NC Media Watch

A quest for reason and accuracy in letters to the editor, guest editorials and other issues of interest to the citizens of Western Nevada County.

Sunday, June 05, 2005

Grass Valley's head in the sand economics

At the June Economic Resource Council Board meeting, and on Larry Burkhardt Radio Show May 31st, Dennis Manning described the challenges of growing a business in Nevada County. Bub Enterprises manufactures after market motorcycle exhaust systems, a growing business according to Manning. Unable to find an expansion building, and unwilling to wait two plus years to build one, he bought a manufacturing facility in Wisconsin, where the cost of doing business is much lower, specifically worksmans compensation costs, better work ethic, and large skilled work force. Manning is building a new 60,000 sq. foot facility in the Loma Rica Industrial Park, but the role of this new facility will be to design and test new products, not manufacture them. All manufacturing will be done in Bub’s Wisconsin facility.

A number of local business have converted their Nevada County facilities to just design centers, moving manufacturing to lower cost states, or out sourcing manufacturing to overseas companies. While the parent company stays in Nevada County, the local tax revenues generated by the sale of manufacture goods declines, or are reduce to zero. Research and Development is an expense, not a revenue generator. Given global manufacturing trends, out sourcing and seeking lower cost labor will continue, impacting our local economy as more local companies switch from manufacturing to design and testing. The real danger is the failure of our local government to recognize this growing trend.

Placer County and Rosville’s economy is booming, Yet, they have kicked off and funded an aggressive program to expand existing business and lure-more high paying companies to town. While business is booming they are looking a head from a position of strength. This week Roseville broke ground on its own power plant, to insure its businesses do not fall victim to state wide power shortages. This is in contrast to Grass Valley, which is reluctant to even increase funding for local economic development. Grass Valley claims to be the commerce center of Western Nevada County, with half of all the sales taxes generated in Western Nevada County flowing to city coffers. Grass Valley will be impacted more than Nevada City, or the County, as manufacturing moves to other states or overseas, yet they are not looking a ahead as this trend plays over the next five to ten years. Roseville gets it, and Grass Valley does not.

Grass Valley has demonstrated a clear lack of interest in economic development. They do not attend ERC events recognizing local business success. They are clearly not increasing ERC funding to bolster local economic development, while Nevada City and the County are increasing their support for the ERC. Grass Valley funding has remained static since 1999, [See correction below] yet the ERC has established a clear record of retaining tax revenue generating business in Grass Valley. Wake up Grass Valley City Council, you have your heads in the sand. You must recognize long-term trends in the global economy, and take action now to survive in the future.

UPDATE: For more information on the ERC Mission and current economic development activites, click (here).

UPDATE CORRECTION: Grass Valley, increased their ERC contribution by $3,250 last year, the only increase since 1999.

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