Slight rise in business licenses signals modest regional recovery
September 9, 2012
In 2007, those last heady days before the clouds of recession rolled over Northern Nevada, a total of 8,234 businesses were operating in Carson City.
After five years, the number of operating businesses in the Capitol City is 22 percent less as the municipal government says 6,367 business licenses were active in Carson City in 2011.
The story was repeated in cities and counties across the region, and the declining number of businesses spelled problems for everyone from commercial real estate brokers to retailers who sell packages of cash-register tape.
Today, there are some small signs that the number of businesses operating in the region is beginning to recover.
The City of Sparks issued 645 new business licenses last year – up about 50 percent from the deepest recession years – and it’s issued more than 500 new businesses licenses so far this year.
In Washoe County, meanwhile, the number of closed business licenses declined to 759 in the most recent fiscal year – a 3 percent improvement from the previous fiscal year and a 14 percent improvement from two years earlier.
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And the number of new business licenses has ticked up slightly in recent months, says Bill Whitney, the county’s acting director of community development.
In Reno, the number of active business licenses at the start of this year stood at 24,680, an increase of 2.4 percent from early 2008.
Even so, that’s marks a sharp slowdown from the boom years. In 2007 alone, the number of licensed businesses in Reno grew by more than 9 percent.
The state government, which tracks the number of firms that are required to pay into the state unemployment fund, has a seen a slight rebound in the number of business statewide.
The number of businesses paying into the unemployment fund ticked up by about 1.8 percent during the first quarter of this year, says Bill Anderson, chief economist for the Department of Employment, Training and Rehabilitation.
Even at that, the approximately 57,000 business active in the state compares with about 60,600 in the last days before the start of the recession.
And before the recession, Anderson notes, the number of businesses in the state was growing at roughly 5 percent a year.
Among retailers with a storefront, the decline appears to be continuing.
Kelly Bland, a senior vice president and principal of NAI Alliance in Reno, says the commercial real estate firm counted 70 retailers that moved out of shopping center spaces in the Reno-Sparks region in the first half of this year.
Only 50 moved in, he says.
“It’s been a constant trend through the recession,” he says.
Bland notes, too, that home-based businesses appear to be accounting for a somewhat larger share of the firms that are being created as the economy rebounds.
Many of those firms, he says, will need a couple of years of growth before their owners are ready to move them into traditional storefront or office-building locations.
Valerie Clark, president of Clark and Associates Insurance Solutions, which markets employee benefits services, says her firm directly felt the decline in operating businesses.
“Our numbers reflected those numbers,” she says.
But she says the firm is beginning to see stirrings as new businesses come into the area and existing businesses look to strengthen their benefits offerings.
“It definitely feels better now than it did a year or 18 months ago,” Clark says.
Tim Ruffin, managing partner of the Colliers International office in Reno and a specialist in office properties, says any creation of new businesses, particularly home-based businesses, won’t immediately affect the demand for traditional offices. But the impact on the office-rental market could come more quickly than some believe.
“Most people won’t work from home for long,” says Ruffin. “There are too many distractions.”