In the past six years, compound pharmacies, which customize prescriptions according to a physician’s specifications, have spread in Southern Nevada. The niche market is growing both locally and nationally.

Customized prescriptions are necessary for patients who need a specific potency that isn’t available in premanufactured, over-the-counter doses, or to eliminate inactive ingredients that may cause an allergic reaction in patients. These pharmacies also prepare prescriptions for alternative routes of administration, and can change or enhance flavoring to make a prescription more palatable.

According to American Pharmacist, an industry trade group, about 65 percent of the nation’s independent pharmacies provide compounding services. These pharmacies fill prescription orders for the general public, and also serve hospitals, senior care facilities and other specialty care medical facilities, the group said.

In Las Vegas, the oldest retail compound pharmacy is Partell Specialty Pharmacy, licensed in 1991, that has two retail locations. In 2006, Solutions Specialty Pharmacy opened, followed by Precision Specialty Pharmacy in 2010, each with one location in the valley. From 2012 to 2014, four other compound pharmacies were licensed locally.

Adults 65 and older are likelier to have chronic illnesses, which increases demand for prescriptions. Also, elderly people often require personalized dosage forms, flavors or medications that comply with their allergies and alternative routes of administration.

Industry size

The Pharmaceutical Research and Manufacturers of America reports that about 3.6 billion prescriptions are dispensed in the United States each year. The U.S. Pharmacopeial Convention estimates that 30 million to 40 million of those prescriptions are compounded medications.

According to the report, there are 5,513 retail compounding pharmacies in the United States, which generate $5.6 billion in revenue and $1.5 billion in profits. From 2015 to 2020, industry revenue is forecast to grow at an annualized rate of 2.6 percent to $6.4 billion. The breakdown of revenue sources are:

■ Pharmaceutical ingredient alternation 35 percent

■ Pharmaceutical application alternation 20 percent

■ Currently unavailable pharmaceutical manufacturing 20 percent

■ Pharmaceutical dosage alternation 15 percent

■ Specialized animal pharmaceutical 10 percent

Most major hospitals have their own in-house compounding pharmacies that aren’t included in this survey.

Licensing

A Nevada State Board of Pharmacy representative said compounding is a general term referring to pharmacies that dispense medications according to a physician’s prescription.

Dispensing a 30- or 90-day supply of pills, or liquid medicine, even if premanufactured, is a form of compounding. However, not every pharmacy is equipped or has the expertise to mix pharmaceuticals to a custom strength/potency, and package them as directed in capsule, liquid, cream, gel or powder form.

Although all pharmacists graduate with basic compounding knowledge, pharmacists who work in compound pharmacies take specialized continuing education courses in compounding medicines.

Professional Compounding Centers of America, an education organization training pharmacists in compounding techniques, supplies compounding equipment and maintains a database of over 8,000 proprietary formulas of medicines that have been pretested.

“Our pharmacists have access to proven and pretested formulas, which we use as the basis for our compounding work. The formulas are made up of inactive and active ingredients, and after we mix those ingredients together, the compound is tested to make sure it meets the potency requirements prescribed by the physician,” said Precision Specialty Pharmacy owner George Maiorano.

Sterile versus nonsterile

There is a distinction between being able to compound sterile and nonsterile pharmaceuticals. Nonsterile medications are pills, creams, lollipops and gels that are not contaminated by exposure to the atmosphere. Sterile medications are those produced within a special bacteria-free environment, and delivered by injection or IV bags. Only three of the seven compound pharmacies in Las Vegas — Partell, Precision, and Solutions — have the facilities to produce sterile medications.

Besides compounding, most of the specialty pharmacies also dispense standard premanufactured medications and health products.

“We do it as a convenience to our customers,” Maiorano said. “Many of our customers want to shop in a single location, so we also provide them with heart or diabetes, and other medicines, that they take on a regular basis.”


Businesses struggle under the weight of merchant cash advance loans

Government agencies, banks and consumer advocacy groups have been trying to find ways to clamp down on the predatory nature and proliferation of payday and title loan businesses.

However, hiding in the shadows is another growing industry that is taking advantage of small businesses in Las Vegas and across the U.S. They are companies offering merchant cash advance loans and are cleverly disguised to skirt the usury laws.

Not any longer: The city of Chicago and the states of New York and California are leading the charge to develop legislation that will help business owners avoid the predatory lending practices of merchant cash advance companies.

The merchant cash advance loan business is a new industry that developed during the recession of 2008 when, because the bank lending criteria became so tight, very few small businesses could qualify for traditional loans. However, these same small businesses still needed the occasional short-term cash infusion to maintain business operations.

Modeled after the payday or title loan advances, merchant cash advance loans use a business’s receivables as collateral. The receivables can be the daily credit card transactions or invoices to clients. To pay the loan back, a percentage is taken directly from the business’s checking account on a daily basis. And, if a business misses a payment because there’s not enough money in their account, the loan company has the right to call the loan all due and take all of the money out of the account the next time funds are available.

Credit underwriting for these companies will monitor the borrower’s bank statement to decide how much money they can take out of the borrower’s account based upon the cash flow, to pay themselves back. While many of the lenders state that there are no “hidden fees,” the pricing of these loans is never clear and usually based on very high fees. The fees are not called interest, so as not to look like a loan and to avoid banking laws.

An abbreviated list on the internet shows 50 non-bank, private companies that offer cash loans to businesses. The internet pop-up ads all make similar claims of:

■ E-Z online application!

■ Funding in 24 hours!

■ No collateral!

■ Open a free account in under five minutes!

While each of the merchant cash advance lenders competes heavily for business, most have similar terms and interest rates. To qualify, many of these lenders also force businesses to switch to their own credit card processing service, which usually charges a higher credit card processing fee than the more common processors.

David Cabral, president of Las Vegas-based Business Finance Corp., has analyzed several of these types of loans for his clients and was shocked by the results.

“We recently looked at a loan that was made to a small business for $20,000. The payments were $220 a day, and our calculations showed that the loan would be paid off in 126 daily payments — about six months. The total payments will equal $27,800 and amount to an 81 percent annualized interest rate. If the loan were paid back in three months or less, the payoff would be $24,800 and amount to a 96 percent annualized interest.”

“We also recently saw a loan agreement with one of these companies in which the business owner assigned his building lease to the lender and gave the lender specific rights to walk in and take over their company if the loan was in default,” Cabral said.

Cabral cautioned that “some of these companies call their documents factoring agreements to circumvent state lender licensing regulations.”

Business Finance Corp. is a Las Vegas-based company that “factors” or purchases business accounts receivables.

“The difference is when a company like ours purchases specific invoices at a specific agreed upon discount price, we advance a percentage of the invoice(s) to you, the business owner, and when the customer pays the invoice, we are paid back, and our client receives the balance of the funds due them,” Cabral said.

According to the Business Finance Corp. website typical factoring discounts range from 3 percent to 5 percent for 30 days.

In Chicago, Mayor Rahm Emanuel has launched a campaign to help business owners avoid the predatory lending practices of business-to-business lending companies like merchant cash advance lenders. He has instituted a Chicago Microlending Institute (CMI) that offers financial counseling and affordable loans. In addition, an amendment to Illinois Senate Bill 2865 establishes lending parameters and requires a licensing fee along with a $500,000 surety bond for private businesses that provide merchant cash advance loans not exceeding $250,000.

Earlier this year, the Obama administration asked the Consumer Financial Protection Bureau to look at ways to crack down on the personal payday and title loan operations while the merchant cash advance lenders are being ignored. However, Emanuel is increasing his pressure by calling for other state and federal agencies to increase their regulations of the industry.

Apparently, New York is listening, and its state Assembly has introduced legislation requiring its Department of Financial Services to study online small business lending and prepare a report by Jan. 1, 2018. The scope of the study includes determining whether online lenders are offering credit at reasonable and transparent interest rates and fees and offering payment terms that can be met by borrowers. The department also has been directed to go into the type of underwriting conducted before issuing credit, and to check whether lenders verify borrowers’ credit data before providing funds.

California is also taking a serious look at this issue. A recent Bloomberg BNA report shows that California is collecting data from the largest online lenders to enable state officials to draft a non-bank lending statute to be used as an enforcement and regulatory tool. A report issued on April 8 shows details collected from 13 of the country’s biggest online lenders, that small business borrowing from online lenders grew from $1.99 billion in 2010 to 15.91 billion in 2014.

A study by the Opportunity Fund, California’s largest micro-finance lender, found that small businesses that borrow from online lending companies pay an average annual percentage rate of 94 percent. Of the 150 loans made by 54 different small business lenders, one carried an APR of 358 percent while 24 loans had interest rates that averaged 178 percent.

Another report by the Woodstock Institute studied 15 loans by online lenders to Chicago businesses. It found that five loans carried rates between 26 percent and 60 percent, four loans were granted at rates of 324 percent or more and the remaining had interest rates of 94 percent or higher.

Nevada does not have a limit on the rate of interest to which parties may agree so long as the agreement reflects an arms-length transaction. Nevada also allows for compound interest on loans.

While Nevada does not have a general limitation on interest rates, certain transactions and businesses are subject to restrictions. Pawnbrokers, for instance, are prohibited from charging more than 13 percent per month on any loan secured by personal property that is pledged to, or held by, a pawnbroker.

Both consumers and businesses can contact the Nevada Bureau of Consumer Protection, under the direction of the attorney general and consumer advocate for advice on activities that fall under the Nevada Deceptive Trade Practices Act.

An alternative to borrowing money from merchant cash advance lenders may be to apply for a loan through the federally funded Small Business Administration. The drawback for a company needing immediate cash is that the application process is not very fast and requires the development and approval of a business plan, which also takes time to write. Also, businesses may be required to fulfill training or planning requirements before a loan application is approved, another time investment before the cash can be received.