Las Vegas: it's no mirage.

Las Vegas is growing up and coming of age. Once the playground of the rich- and wanna-be rich-and-famous, and a perennially popular tourist destination for more than 30 years, the Las Vegas of the 1990s has become a Mecca for entrepreneurs, job-seekers, families, refugees from high taxes, and those in search of a better lifestyle overall. Yes, Las Vegas, America's fastest growing city, is the new promised land of economic hope and opportunity, and experts contend that this is a trend, not just a fad.

Local estimates indicate that an average of 3,000 people per month are moving to Las Vegas and, according to the U.S. Census Bureau, Nevada's population is growing faster than any other state in the nation. The report showed the "Silver State" grew by 3.9 percent while California grew by only 1 percent. These figures are in stark contrast to the 1980 census figures which revealed that California grew twice as fast as the nation during that decade. "A few years ago the word was out that California provided abundant employment opportunities and so the rush was on," noted Dennis Stein, president of Nevada Development Authority. "Today, that's no longer the case. Nevada has replaced California in that role and people are coming to the Silver State seeking jobs. That's why we see such a dramatic shift in the population statistics for both states."

In fact, recent reports point to the migration of Southern Californians as having a dramatic impact on the region's growth. Consider these staggering statistics. Ex-Californians have purchased 25 percent of all homes sold in Southern Nevada in the last two years and 41 percent of the new drivers registered in Clark County last year were from California.

What's causing this flight from California? While some attribute the cause to the forces of Mother Nature gone haywire, the real reasons are far more basic. Las Vegas' pro-business climate, favorable tax structure, educated workforce, and plentiful supply of housing from affordable single-family homes to custom mansions are proving to be a powerful magnet for businesses looking to relocate and improve bottom-line performance.

NO RECESSION HERE

While California is still reeling from the recession, Nevada continues to post healthy economic gains. According to statistics cited by the Nevada Development Authority, a Federal Reserve Bank of San Francisco analysis of nine western states predicts economic growth in Nevada this year to surpass 1993.

The analysis reports that employment expanded at an annual rate of 17.8 percent between September and October 1993. The increase was led by a 32.6 percent growth rate in construction jobs.

A salary survey of 156 companies by The Eastridge Group, Las Vegas' largest independent temporary and full-time staffing firm, indicated that salaries for most positions were up over last year's report. Reflecting national hiring trends, the greatest increases were in human resources, information systems, and construction. The construction industry led the survey with 44 of the 156 companies participating. "Given the tremendous demand for new homes, it's not surprising that salaries in construction were among the highest in our survey," explained Bob Svet, president of The Eastridge Group. Salaries ranged from an average of $3,339 per month for a foreman/forewoman to $5,370 per month for a general superintendent.

OFFICE AND INDUSTRIAL MARKET

While the Nevada home-building industry is enjoying a boom of historic proportions, commercial development activity is much slower. Charlie McPhee, vice president of commercial marketing with Las Vegas-based Summa Corp., expects commercial development to remain conservative in the near-term.

"Although our vacancy rates for industrial properties is under 4 percent and single digit for office, speculative development is likely to be limited due to strict underwriting requirements that, consistent with national requirements, mandate a minimum equity contribution of 40 percent. And while we're seeing an increase in build-to-suit activity as a result of these restrictions, 40 percent equity is still 40 percent equity."

With approximately 27 million square feet of industrial space and 7.5 million square feet of office space, the Southern Nevada market is relatively small in relation to its population. The limited market size partially results from many hotels and casinos keeping office and other facilities on site. Moreover, Southern Nevada was not over built during the 1980s, like most American cities. The financial hurdles for speculative building are likely to keep the market supply in relative balance with demand.

Summa Corp., the largest landowner in Southern Nevada, with nearly 25,000 acres of commercial, industrial and residential developments, currently has four major multi-phase projects under way.

At Hughes Center, a "Class A" office environment featuring First Interstate Tower, considered the premiere office building in Las Vegas, Summa Corp. has broken ground on a speculative 60,000-square-foot building. In Summerlin, a 22,000-acre master planned community which will house 150,000 residents at full buildout, all completed office space is leased. A new 127,000-square-foot built-to-suit facility in The Crossings Business Center, a 95-acre business park within Summerlin, is under construction for Salinas-based Household Credit Services, Inc. Across town, Summa is constructing approximately 200,000 square feet of industrial space at its highly regarded Hughes Airport Center. In the Hughes Cheyenne Center, another industrial complex, Summa's current plans are only to build for specific demand.

Other commercial developers in Southern Nevada are following a similar strategy. Given the low vacancy rates and the cautious approach of the development community, companies considering relocating to Southern Nevada or a major expansion of an existing facility are advised to plan ahead. The good news here is that local government is pro-business and is eager to assist in expediting necessary approvals for commercial and industrial projects.

NATIONAL CORPORATIONS EXPANDING

Demand for office and industrial properties is coming from local companies and national satellites. National corporations with significant operations in Southern Nevada include: Ocean Spray, Montgomery Ward Credit Corp., Service Merchandise, Bally Gaming, Inc., Levi Strauss, Kidd & Company, Inc., Lockheed Engineering & Sciences Company, Merillat, Big O Tires, Citibank Nevada, Ethel M Chocolates, L'eggs Products, Lecthers, Inc., T.J. Maxx, Mactac, and Household Credit Services, Inc. Household currently has 250 employees in Las Vegas. Once the Summerlin facility is completed, they expect to bring 1,400 new jobs to the area.

A growing number of Southern California firms have been relocating to Las Vegas. Executives find that they can maintain their ties and business relationships in Southern California while reducing overhead and improving profits. It is estimated that employment from these relocations alone will reach approximately 1,500 jobs per year. This does not include the indirect jobs created by the supply needs of the companies as well as the secondary jobs needed for the increased spending of workers.

PRO-BUSINESS CLIMATE

"Companies looking to improve bottom-line performance are taking a closer look at Southern Nevada," explains Richard A. Carlson, president and CEO of Nevada State Bank. "Nevada is a profitable place to do business for one very important reason -- we offer a business friendly climate. In fact, a major percentage of our new business stems from companies that are new to this area."

Carlson cited a number of factors which improve a businesses overall performance including: no corporate income tax, no local earnings tax, no admissions tax, no inventory tax, no unitary tax, no capital stock tax, no chain store tax, no franchise tax, no inheritance estate and/or gift tax, and no personal income tax. As further incentives, Nevada offers low workers' compensation and unemployment insurance rates and sales/use tax on new equipment is deferred/pro rated up to 60 months. "All of this on top of a strategic location which is central to Salt Lake City, Denver, Phoenix and, of course, Northern and Southern California."

A study commissioned by the Nevada Development Authority indicates that these factors clearly have an impact on the all-important bottom-line. According to the report, a typical customer facility housing 750 employees could save in annual operating costs anywhere from $2 million for an Oakland-based user to $5.8 million for a Los Angeles-based user.

"Plenty of land, plenty of labor -- a dynamite place to start a business," was the description of Las Vegas in Inc. Magazine's feature "Places in America to Own a Business." For the second year in a row, business incorporations in Nevada surpassed the national average with a record number of new companies, 17,700, incorporating in 1993, up 22.2 percent from 1992.

QUALITY OF LIFE

In addition to a pro-business philosophy that is designed to help businesses succeed, Las Vegas offers a nurturing, family-oriented environment that is luring people from all over the country. Unknown to many whose only experience with Las Vegas is the area known as The Strip, Southern Nevada is home to a nationally acclaimed ballet company, opera, symphony, theatre and dance troupes, museums, art galleries, and world-class sporting events. There is a wide variety of recreational amenities, too, including 53 public parks, 20 public swimming pools, and 21 public and private golf courses with 11 planned or under construction.

Education is an important priority in Clark County, the fastest growing school district in the nation. In the last three years alone, 41 new schools have been opened to accommodate an average annual growth rate of just under six percent. High school students consistently score above the national average on SAT/ACT tests. The University of Nevada, Las Vegas, in recognition of its emergence as a major institution for higher learning, was rated the number one "up and coming" university in the West by U.S. News & World Report.

Las Vegas isn't gambling its future. City, county, state and federal officials, in a spirit of cooperation not often seen in politics, have spent many years planning to make sure the infrastructure is in place to support this growth and to be able to continue to offer a favorable business climate.

AS LAS VEGAS GROWS, SO DO SALARIES

As further evidence of the increased demand and the willingness of employers to pay for top notch employees, our sixth annual Eastridge Group Las Vegas Salary Survey revealed that salaries for most positions were up over last year's report. Our survey of 156 companies representing 15,580 employees indicated that, reflecting national hiring trends, the greatest increases were in human resources, information systems, and construction. The results are not surprising in light of the fact that

Las Vegas is enjoying a period of unprecedented and seemingly unbridled growth. Ranked the fastest growing city in the country, it is growing by an average of 3,000 people per month, according to local estimates. Corporations and businesses are expanding and relocating and home builders are struggling to keep up with the demand for housing.

The construction industry led the survey with 44 of the 156 companies participating. Given the tremendous demand for new homes, it's not surprising that salaries in construction were among the highest in our survey.

Senior managers/executives earned the largest salary increases. For example, the average monthly salary for a Human Resources Manager was $4,033 up from $3,340 in the 1992-1993 report. Similarly, the average monthly salary for a Director of Information Systems was $5,236, nearly $1,000 more than last year's $4,217. Salaries for data processing managers jumped from $3,641 to $4,129.

The construction industry continued to post significant increases as home builders race to maintain their stock of affordable housing. In fact, 44 of the 156 companies participating or 28 percent were involved in this fast-growing industry.

Other high-paying jobs were in finance and accounting, human resources, and technical support positions such as quality control and production managers.

Traditional office support positions -- clerical, secretarial, receptionist, messenger -- reported steady gains from last year. Within this classification, office managers, executive assistants, legal secretaries and word processing operators earned the most with average monthly salaries ranging from a low of $2,058 for word processors to a high of $2,529 for office managers.

Bob Svet is president of The Eastridge Group, the largest independent temporary and full-time staffing firm in Las Vegas.

John J. Knott II, associate director with Cushman & Wakefield California, is relocating to Las Vegas where he will be president and CEO of Sullivan & Knott, Inc., a business and investment real estate firm.