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Hubble Smith

Schwarzenegger Comes Calling

5 August 2004

California Gov. Arnold Schwarzenegger spread his message Wednesday about the revival of his state's economy, but the crowd that lined the runway and second floor at Fashion Show mall seemed more interested in the show than the substance.

"What a great comeback story for California," said Schwarzenegger, emerging from a cloud of smoke as music thundered and hundreds of tourists and mall shoppers cheered.

"We're going to make sure it is the job-growing machine it once was. I believe in California. We want to make sure everybody knows how great we are. All over the world, we're spreading the word that California is the place to do business," he said in a brief appearance.

A new billboard that will anchor the campaign was projected on video screens, featuring the governor and the slogan, "Arnold says California wants your business."

He said California has created 45,000 new jobs in the past couple of months and begged companies that have exited California for Nevada to return.

"Let me tell you, I have a moving truck waiting outside so any business who wants to move to California, I will help you move. I'll drive the truck. I'm a hands-on governor. That's right," Schwarzenegger said.

He later took the driver's seat of an 18-wheel truck with the billboard painted on its side for a ride down the Strip. He promised to use the vehicle to relocate companies to the state and parked it in front of the "Welcome to Las Vegas" sign.

But Suzette LaGrange, an industrial broker for CB Richard Ellis who was at the mall, said moving vans are already rolling down Interstate 15 bringing more California businesses to Nevada.

She called Schwarzenegger's speech purely promotional.

"He didn't touch on any of the issues, he didn't talk about any of the changes that are needed in California," LaGrange said.

Schwarzenegger boasted of beautiful beaches, mountains and deserts California has to offer, but that does little good for businesses, she said.

Nearly 40 percent of California companies plan to move jobs out of state, according to the California Competitiveness Project, a study released earlier this year for the California Business Roundtable.

The analysis, conducted by global business consulting firm Bain & Co., also found that a startling 100 percent of senior executives interviewed view the business climate in California unfavorably.

That's no surprise to Bruce Cowan, who moved his Acclaim Electronics company to Las Vegas from San Diego about 10 months ago.

"Nobody with a brain cell would move back to California," he said. "What dominates California is public employee unions and lawyers. A few years ago they passed 10,000 new laws, fees, tax increases and regulations. What that does, is we're able to save 40 percent by moving here.

"Workers' comp dropped, no state income tax, no corporate tax, no inventory tax here. Southern California is so busy passing all this legislation that is anti-business and they've been doing it for a long time."

Cowan said he voted for Schwarzenegger. However, he doesn't think there's anything the governor can do to reverse California's misfortunes.

"The state's Assembly and Senate have been controlled by a socialist mind-set for years. All Schwarzenegger can say is, `No, no, no.' "

Somer Hollingsworth, president and chief executive officer of the Nevada Development Authority, said he thought Schwarzenegger had a good presentation but wishes he could follow him around on his tour and hand out business cards.

"His coming to Nevada really validates our marketing program," Hollingsworth said of the NDA's campaign to recruit California companies. "We were thrilled. We don't have the kind of money to buy this kind of publicity for us."

Oscar Goodman said Schwarzenegger didn't follow "protocol" by informing the Las Vegas mayor of his plans and that the visit shows the strength of Nevada's business community.

"He's got a loser. I've got a winner. He came up and had a show and the van went home empty," the mayor said afterward at his City Hall office. "This is a compliment to us. He's desperate. There's nothing he can do to get these companies back. ... Once you taste Las Vegas, it's like the fruit of the Garden of Eden. It has an effect so you do not live the way you did before."

Sergio Bortolamedi, who moved to Las Vegas from Southern California in 1996, said he's not going back.

"You see the property prices; they scared the people in California," he said. "What happened, he feels like he lost a lot of people. California was in bad shape. He needs something to give people more confidence in going back to California."

Cowan of Acclaim Electronics, a company with 25 employees that stocks and distributes electronic components and computer products, said businesses are not going back once they've invested here and see the benefits.

"Vegas, interesting enough, has a very intelligent work force," he said. "We get very motivated people coming from other areas. I've been able to get much more sophisticated, literate people than I did in Carlsbad."

Review-Journal writer Michael Squires and The Associated Press contributed to this report.