Nevada officials dismiss LV firm’s return to California

Kevin Rademacher

Tuesday, Sept. 21, 2004 | 11:05 a.m.

Nevada economic development officials aren't sweating a Monday morning media stunt by California Gov. Arnold Schwarzenegger.

The movie star-turned-politician showed up in La Verne, Calif., with a moving van to announce that a Las Vegas company had returned to California.

The company, Lynch Sign Co. of Las Vegas, took Schwarzenegger up on his offer to send a moving truck to bring back the first business that decided to return to California. The California governor made that promise at an August event at the Fashion Show mall in Las Vegas.

That event was punctuated by gawking fans, loud music and theatrical smoke. At that point, Nevada officials said the effort to lure companies back was more show than substance. On Monday, their opinions had not changed, despite the news of Lynch's relocation.

Somer Hollingsworth, chief executive of the Nevada Development Authority, pointed out that the company had only 11 Las Vegas employees at its production facility.

"I've never heard of them," he said, pointing out that calls continue to pour into his office from California companies seeking to leave amid rising costs. "Everything we looked at this morning, all the companies were from California."

Candice Doi, owner of Lynch Sign, said the move was driven by a desire to consolidate the company's Las Vegas production facility with its sales and marketing offices in nearby Monrovia, Calif., closer to the company's customers.

"I'm a native Californian," Doi said. "I would fly in on a 7 a.m. flight and come back at 4:30. It just got to be really tough."

Schwarzenegger's campaign to create jobs -- which includes billboards in cities around the country, including Las Vegas -- comes after years of complaints from California businesses that the cost of doing business in that state is too high. Schwarzenegger built his election campaign around the need to improve business conditions.

"It was too expensive to do business in California," the governor said in his August appearance in Las Vegas. "That is changing."

A spokeswoman for the California Commission on Jobs and Economic Growth said the total cost of moving Lynch Sign Co. had not been determined this morning. The cost, she said, was paid for entirely by the commission, an organization made up of California business leaders and Schwarzenegger appointees who direct the commission and raise a budget that receives no state funding.

Doi did not indicate that costs had come down in California, but she expressed confidence.

"I think Schwarzenegger is really going to make it better for businesses here," she said. "Under (former Gov.) Gray Davis, this might not have happened."

One factor Doi did point to was rising rent in Las Vegas, which she said was becoming comparable to the company's Southern California location.

Real estate has not been a deterrent to Scott Drake Enterprises Inc., an automotive parts manufacturer which is moving to Henderson from Oxnard, Calif. Joan Capponcelli, general manager for Scott Drake, said the company is building an 86,000-square-foot manufacturing facility here for $5.1 million.

A similar facility in Southern California, she estimated, would cost $6.9 million. Capponcelli also said that workers' compensation and product liability costs will be cut in half by relocating to Nevada.

"We are fully committed to the move," she said.