The biggest little drone city in the world?
Last spring, Matt Sweeny flew from his hometown of Sydney, Australia, to San Francisco. Amid the clothing he’d packed in his suitcase, enough to last him three months, was a silver, saucer-like drone.
Sweeny, a hale 26-year-old with blond highlights, tinkered with his first drones in his dorm room. He’d arrived in San Francisco with the same goal as the other hopeful young tech workers who stream into the Bay Area every week: to secure investors for his startup. He was further along than many of them; his 6-month-old company, Flirtey, had lit up the international press the previous October with promises of delivering textbooks via drone, predating Amazon’s announcement of its own drone-delivery ambitions by two months, and Google’s by ten. Sweeny hoped that his company’s friendly name and breezy branding (Stuff by air. Anytime. Anywhere.) would soften the perception of unmanned aerial vehicles (UAVs) as assassin machines.
As he and his drone Ubered from investor coffee to investor dinner, Sweeny pitched a future in which ubiquitous Flirtey drones delivered everything from pizzas to units of blood. The company had already completed more than 100 test deliveries in Australia and was eager to expand to the U.S., where regulation of commercial drones was just getting underway. Sweeny had envisioned an office with a view of the bay, but as he spoke to industry watchers in California, he heard that much of the actual flying would be happening several hundred miles east, in Nevada. The state has long been a hub for military-drone development and deployment, and in December, it was chosen by the FAA as one of six testing sites for commercial drones. So, four weeks after landing at SFO, Sweeny rented a Mustang and blazed east on Interstate 80, toward a city whose name he’d heard for the first time just days before.
Upon his arrival in Reno — long viewed as a seedier, warmed-over Vegas — Sweeny realized that the power dynamic had flipped. In the Bay Area, he had pitched investors who were seeing ten other entrepreneurs a day — a real-life version of Shark Tank. In Reno, he was escorted around the city in an SUV by a business development booster. He shook hands with the dean of engineering at the University of Nevada at Reno, which had recently begun offering a minor in drones. (A local community college is developing a UAV program as well.) He checked out “Startup Row,” a few blocks of tech incubators and offices along the Truckee River downtown.
It was an effective pitch. Sweeny moved from Sydney to Reno in June, having negotiated “very, very cheap rent” and use of the university’s indoor testing facility in exchange for an equity stake in his company, research collaboration, and a commitment to hiring from the school’s pool of drone minors.
Analysts estimate that commercial drones will become a $1.1 billion industry within a decade. The FAA has been slow to anticipate regulatory issues, but its 2013 request for applications from would-be testing sites set off a scramble by various states, universities, and airfields to capture a piece of this emerging economy. Nevada’s case rested heavily on its massive airspace and existing network of drone pilots, thanks to Creech Air Force Base, outside Las Vegas. Savvy officials in Reno, whose casino economy has been on the decline for more than a decade, recognized a potential opportunity.
One afternoon in August, Joel Grace, vice president of marketing and competitive expansion at the Economic Development Authority of Western Nevada, gave me a variation of the SUV tour that had worked so well on Sweeny. Driving down Reno’s main thoroughfare, Grace dismissed the sights his city is known for — check-cashing and liquor stores, a scrubby casino whose parking-lot marquis flashed STAY CALM AND DILDO ON — as “the crud.” He parked outside a former city building inspections office whose mirrored windows reflected the Harrah’s casino a few blocks away; a floor of empty cubicles in the building was set aside for a new public-private university research center for unmanned systems. In addition to Sweeny, Grace said, his team is in talks with six drone companies considering moves or expansions to Reno, and one of them, the Pasadena-based Ashima Devices, is planning to build a 35,000-square-foot plant in Reno to manufacture its Hexpuck UAV, to be used for firefighting, search and rescue, and police work.
Barreling down Route 395, past the rainbow-hued Atlantis casino, Grace listed Nevada’s business-friendly bona fides: “no inventory tax, no franchise tax, no unitary tax, no corporate income tax, no personal income tax, no inheritance tax.” Reno is an hour’s drive from Lake Tahoe’s skiing, kayaking, and rock climbing, he boasted, houses are cheap, and the community is small enough that “you’re one phone call away from the mayor at any time.”
When we pulled up to Reno Stead Airport, one of Nevada’s designated testing sites, the municipal airfield was scattered with weekend-warrior Cessnas. Stead hosts the popular Reno Air Races each September. While airport officials did not receive permission for a Reaper drone to fly the course this year, as they had hoped, other models were parked in a “drone petting zoo.” We found Lieutenant Colonel Warren “Bum” Rapp in his office, a military model helicopter sitting on his desk. A 27-year veteran of the Marines and Air Force, and the former drone operation commander at Creech, Rapp had recently moved back to his native Reno to man the commercial front: Since May, he’s been running the state’s testing program, corralling paperwork, advising companies, and proselytizing for the drone industry at the Reno Rotary Club and the Nevada Business Alliance.
Since test drones were not yet zipping around the airport, Rapp picked up a DJI Phantom quadcopter that he’d bought on Amazon and walked down to the building’s indoor atrium. He set the 3-pound unit on a table and, using its hand controller, started the propellers whirring. The Phantom lifted off, gradually climbing 10 feet in the air, hovering and pirouetting, dipping and rising. Grace snapped photos on his smartphone for his 9-year-old son. Rapp, staring at the drone intensely, landed it in the center of the table, looked up, and grinned.