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Chris Jones

Schwarzenegger to Urge Companies to Return to California

7 June 2004

When the Terminator said "I'll be back" in the movie, you just knew he meant it.

Now the question is whether the Governator, or in this case California Gov. Arnold Schwarzenegger, can convince companies to come back to the Golden State.

Schwarzenegger will hold a press conference in Las Vegas next week, probably Monday, urging companies and executives who have moved out of California because of the state's high taxes and workers compensation rates and other problems to do just that.

California officials are also buying a billboard on the south end of the Strip calling on former businesses and executives to move back home, industry sources said Friday.

Schwarzenegger's pitch in Las Vegas and the billboard are part of an eight-state campaign to boost business on the Coast.

But marketing executives in Las Vegas who asked not to be named said Schwarzenegger's campaign smacks of political public relations, and is like closing the barn door after the horses, in this case businesses, have escaped.

"And the arrogance, California's governor second-guessing businessmen who have already voted with their feet (by moving to Nevada)," one local executive said.

Greg Bortolin, a spokesman for Nevada Gov. Kenny Guinn, said Schwarzenegger called Guinn Thursday to inform him about California's plans here.

"I'm sure if Governor Guinn was in the same position, he'd probably be doing the same thing," Bortolin said. "What Governor Schwarzenegger is doing makes a lot of sense. A lot of businesses have moved to Nevada from both ends of California."

Schwarzenegger's representatives on Friday declined comment on the governor's proposed Las Vegas appearance.

Somer Hollingsworth, Nevada Development Authority's president, said almost three dozen California companies have moved to Southern Nevada in the past two years. Those transplants have created nearly 1,500 new jobs in Southern Nevada and an employee economic impact of nearly $200 million, he said.

Bortolin said Guinn plans no response to Schwarzenegger's pitch and that he believes the facts will speak for themselves.

"At the end of the day, people will find Nevada is a much better place to do business," he said.

Las Vegas Mayor Oscar Goodman, however, has invited Schwarzenegger to meet in his office at 3:30 Monday afternoon to explain there is no comparison between the two states.

Goodman said businesses have moved to Nevada because the state has a great tax structure and a great quality of life and because officials here bend over backwards to make sure locally-based companies succeed.

"I'll be nice to the gentleman, but I'll send him on his way," Goodman said.

Hollingsworth said Schwarzenegger's swing through Las Vegas proves the nearly $600,000 pro-Nevada ad campaign his agency has been running is effective, and said he plans to keep up the pace of advertising.

"Our marketing program has reached its pinnacle when the governor of California is coming here for one purpose: to let the companies that have moved from California know that he wants them back," Hollingsworth said of Schwarzenegger. "He knows that Las Vegas is taking customers away from him, and it doesn't get much better than that" as far as a successful media program.

The authority in August launched an aggressive advertising campaign warning California business owners they could ultimately be shut down by that state's higher workers' compensation insurance costs, rising utility rates and liberal family medical leave laws, among other factors.

The spots refer to Nevada as a "survival zone" and urged readers to "look hard at doing business in Nevada or face the possibility of not doing business at all."

In addition to paid spots, Hollingsworth said media outlets such as USA Today and The Wall Street Journal have picked up on the ads' message, further stretching Nevada's media reach.

The authority plans to continue placing ads in most major California newspapers with the exception of the Los Angeles Times, he added.

The Nevada Development Authority is a quasipublic agency that gets 20 percent of its funding from the state and the bulk of its funding from businesses in Las Vegas.