COLUMN: What's bad for California, good for Nevada

It made me sit up and take notice.

Charles Blenkhorn of The Howard Hughes Corp. said the state of the California economy has businesses there screaming to their commercial brokers, "Get me out of California."

Apparently, that state is so far off its budget that proposed tax hikes and other draconian moves have businesses looking far afield.

That good news for the Nevada economy was delivered at the end of a seminar presented May 16 as part of the CB Richard Ellis Market Watch 2002 at the MGM Grand.

It takes a lot to get me to a meeting at 7:30 a.m., but I knew it would be worth it because the CB folks are on top of what's happening in the commercial arena.

The opening session was pleasant with CB chief John Knott welcoming participants and giving an overview of the commercial market: improving. There were some problems going into late 2001, although Knott said it was a great year overall and the second best commercial real estate year after the record 2000.

Knott pointed out that the third and fourth quarters of 2001 were soft, as was first-quarter 2002. However, business is almost back to what it was before Sept. 11 and the recession hit Las Vegas.

Interestingly, Knott said Las Vegas no longer seems to be recession-proof as has been the case in the past. However, it took the recession longer to hit here and the recovery seemed to start before the rest of the country.

Back to Blenkhorn, who sat on an office market panel with Mark Bouchard of Thomas & Mack Development and Greg Jones of American Nevada Corp.

These guys have their fingers on the pulse of the local office market and predict an upturn. They admitted that things were tough for a while, but good planning and the ability to stick out a few soft months worked miracles for their respective companies.

Blenkhorn emphasized that Hughes is in it for the long haul, and their properties take time to develop. We all know Hughes has deep pockets and is land rich, so the corporation can afford to take the long view.

Thomas & Mack has been building in Las Vegas for a long time, and knows which end of the big box is up. Bouchard said they take an overall view of the market and that a lot of research goes into what the company will build where. Right now, it seems as though the class-B office space, some with warehouse back, seems to be the depth of the market.

Bouchard believes there's plenty of land for office growth. Plenty of infill is being used and airport zoned areas, where housing can't be built, are ideal for office space.

Jones said American Nevada is concentrating its efforts mostly in the Green Valley Ranch-Interstate 215 area. Lots of class-A buildings are going up there, and he sees more class-B and perhaps flex projects in the future.

The question was asked whether Messrs Blenkhorn, Bouchard and Jones could predict what would be the next flood of businesses to the Las Vegas area to replace the influx of credit card companies and telecommunicators that filled our coffers recently.

That was when Blenkhorn piped up with his California statement. He predicted that if our tax structure and governmental practices in Nevada stay benign, businesses will flock to Nevada with Los Angeles in their rear-view mirrors.

Although Gov. Kenny Guinn has talked about hiking some taxes to try to balance the budget, whatever is done in Nevada won't begin to approximate the damage being contemplated in California.

Once again, we can sit back and be smug.

Carmel Hopkins, real estate product manager for the Las Vegas Review-Journal and Las Vegas Sun, can be reached at 380-4574. Her e-mail address is Carmel_Hopkins@ reviewjournal.com. Snail mail is P.O. Box 70, Las Vegas, NV 89125.

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