A dozen personalities that changed the valley’s business landscape in 2012
10 December 2012
Las Vegas’ business community is filled with movers and shakers who every day make deals, invent products and try to make the community a better place to work and live.
This year, a handful of them stood out from among the crowd. They led the pack in innovation, realized massive profits, proposed reforms and measures that change the way we do business and helped put Las Vegas on the map.
These are VEGAS INC’s picks for 2012’s top 12 business personalities of the year:
If 2011 was the year Steve Hill opened the door on Nevada’s economic diversification efforts, 2012 was the year he got comfortable in the room.
Hill, who was Gov. Brian Sandoval’s pick to head the revamped Governor’s Office of Economic Development, came into his own this year as a cabinet-level director, digging into the details of a strategy the whole state is counting on.
Hill has been the point man in driving the governor’s diversification plan and formulating the details of how the state will try to lure businesses in seven key industries: aerospace defense, business IT ecosystems, clean energy, health and medical services, logistics and operations, mining, materials and manufacturing and tourism, entertainment and gambling. He served as chairman of the Las Vegas Chamber of Commerce’s State Policy Task Force and Board of Trustees.
In 2013, he’s likely to appear before the Legislature to talk about economic development efforts and lobby for business-friendly laws.
Hill also set up a network of development authorities to address diversification on a local level, crafting a series of regulations and guidelines to make the process orderly and unified. The success of those programs will determine whether Hill’s influence continues in 2013.
Las Vegas water czar Pat Mulroy acquires and sells the valley’s most precious resource: water. It’s a tough job in the desert, and Mulroy isn’t one to mince her words.
As general manager of the Southern Nevada Water Authority, Mulroy sells water to seven agencies that collectively serve 2 million residents. She also heads operations for one of the seven, the Las Vegas Valley Water District, which provides water to more than 1 million people.
She rankled customers this year when the water authority’s board approved a surcharge to help finance projects. Some companies saw their monthly water bills jump as much as 300 percent, and many said the hike would put them out of business.
In July, the water authority approved a credit to help cut those costs, but Mulroy said in September that all rates and charges are back on the table for consideration by an advisory committee.
The agency is carrying more than $3 billion in debt, much of it related to the $800 million third intake pipe being built into Lake Mead. According to Mulroy, the agency must keep at least $280 million of capital in reserve to prevent its credit rating from “going in the toilet.”
For billionaire Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson, 2012 was marked by ups and downs.
Adelson grew his wealth in 2012 and helped realize strong profits for his company. But he also contended with government investigations, lawsuits and a failed investment of at least $53 million in Republican political campaigns.
For Las Vegas Sands, investments in Macau and Singapore paid off. The company reported net revenue of $2.71 billion in the third quarter, up 12.5 percent from a year ago. The revenue makes Las Vegas Sands the largest U.S.-based hotel-casino operator.
Adelson in November was ranked the 27th richest person in the world, with a net worth of $21.3 billion, by Bloomberg Markets Magazine. His riches grew by 6.9 percent from 2011.
But that same month, Adelson took a blow when the Republicans he supported failed to win the White House and control of the U.S. Senate. Adelson was widely criticized for contributing such a hefty sum to political campaigns.
“Sheldon Adelson became the public face of what critics cast as a plutocrat class trying to buy U.S. elections,” Time magazine wrote.
Adelson and his company also were entrenched in lawsuits with fired Sands China chief Steven Jacobs, who was terminated in 2010. He says it was because he refused to carry out Adelson’s demands to engage in improper conduct with Chinese officials.
The Jacobs suit led to shareholders lawsuits against Las Vegas Sands directors, in which the shareholders accused the directors of exposing the company to costly government investigations.
On top of that, the Wall Street Journal reported that Las Vegas Sands and the U.S. Justice Department were in talks to settle a probe into whether money-laundering laws were violated when two high rollers moved millions of dollars through Sands’ casino accounts. Both were later charged criminally.
The lawsuits and investigations remain open.
There’s an old joke that in order to make a million dollars in the airline industry, you have to start with $2 million and lose half of it.
Maurice Gallagher, chairman and CEO of Las Vegas-based Allegiant Travel Co., the parent company of Allegiant Air, isn’t laughing. He is making millions of dollars in an industry that’s used to steady losses.
Allegiant reported its 39th straight quarter of profitability in late 2012. But to make that money, Gallagher and his team have instituted unconventional strategies that many people hate. Allegiant, for example, charges fees for baggage and premium seats, services that used to be free on most airlines and continue to be free on some carriers.
Much of Allegiant’s success is the result of strong ancillary product sales, both from the fees, as well as hotel rooms and rental cars. Allegiant also increased its profits this year by adding flights to Hawaii. Gallagher said the routes have been better received than executives projected.
For 2013, the company is exploring using the same business model with flights to Mexico.
Allegiant also has ordered a new airplane model that is more fuel efficient than the airline’s current planes.
But not everything is sunny on Allegiant’s horizon. The company is negotiating its first labor agreement with flight attendants, and a contract with a new pilot union will be up soon.
As CEO of NV Energy, Michael Yackira leads a power company that saw big profits and consistent dividends in 2012. And he has done it while drawing the ire of both consumers angry about rising costs and Sen. Harry Reid, who is critical of the company’s Reid Gardner coal plant.
NV Energy serves about 90 percent of Nevada’s population and earned almost $305 million of net income through Sept. 30 this year, up 62 percent from the year before. It paid $111 million in dividends during the first nine months of 2012, up 31 percent year-over-year.
Despite the higher-than-expected revenue, Yackira is seeking approval for a $9.8 million consumer surcharge to make up for lost revenue resulting from customers’ conservation measures. The move is opposed by the Nevada Bureau of Consumer Protection.
Yackira also has come under fire from Reid for operating a decades-old coal plant northeast of Las Vegas.
At a clean energy summit in August, the Senate majority leader called on NV Energy to close the Reid Gardner Generating Station, a coal-fueled, steam-electric power plant built in the 1960s. At a press conference two months later, he said the Moapa Paiutes who live near the plant have begged the utility to work with them on clean energy efforts, but the company “wouldn’t even talk to them.” And in November, when the Los Angeles City Council approved buying power from a solar plant slated to be built on Moapa land, Reid said the new facility, unlike Reid Gardner, would not spit out hazardous emissions.
NV Energy says it has added technology to capture 99.9 percent of particulate emissions from Reid Gardner.
Billionaire Steve Wynn had an eventful 2012: his company cashed in on the booming Macau casino market even while it was tied up in high-profile lawsuits and a government investigation.
Business was so good that Wynn Resorts was the only Nevada company to make Fortune magazine’s list of the nation’s fastest-growing companies. Wynn ranked No. 26 thanks to revenue growth of 26 percent and profit growth of 81 percent.
But for much of the year, Wynn and his company battled with board member and former partner Kazuo Okada.
Okada filed a lawsuit against Wynn Resorts in early 2012 demanding records about the company’s pledge to donate $135 million to a university in Macau. Okada suggested the gift was improper given Wynn’s casino license there. Wynn Resorts countersued Okada and removed him as a shareholder, redeeming his $2.7 billion stake in the company.
Wynn Resorts said it moved against Okada after he allegedly provided improper benefits to casino regulators while seeking permission to develop a gambling resort in the Philippines.
The litigation led to a U.S. Securities and Exchange Commission inquiry into the company. In addition, several shareholders filed lawsuits against Wynn directors, claiming they subjected the company to liability.
Wynn also made headlines when a Los Angeles jury ordered “Girls Gone Wild” founder Joe Francis to pay him $40 million in damages (later reduced to $19 million by a judge.) Wynn had accused Francis of defamation.
Litigation also heated up this year in the long-running dispute over Wynn Resorts’ requirement that casino dealers share tips with supervisors.
After a state judge ruled in 2011 that the tip-pooling policy violates Nevada labor law, Wynn Resorts appealed to the Nevada Supreme Court. Community activists and the Transport Workers Union sided with the dealers, while the powerful Culinary Union sided with the company. Culinary officials said a ruling against the company could upset scores of workers’ contracts statewide.
The case remains in court.
Steve Wynn encountered a political hiccup in 2012 as well. He endorsed Republican presidential candidate Mitt Romney after complaining that President Obama had repeatedly come up with “goofy, crazy, anti-business” ideas. Romney, as we all know, lost.
Wynn did score a win, however, in the U.S. Senate race between Sen. Dean Heller and Rep. Shelley Berkley. Wynn said Berkley, who was defeated, had misrepresented her vote for health care reform and had “no right to be elected.”
The best advice Phyllis James ever received came from her father.
“Don’t depend on a man,” he told her.
James has used that mantra to help her climb the corporate ladder at MGM Resorts International. She is an executive vice president and the company’s chief diversity officer.
For the past seven years, MGM Resorts has been named one of the top companies in the nation for diversity. About 63 percent of the company’s 61,000 employees are minorities. About 38 percent of supervisors are minorities and 40 percent are women. Last year, the company spent more than $140 million doing business with women and minority suppliers and contractors.
This year, Uptown Professional Magazine named James one of the Top 100 executives in corporate America.
“In addition to being an accomplished attorney, Phyllis is a remarkable champion for corporate social responsibility in our company, in our industry and in the communities in which we operate,” MGM Resorts Chairman and CEO Jim Murren said.
A 1977 Harvard Law School graduate, James has been a senior executive with MGM for more than a decade. She joined the company in March 2002 as a senior vice president and deputy general counsel. She was promoted to executive vice president in July 2010.
Despite her success, James is loathe to take credit for the company’s successes.
“We at MGM are seeking to be part of the solution,” James said. She emphasized the word “we.”
For the past 15 years, Tom Skancke has been all about transportation.
Plugged in as owner of a public affairs and political consulting company, Skancke was hired by the Las Vegas Convention and Visitors Authority to lobby for Southern Nevada’s tourism interests, particularly on highway projects that could bring Southern California tourists to the valley more efficiently.
When interest began brewing for high-speed rail in California and a company started developing a train route between Las Vegas and Southern California, Skancke thought bigger. He helped organize the Western High Speed Rail Alliance, a non-profit group of transportation planners from Nevada, Utah, Colorado and Arizona. Their mission: to begin planning a rail network in the West.
He and a UNLV professor also refined plans for an International High Speed Rail Institute, a collective of universities that would develop courses and train workers for emerging rail technology. He hopes to land it at UNLV.
Now, Skancke faces a new challenge. In October, he was named the first CEO of the Las Vegas Regional Economic Development Council, the Nevada Development Authority’s successor. His job is to help diversify Nevada’s economy so that economic downturns like the Great Recession don’t crush the state.
Skancke knows the process, and he’s well-connected. His new position may not be centered around transportation, but it’s clear he’s going places.
Las Vegas’ tech sector is expanding by leaps and bounds with startups, new products and services. A key leader in the geek revolution is Rob Roy.
Roy is founder and CEO of Switch, a digital data storage warehouse south of the 215 Beltway near Decatur Boulevard.
Protected by guards armed with assault rifles, Roy’s facility houses thousands of fiber optic lines that link Las Vegas to a national network of Internet and data carriers. He sells security, connectivity and cooling technology and boasts hundreds of clients, including Fortune 500 companies.
He designed the “inNEVation Center,” a 40,000-square-foot working space for entrepreneurs, economic development officials and academics that’s slated to open in 2013 and formed the investment group NV Angels to help fund other startups. The group has inked at least one deal so far.
Roy also has invested his own money to help local techies get a foot in the door. In June, he put $500,000 of his own money into Las Vegas social media startup Tracky, which helps customers organize their lives with calendars, data storage and to-do lists.
When Tina Quigley was appointed general manager of the Regional Transportation Commission of Southern Nevada, she rejoiced with a double fist pump. How many government leaders have you seen with that kind of enthusiasm?
It is Quigley’s high-octane energy that has won her fans and helped her climb the ranks of local government.
Quigley took flying lessons in high school and attended Embry-Riddle Aeronautical University in Prescott, Ariz., but changed her career course from piloting planes to planning for them. After completing an internship at McCarran International Airport, she worked 15 years in its planning department.
When her former boss at McCarran, Jacob Snow, become general manager of the RTC, he offered Quigley the deputy general manager job. In it, she helped launch two bus rapid transit projects and build three park-and-ride facilities, a state-of-the-art transit facility downtown and several traffic and bus maintenance stations.
Quigley was promoted to general manager in April when Snow became Henderson’s city manager.
The coming year will test her exuberance as transportation funding continues to dwindle while needs pile up. Among the projects she’ll tackle is developing express mass-transportation corridors throughout the region.
Jason Strauss/Noah Tepperberg
At a time when many nightclubs are folding, the Tao Group is expanding.
Owners Jason Strauss and Noah Tepperberg have added seven venues to the Las Vegas nightlife scene in seven years.
Last year, they saw Marquee at the Cosmopolitan become the top grossing nightclub in the United States. This year, they helped innovate the industry by introducing brunch at Lavo and assigning staff members at several properties exclusively to Las Vegas’ growing bachelorette party market.
“We’ve been able to be very innovative in our branding, our marketing and the way we produce content,” Strauss said.
Marquee alone brings 6,000 to 7,000 people through its doors every night. The Tao Group employees more than 3,200 people, including hundreds in Las Vegas.
Strauss and Tepperberg said plans are under way to open more local venues.
“We think there’s room to grow, not only in the nightclub segment but also in restaurants and day clubs,” he said.
Las Vegas’ best tourism ambassador of 2012 was a nonresident and noncitizen.
Prince Harry’s naked romp with female friends during an August billiards game at the Encore scored Las Vegas the kind of publicity money can’t buy.
Harry’s shenanigans got picked up by the British press and went viral. The Las Vegas Convention and Visitors Authority capitalized on the news by buying a full-page ad in USA Today calling out the photographer for breaking the city’s famous “What happens here, stays here” code. Jay Leno, David Letterman, Conan O’Brien and Jimmy Kimmel carried the ball even further.
Hotels.com reported that hotel searches for Las Vegas more than doubled from a year earlier and online inquiries about the city spiked. Hotels.com even named the phenomenon “the Prince Harry effect.”
The prince, no doubt, received a tongue-lashing when he got home, but local tourism officials had nothing but praise for Harry, whose selfless sacrifice gave the city a nice late-summer tourism bump.
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