The economic border war between Nevada and California got almost as hot as the desert heat this fall as California sought to lure companies back to the state and Nevada accelerated efforts aimed at luring more California firms seeking reduced workers' compensation costs.
      The Nevada Commission on Economic Development began an advertising campaign in October to draw more businesses from California. The effort followed a similar campaign by California Gov. Arnold Schwarzenegger with billboards in Las Vegas and other cities. The $650,000 campaign, playing on Schwarzenegger's most famous role, is named "Will Your Business Be Terminated?" and involves wallscapes (large ads painted on the sides of buildings) in San Francisco and Los Angeles and newspaper ads in Sacramento.
      Sponsored by the Nevada Economic Development Partnership, a coalition of five agencies, the ads are aimed at building on the momentum which has seen 38 California companies relocate or expand their businesses in Nevada since the start of 2003.
      Nevada's benefits relative to California keyed a decision for an innovative start-up firm to open in Reno rather than the Bay Area. Darik Volpa, president of UnderstandingSurgery.com, says he was sketching out a business plan for his firm during the height of California's budget woes nearly two years ago.
      "It just did not make sense to locate a business in California with all of those budget problems, the higher tax implications and higher cost of living," Volpa says. A former executive with Stryker Corporation, the largest orthopedic device maker in the world, Volpa discovered there was a large disconnect between surgeons and patients in terms of explaining exactly what happens during surgery.
      "As a result, there's a lot of fear and anxiety," Volpa says. "A good surgeon isn't necessarily a good communicator."
      Seeing this opportunity to improve communication, Volpa's company developed online animation that demonstrates exactly what takes place during various forms of orthopedic surgery. The animation explains specific surgeries in small, digestible steps. Surgeons and medical device manufacturers are the company's markets.
      Volpa says orthopedic surgery is just the first phase. Next will come plastic surgery, and he eventually plans to expand in all types of surgery. The company will move into a new office building by the end of the year, and Volpa says he's pleased with what Reno has to offer.
      "There's no state income tax, there's a great university here and a great airport and wonderful access to Lake Tahoe," Volpa says. "The talent pool is great here. It made sense for us to start the business here."
      Pacific Coast Flange is another California company moving east to Nevada. The West Coast's largest importer and manufacturer says it is saving more than 300 percent on its workers' compensation rates by moving its manufacturing operation from Ukiah, Calif., to Moundhouse, Nev. The company's monthly workers' compensation payments increased from $6,500 to more than $30,000 when the company was reclassified in June 2003.
      Pacific Coast Flange also says moving to the Silver State will save it about 50 percent in monthly utility costs and will improve customer shipments to certain cities, including Denver, by one day.
      PC-Doctor, a provider of PC hardware diagnostic software and manufacturing tools to PC manufacturers, is another California firm eschewing the Golden State. PC-Doctor officials cited Nevada's "business friendly" environment in moving its corporate headquarters from Emeryville, Calif., to Reno.