Friday, May 11, 2001 | 11:03 a.m.
Now that local officials have locked up the recruitment of Varian Medical Systems Inc. to Las Vegas, they've begun seeking prospective spinoff companies and suppliers.
Varian, a publicly traded company based in Palo Alto, Calif., has committed to developing a distribution and logistics center and a training facility at the Spencer Airport Center at Sunset Road and Spencer Street. The Nevada Commission on Economic Development all but sealed the deal Wednesday with the approval of a series of tax abatements for Varian.
A Varian spokesman responded with a surprise statement -- that Varian is now considering Las Vegas for the site of a manufacturing plant for one of its spinoff operations.
Spencer Sias said the company is considering a plant that would build its Linatron linear accelerator, a device that generates a high-power X-ray that penetrates a cargo pallet. Varian is looking to develop the device for airports to scan large volumes of baggage simultaneously and improve aviation security.
Sias said it was too early to project if and when a manufacturing plant would be built or how many jobs that would create in Southern Nevada. The devices presently are built in Palo Alto.
"Nevada did a very nice job of making us feel welcome," Sias said after the commission meeting in Carson City.
Varian, whose 80 employees will make an average salary of $26.77 an hour, will get sales and use tax, business tax and personal property tax abatements. Based on the company's proposed investment of $8.4 million, that would mean a sales and use tax savings of $445,489 in the start-up phase, a business tax savings of $20,000 over 10 years and a property tax savings of $231,916 over 10 years.
Officials who were instrumental in convincing Varian to come to Las Vegas were pleased with unanimous approval of the tax incentives.
"This has been a team effort from the start," said Lee Phelps, managing member of Nevada Real Estate Group LLC, which operates the Spencer Airport Center. "It was our group, City National Bank, the NDA (Nevada Development Authority), Pat Marsh of Colliers International, B.H. Miller Contractors, and now the state.
Varian will occupy two buildings at the center, one a 60,000-square-foot facility for research, sales and instruction, and a 19,000-square-foot warehouse and distribution center.
"I'm just really proud that we have been able to bring a fine company involved worldwide with such great cause -- cancer research -- to Southern Nevada," Phelps said.
Marsh, vice president of industrial properties with Colliers International's Las Vegas office, said Varian had dealt with Colliers in the San Francisco Bay area and the contact was handed off to the local office when it considered relocation.
Marsh credited the Nevada Power Co. in the negotiations with Varian.
"They (Nevada Power) answered all their questions about electricity needs," Marsh said. "I think they really put Varian at ease because they just getting tired of dealing with the blackouts in Palo Alto. Nevada Power was key in getting additional power to the property and upgrading the power system. The power issue would have been a deal-killer."
Jody Mack, vice president of economic development for the Nevada Development Authority, said the NDA has begun recruiting biomedical companies considering relocations now that Varian is committed to moving.
"We're looking at suppliers and spinoff companies that would work well with Varian," Mack said.
Varian's planned training center would give the company quick access to McCarran International Airport's 438 daily flights to bring technicians to the city to learn to use the company's medical products.
The company employs more than 2,300 people in manufacturing sites in North America and Europe and in 40 sales and support offices around the world. Its primary business sites are at company headquarters in Palo Alto, the current training center in nearby Milpitas and other operations in Mountain View, Calif.; Salt Lake City; Chicago; Charleston, S.C.; and Charlottesville, Va. The company also has an international presence in Crawley, England; Espoo, Finland; Buc, France; Baden and Zug, Switzerland; and Tokyo.
There are more than 4,750 Varian Medical Systems devices in service around the world. The company produces the Clinac medical linear accelerator and the Ximatron simulator for cancer radiotherapy, treating thousands of cancer patients every day.
The company's X-ray tubes are sold to most major diagnostic equipment manufacturers, Varian's Sias said, and those machines are used for mammography and CT scanning.
The Commission on Economic Development also approved a series of tax abatements and deferrals that will help other Clark County companies.
Tririga Inc., a software company expanding in Clark County, was approved for sales and use tax abatements and deferrals and business tax abatements. The company is expanding its operations from 102 to 136 employees, who will have an average wage of $34.23 an hour. The company will acquire about $15 million worth of equipment in its expansion.
The commission also approved funding for Ford Motor Credit Co.'s "Train Employees Now" program. The Henderson company will be eligible for $112,984 in tax credits to train 460 new applicants.
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