Feature Stories - September 2000

THE CALIFORNIA INVASION

Will Newcomers Turn Our State into Californevada?

by Cindie Geddes

So, what’s so bad about California? Countless articles and news stories lament the impact of California businesses moving to other states and then trying to turn their new homes into replicas of the old. Some states, such as Oregon and Washington, are practically ready to check ID’s at the border. Meanwhile, Nevada welcomes these businesses, confidently enough to embrace the best California has to offer (its people) and reject the worst (regulatory red tape and taxes) without changing its own indomitable pioneer spirit.

While Nevada searches for economic diversity, it does not do so at the expense of all the features that have made the state great, such as a common sense approach to regulations, low tax base, and natural beauty. EDAWN (Economic Development Authority of Western Nevada) President and Chief Operating Officer, Chuck Alvey, is adamant about not courting businesses that will hurt our environment or our workforce, be it through practice or attitude. Alvey says that if a company is coming here thinking they can get away with polluting the environment or can just get a cheap workforce with no thoughts about quality, he doesn’t want them.

"We want to keep our state pristine," says Bob Shriver, Executive Director of the Nevada Commission on Economic Development. "We don’t want to sacrifice that, but we want a common sense approach, flexibility, a practical approach to regulations." Kris Holt, Executive Director of the Northern Nevada Development Authority in Carson City, says most people coming to Nevada are family-oriented and will live near the city they invest in, making them unlikely to try to hurt that community. Alvey agrees. "People coming here don’t want it to be like what they left," he says. Hank Gordon, President of Laurich Properties, Inc. in Las Vegas, puts it simply: "They move here to escape."

Jerry Sandstrom, Vice President of Client Services for the Nevada Development Authority in Las Vegas, says Nevada is already under many of the same regulations as California. We use the same national building code, the same national fire code, the same electrical code, and we are under the same region of the Environmental Protection Agency. The difference, according to Shriver, is in enforcement. "We want to drive regulatory compliance with the same customer service mentality we have for other major service industries," he says. "This will work very well." In Nevada, regulators are more likely to approach a business by telling them what they need to do and then offering to help them achieve their goals. "It’s all attitude," says Shriver. "We need to keep doing this," says Alvey, "making sure our standards are stringent, but our processing is as easy as it can be. We don’t want to make people jump through hoops, but we don’t let them get away with things either."In that spirit, Nevada has done a great job keeping the permitting process streamlined. The difference between Nevada and California when it comes to regulating, says Sandstrom, is the length of time it takes to go through the process. There are not a lot of entities that have the right or responsibility to comment on permit applications, so by not having to get numerous approvals, the whole process is faster.

The speed of getting through the regulatory process is not the only thing that brings California companies to Nevada. Our outdoor beauty, shorter commute times, cheaper cost of living, and our tax structure all serve as lures to California-weary business owners. But when they get here, they are often surprised by some of the other things the state has to offer. Alvey estimates that 9 out of 10 people he helps move here have their expectations exceeded. "People are surprised by how nice and friendly it is," he says. "They like that, and the green and parks, the ease of getting around, good schools, good cultural and arts offerings, affordable houses." Holt says many also comment on the ease of getting in touch with local or state officials. "You can pick up the phone and talk to the governor or the mayor," he says, "or have lunch with the city manager." Input into the political system can be as easy as a phone call or e-mail.

Gordon says one of the things that surprises retailers is the bottom line. Many companies find profits much larger than they expected. One reason is the ability to sublease parts of the store for gaming; another is disposable cash. Tips run Las Vegas, and cash is cheaper for retailers to process than credit.

Both Shriver and Alvey say the new kids on the block make for the best advertisements. Shriver says he tries to connect potential movers with companies new to the state to talk peer to peer. "I don’t even like to be in the same room," he says, "so they can talk about issues and lessons learned." The conversations seem to almost always be positive.

Unlike much of the West, Nevada is not experiencing a lot of drawbacks with the California migration. The companies that move here are bringing knowledge, skill sets, volunteerism, financial contributions, and tax dollars. Even the trailing spouse often adds to the benefits, as so many are professionals who bring needed skills to the area.

Part of the reason Nevada seems unthreatened by California lies in simple proximity. With both Reno and Las Vegas being a short drive from the border, the two states have a good flow back and forth of information, culture, and attitudes. Most of us have friends and family in California. In Las Vegas over 38% of residents come from California. We share newspapers and deserts, television stations and forests.

Nevada has always been a state for rebels, idealists, risk takers, and free thinkers. The pioneer spirit still defines how business is done. And many of the people who move here share that spirit. Holt says he sees a lot of people come here with energy. They are taking a bold step to move their families and their livelihood. We have a good idea who we want to be, how we want to do things, problems we want to avoid. In many ways, California is a good bellwether for Nevada. We watch from just this side of the border and shake our heads at their mistakes – mistakes from which we try to learn.

Holt estimates that up to 55 percent of his clients come from California. Sandstrom puts that number at nearly 40 percent. California has to lot to offer in areas of education, technical skills, and management, among other categories. Alvey says it would be silly to ignore these benefits that lie right under our noses. Gordon welcomes opportunities to diversify the economy. Sandstrom enjoys the mix of cultures and lifestyles.

The only significant complaint is the idea of "I got mine" -- companies that move here and like it so much they want to seal off the borders behind them. Those who have lived here their whole lives certainly understand that sentiment. However, as long as Nevada continues to offer a great quality of life and a friendly business environment, and as long as we remain neighbors with California, the migration will continue. As Sandstrom says, "this is the best place to be. People wouldn’t come here if they weren’t looking for something better for their lives. And apparently they are finding it because they are staying."