In a city where booty shaking can win you $10,000, it’s refreshing to see big money thrown at big ideas. The money is a $1 million grant from federal initiative Strong Cities, Strong Communities (SC2). The ideas are anybody’s guess. They might even be yours.
The Las Vegas City Council accepted the grant last week, committing to its own $250,000 investment in a public contest for a “comprehensive economic vision” for Cashman Field, the Medical District, business parks and existing redevelopment zones. The best proposals will win $10,000, $30,000, $60,000 and an $800,000 grand prize.
Councilmen Bob Beers and Stavros Anthony voted against participation in SC2, a pilot program of the U.S. Department of Commerce’s Economic Development Administration. Anthony told the R-J he can’t abide the notion of $800K going toward some beach house in San Diego instead of concrete city projects. “It obviously is politically contentious,” says Brian Knudsen, community resources manager and lead on the grant’s execution. “But the EDA strongly believes that’s the best way to bring out the most creative, most brilliant ideas.”
Peter Thiel, No. 3 on Forbes’ Midas List of venture capitalists (net worth about $1.6 billion), is a backer of sexy endeavors like SpaceX and Spotify, not to mention the first institutional investor in Facebook. Every year, his Thiel Foundation pays 20 college kids to drop out and be entrepreneurs with “no-strings-attached” $100,000 grants over two-year fellowships. That’s how much Thiel believes in incentivizing human ingenuity. Perhaps the government thinks he’s onto something.
Picture President Obama and Las Vegas Mayor Carolyn Goodman kinda like Shark Tank’s Mark Cuban and Barbara Corcoran, buying into and refining creativity. Venture capitalists do it for personal profit, but in the process they catalyze job creation, tech advancements and new tax revenues. In IHS Global Insight’s 2011 Venture Impact study, the performance of venture-backed companies is shown to equal more than 20 percent of U.S. GDP and more than 10 percent of private-sector employment, with trillions in revenue.
But an estimated 40 percent of venture-backed companies fail, and only 20 percent yield high returns. Good ideas don’t always pan out. That’s the risk SC2 is taking. Knudsen says the city’s $250,000 is a bargain for the number of “really credible, really good, juicy plans” likely to come out of the contest after October’s big launch. But is it the government’s place to pour no-strings cash into equal-opportunity brainstorming? “It really gets down to your philosophical beliefs about what government should or could be,” Knudsen says, adding that whatever its source, money brings people to the table and empowers them to be bold. “Something like [SC2] says, ‘Let’s think differently about what our community can be and put some energy toward the creation of something new.’”