Huge casinos, much like those in Las Vegas, dominate the skyline of Reno, Nevada’s second largest city. But unlike Las Vegas, Reno’s skyline became a symbol of an industry in decline, as a nationwide relaxation of restrictions on gambling diminished the number of visitors coming to the city.
And while the city has been trying to attract visitors other than gamblers, their numbers could hardly keep the economy afloat, especially in the wake of global financial crisis.
“We were hit particularly hard by the recession and in need of finding a new identity for the city,” says Hillary Schieve, a Reno native and entrepreneur who has been mayor since 2014.
Forced to pivot
It is not the first time that Reno has been forced to reinvent itself. For seven decades it was known as the US's 'divorce capital' until the liberalisation of the divorce laws in other states brought the growth of a profitable industry to halt. This time around, the new identity came in form of tech investments from companies such as Tesla, the electric car and energy storage producer, which in July 2016 opened a lithium-ion battery factory close to the city, and Switch, a data centre developer and operator that decided to build a $1bn data centre campus just east of Reno.
What attracts tech companies to the city with virtually no history of tech innovation? “Pro-business climate,” says Ms Schieve. More specifically, low taxes and incentive packages: Reno is located just a short drive from the California border and it benefits from Nevada’s tax structure.
In the latest State Business Tax Climate Index published by Tax Foundation, a Washington, DC-based think tank, Nevada came fifth among all US states. By comparison, California took a lowly 48th place. “We have a good business climate, but also a good climate overall as we never experience extreme heat such as [that that] Las Vegas gets,” adds Ms Schieve.
Good climate for business
Its lack of extreme temperatures also makes Reno an attractive location for data warehousing companies, as well as drone testing, one of the industries for which Ms Schieve wants her city to be known. Aiming to attract more drone-related firms to the city, Reno authorities follow the model tried and tested when the city wanted to attract casinos and divorce-related firms: allowing businesses to do what is limited or prohibited elsewhere.
“We are in the process of putting special laws allowing drone tests as well as looking in ways how we can cut the red tape when it comes to this type of businesses,” says Ms Schieve.
Reno has already has some success in attracting drone firms, such as Ashima, a drone maker that in 2014 decided to relocate its headquarters to the city from Pasadena, along with 400 employees. The past year has brought even more headlines for Reno in connection with drones, as in October NASA tested unmanned devices in the city, and Flirtey, a local start-up, partnered with Seven Eleven, a multinational convenience store chain, to offer the first customer-oriented delivery service.
And while Reno is still better known for its divorce and gambling industries, the odds are that with a change of identity, the casino heavy-skyline of the city will soon gain more familiar tech names along with the odd drone.