Panel touts savings from relocation to Nevada

Kevin Rademacher

Friday, April 22, 2005 | 10:49 a.m.

Despite the rising housing costs in Las Vegas, entrepreneurs and major employers continue to find value in relocating to Southern Nevada.

A panel of business executives and recent transplants told a crowd at the Vegas Venture Forum on Thursday that Southern Nevada makes a strong candidate for relocation for a number of reasons including utility costs, cost of living, workers' compensation costs and state assistance.

Las Vegas is especially competitive when compared to California, said Jerry Elerick, a senior manager for San Diego-based communications giant Qualcomm. That company opened a satellite tracking center in Las Vegas about a year ago.

The original plan was for a small local presence with just a handful of local employees. Once company leaders recognized the potential savings to be gained by growing here instead of coastal California, expansion plans began.

Qualcomm is now wrapping up the purchase of 35 acres in North Las Vegas. The first phase of its local growth will include the development of about 25 acres with several buildings totalling about 300,000 square feet. Local employment could reach 200 employees.

Joining the satellite unit will be a corporate data center and a new venture -- MediaFlo -- which develops video services for cell phones and other hand-held devices, Elerick said.

The construction in Las Vegas is expected to cost about $11 per square foot. In San Diego, Elerick said, the same project would carry a price tag of $40 a square foot.

Additionally, Qualcomm expects to save about $6 million a year in power costs once the local operation reaches full capacity.

Elerick, a long-time San Diego resident, said he had little trouble moving to Las Vegas, based on issues such as housing costs and shorter commutes.

"They didn't have much trouble getting me to move from California," he said, adding that he has a stack of resumes from San Diego Qualcomm employees willing to relocate.

Also on the panel was Brian Huse, one of the founders of Arroweye Solutions. His company, which produces personalized greeting cards for online retailers, moved to Las Vegas from Santa Barbara, Calif.

He said sales tax in California alone was cutting into profit, and the final candidates for relocation came down to Las Vegas and Columbus, Ohio. He said the tax abatement and deferral plan the company received from the state Commission on Economic Development was a key point in the move. He also said the quality of companies being recruited into Nevada was encouraging.

"(Columbus) was not as selective about the types of companies as (Nevada is)," he said. "They will bring anybody in."

The story was much the same for Bruce Cowan, who moved Acclaim Electronics to Las Vegas from San Diego.

"I pretty much could have been located anywhere," said Cowan, whose company distributes electronic components. He said the Nevada tax structure is extremely positive for manufacturing companies, pointing to a 40 percent annual saving by making the move.

"It's an excellent opportunity to make more money and invest in your company," Cowan said.

The Vegas Venture Forum, in its second year, brings in a series of young companies seeking investment capital and potential investors together. Lead sponsors include the Technology Business Alliance of Nevada, Henderson Economic Development Division, the Nevada Development Authority and the Las Vegas Chamber of Commerce.