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The California Dream in Nevada

Episode Summary

Californians have long moved to Nevada in search of new business and personal opportunities. But a massive business park near Reno is drawing in businesses like never before.

Episode Notes

Californians have long moved to Nevada in search of new business and personal opportunities. But a massive business park near Reno is drawing in businesses like never before. Some long-timers aren’t happy.

Today, we visit the Tahoe-Reno Industrial Center to learn more. Read the full transcript here.

Host: Gustavo Arellano

Guests: L.A. Times national enterprise reporter Noah Bierman

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Episode Transcription

Gustavo Arellano: Year after year, a steady stream of Californians have moved away looking for a cheaper place to live, as well as to do business. And lately they haven't needed to go all that far.

Noah Bierman and Kris Thompson: Is that horses over there? Uh, yes. Yep, yep. Looks like, I mean, I can sort of see in the distance. Yep.

Gustavo Arellano: Just hours away from Silicon Valley, California companies and their employees are planting their flags into the northern Nevada desert, where wild horses roam free.

Noah Bierman: Yeah, I don't know what they do when it's raining. Do they act differently? 

Kris Thompson: They love it because sometimes they have a hard time getting the water.

Gustavo Arellano: But in recent years, what was once a stream of people has turned into a river and the locals, they're not happy about it. I'm Gustavo Arellano. You're listening to “The Times Essential News from the L.A. Times.” It's Friday, March 3rd, 2023. Today, how the pandemic put the California exodus to Nevada on overdrive. 

Gustavo Arellano: Here to talk to me about all this is my L.A. Times colleague, enterprise reporter Noah Bierman. Noah, welcome to “The Times.”

Noah Bierman: Hi, Gustavo.

Gustavo Arellano: OK, so people have been whining about Californians invading other states, geez, for decades now. I mean, just ask anyone from Colorado. So when it comes to Nevada, what's different this time? 

Noah Bierman: Well, in some ways it is a continuation for sure, but it's supercharged 

So you already had all these people coming in because tech companies were coming in and outside of the region. But then you got this second wave of people during the pandemic. And these were people who wanted to be really close to Silicon Valley, easy driving and flying distance. But they wanted to get away, and their housing prices were much cheaper here, so they could, and they were only a few hours away and they could go to the ski slopes in Lake Tahoe. And in their calculation they were having it all. 

Noah Bierman: It all amounted to this explosion of new people coming into Nevada, and California is by far the biggest donor state. Eighty-five thousand people traded California driver's licenses for Nevada licenses in 2021 and 2022 according to the DMV statistics there

Gustavo Arellano: Damn

Noah Bierman: It’s also being borne out in census and in business surveys about businesses moving, so you're seeing it all over the place.

Gustavo Arellano: Northern Nevada, though, because most of the people that I know that went to Nevada, they're like in Las Vegas, Henderson, Southern Nevada. Like my cousin Raymond. (What's up, Raymond?) How does northern Nevada look like these days? Like, when I think of it, I think dude ranches, mustangs, and “Reno 911,” of course, so basically hilarity and emptiness.

Noah Bierman: Hehe, well, you know, you are seeing a lot of desert when you're out there.

Noah Bierman: I'm driving toward USA Parkway. All along the way it's just basically high desert mountains sprinkled with snow, power lines … 

Noah Bierman: You start seeing all these signs for wild horses, a few billboard stuff you'd expect.

Noah Bierman: … a sign saying to be aware of, um, mustangs. So we'll see if we see ‘em

Noah Bierman: And not much, but power lines until all of a sudden you see this wide expanse of construction, warehouses, things like that.

Noah Bierman: All right. As soon as you turn off USA Parkway, on your left is some kind of factory with smokestacks and a big sign that says “Tahoe-Reno Industrial Center: World's largest” and it's in a sort of a western style.

Noah Bierman: There's this thing called the Tahoe-Reno Industrial Center, and it's just outside of Reno — very close to the airport, very close to the city -— and it's been around since the late 1990s. It was started by these two guys, one named Lance Gilman, another called Roger Norman, and they bought this huge, huge, huge, and can I say huge again, chunk of land in the desert hills. The thing is 166 miles. It's the same size as a major American city. New Orleans and Denver are pretty comparable, just to give you an idea. And most of the time it just remained, you know, mostly vacant land. There wasn't much going on. But in 2014, they convinced Tesla to build this giant thing called a Gigafactory there to basically build the battery pack for Tesla automobiles. And that changed everything.

Kris Thompson: There's two things that impress people here. One is the Gigafactory, the others are wild horses.

Noah Bierman: So, there's a guy who is the project manager of the park named Kris Thompson, something like a city manager, if you will. He showed me around. He, like almost everybody you meet in northern Nevada, is from California originally. He moved a few years ago from San Diego.

Kris Thompson: I had the, uh, you know, kind of a California burnout phase, um.

Noah Bierman: And he put me into his Chevy Suburban after showing me this giant map that sort of mapped out where all the different places were. But, you know, you sort of have to see it to believe it, so he just was my tour guide taking me around …

Kris Thompson:  Here's some example of recent construction going on here. 

Noah Bierman: Yeah. And what, is that a water, uh, tower there.

Kris Thompson: That, it, it, it is, 

Noah Bierman: … and he says this place is the biggest industrial park in the world. There are some different rankings depending on how you look at it, but at the very least, it's close … 

Kris Thompson: This is our own rail. We built this. This is our own internal rail line for the park.

Noah Bierman: … and he basically was pointing things out everywhere. It was almost hard to keep track of because, you know, here on your left they're knocking down and flattening some rock here to build a giant place for a company you've never heard of. Over there, they're building a solar field.

Kris Thompson: That's Apple over there. That's a Apple solar field. It’s 150 acres of solar panels and they get 50 megawatts. 

Noah Bierman: I can't see it.

Kris Thompson:  It's all that gray stuff on the side of  that.

Noah Bierman: Google has something going on. Walmart has a distribution center. 

Kris Thompson: So that's Tesla and Panasonic over there. They don't allow the public in, in the front gate, but this is a good kind of, uh, overlook. 

Noah Bierman: Everything is in this massive scale of factory and warehouse, all kinds of things. go on there.

Kris Thompson: And what you're seeing is only about 20% of the park that's buildable. 

Noah Bierman: So you're not, you're not close to using all the land here yet? 

Kris Thompson:  Not close. That's right. 

Gustavo Arellano: So there seems to be already a lot of businesses there, but you mentioned there's still a lot of construction. So how many people actually work at this Tahoe-Reno Industrial Center?

Noah Bierman: The number they gave me is 25,000 workers. and it seems to only be growing. Uh, Tesla for example, has announced they're going to start building Tesla trucks there in another massive expansion of their own property

Kris Thompson: The Tesla semi, as we understand it and what's been reported in the public, is gonna be built in one of those two big boxes on the right. Those are all Tesla trucks over there…

Noah Bierman: Plus there's just all kinds of sites for yet-to-come projects.

Gustavo Arellano: Damn, 25,000 people at this industrial park basically. Are there services out there for them, like restaurants, I don't know, bars, clubs?

Noah Bierman: Well, Kris was complaining they don't even have a Starbucks yet. 

Kris Thompson: We have a lot of ground to make up on the retail sector because we've grown so fast.

Noah Bierman: Where do you get your coffee? 

Kris Thompson:  Uh, usually I bring it with me, but there's some, there's like a Safeway and a Port of Subs down here. We'll go buy it real quick.

Noah Bierman: They have like a truck stop that has a Taco Bell and a Burger King and a Port of Subs. They're building a hotel. 

Kris Thompson: We've got Marriott Courtyard is building up here on the corner, but this is our retail sector as it is right now.

Noah Bierman: They've got an urgent care and a dentist, but it doesn't feel like a place you would live. In fact, there is no place there to live. There's no apartments or houses or anything that could keep you there more than a couple nights at a hotel.

Gustavo Arellano: Hmm. So what's bringing out all these companies to this industrial park in the Nevada desert

Noah Bierman: Let's see: tons of land, really easy approvals and massive, massive subsidies. Tesla's initial factory got more than a billion dollars in state subsidies, and basically they're paying very little in taxes for this. And even some of the smaller companies that are moving there are getting some of these tax breaks, not at the same scale as Tesla. But they're not the same scale of companies, so it means a lot if you're getting tens of millions of dollars in tax breaks and other incentives.

And the permitting and approval process is nothing like it is in California. You know, where it's known to drag on for months or even years for certain kinds of approvals. They promise they can get things done incredibly fast by the standards of any American city or state.

Gustavo Arellano: Coming up after the break, the man helping to build Nevada's industrial paradise in the desert. 

Gustavo Arellano: Noah, so this Reno-adjacent industrial park, it all sounds like a wild west boomtown to me. So where did that culture come from?

Noah Bierman: Well, a lot of that really stems from the founder, Lance Gillman. He's a real character. He wears a cowboy hat and a, he's a big guy and he talks big and bluntly and very charming. He's definitely. a character out of the West that you would expect. In fact, he runs the oldest brothel in the state, the Mustang Ranch, which is right adjacent to the property of the project itself.

Noah Bierman: if I want to go to … 

Kris Thompson: Mustang Ranch for some lunch? 

Noah Bierman: Yeah. 

Kris Thompson: Just follow me. Just go and it is, I promise there's no …

Noah Bierman: It's G-rated? 

Kris Thompson: Yeah.

Noah Bierman: So Kris actually took me to the Mustang Ranch to meet with Lance. It's a pretty famous place. There's actually a movie about it called “Love Ranch” starring Helen Mirren. And Chris, when I said I really wanted to meet Lance, said, well, he lives there. Why don't we just go over and have lunch?

Kris Thompson: And the food here is good.

Noah Bierman: OK, all right. 

Kris Thompson: Just follow me. Let me call ’em, let 'em know we're coming. 

Noah Bierman: OK, all right. 

Noah Bierman: And so we drove through this park, through the winding roads, and right when you get outside the borders of the park, there you are in this Old West brothel.

Lance Gilman: Hey, how are you? 

Noah Bierman: Noah Bierman, good to meet you. 

Lance Gilman:  Pleasure. Very nice meeting you. 

Server: We got you set up over here right in the middle. 

Lance Gilman:  I know where you put me. You've been putting me there for 15 years … 

Noah Bierman: So he's a really good marketer and a land developer and he’s 78. He also moved from San Diego in 1985, so another California refugee.

Lance Gilman: Yeah, I’ve been sitting at this table for a while.

Noah Bierman: Oh, this is your, this is your regular table for business?

Lance Gilman: For some business

Noah Bierman: And he basically found this idea, you know, had this vision that this industrial park had potential to lure businesses there for the reasons I talked about. You know, the vast amount of land, the easy permitting process and eventually the subsidies.

Lance Gilman: So typically a developer wouldn't go out and build in the mountains. But I knew in the late ’90s that Reno was out of land. I remember when I took my partner Roger out there and he said, Gilman, are you sure? And I said, Roger, I'm just as sure as I can be. There are companies that want to be here, and this is the first and only place they can go unless they go clear the hell out in the desert, which is too far.

Noah Bierman: And he's also incredibly powerful. I mean, he is on the county commission for Storey County, and, guess who the main business is in Storey County, his property! So he really has a tremendous amount of clout. Him and his partner were able to get the state to actually pay them back for the work they had done to build this road that runs through the basically an offshoot of the highway and they've also negotiated these incredible subsidies for these companies.

Gustavo Arellano: Wait, an elected official with all these business interests in the county he represents: Isn't that a conflict of interest?

Noah Bierman: Well, he's been facing questions about that for years and he has a ready answer for it about how he recuses himself from certain votes, things like that.

Lance Gilman: So, when I first ran there was suspicion. You know, how are you gonna be, you got this here and you got development and all that, how are we gonna vote for you? How are you gonna do that? I spent a year with a little cart and I knocked on every goddamn door in the county, and I went and sat in their living rooms and I talked to them like you and I are talking, and I said, you know, you, you gimme a shot at this and I'll do my very best to represent you.

Noah Bierman: But the fact remains is that both he and his businesses have done extremely well by both the state and the local officials. And he does have a role in government and he has tons of connections in the state government.

Gustavo Arellano: So what does Lance say about what he's doing for the region then?

Noah Bierman: Well, he has a case to make. Look, this is an area that has been particularly hard hit in prior recessions, in part because they're so dependent on gambling and they're still very dependent on gambling. You know, when you drive a few miles away into Reno, casinos are still the thing, hospitality is still the thing. So the state and the region, they really want to diversify their economy, and, you know, tech is a really good way to diversify your economy. Tech and industrial and all these things. They're bringing in tons of new jobs that aren't as dependent on hospitality.

Lance Gilman:  I think that the future for this little community in northern Nevada is unprecedented in what's going to happen, because a lot of Silicon Valley is coming. And they're already talking and they're already looking, because over here is a great place to live, and it's a great place to do business.

Noah Bierman: And his case is that these people, they want to build this stuff somewhere. Why not make it here?

Lance Gilman: I think we've created here in this little county a blueprint of what success looks like if you believe in…

Gustavo Arellano: It's really interesting to see this new Reno, because I remember growing up in California, billboards and TV commercials used to call it the biggest little city in the world. Now it seems that what Lance and Kris are promoting is something like "Come to Northern Nevada, where regulation is light, taxes are low, there's so much space to grow, and that's all going to mean great things for the surrounding communities." But is that really the case?

Noah Bierman: Well, there's certainly a lot of people who agree with that philosophy. There are also new questions, you know, even from the head of the Chamber of Commerce as to whether this sort of unmitigated growth is the best way to go. Because remember, these companies are coming in, they are providing jobs, but they're not paying many taxes. And with all these new people, are coming huge needs. 

People need places to live. They want schools to send their kids to. They need police and fire, you know, you name it. They need this stuff. And there's not enough to go around. I mean, one of the biggest booming businesses that actually is headquartered in the industrial park is the food bank. They've got 130,000 people a month who are needing their services, which is a record for them.

Gustavo Arellano: Wow.

Noah Bierman: So you can see even within the industrial park itself, sort of the good and the bad of this rapid growth.

Gustavo Arellano: After the break, how the Reno locals are handling all this.

Gustavo Arellano: Noah, you mentioned that the people doing all this investment and development in and around Reno say that it’s going to be a good thing for the city. But you can’t build a whole bunch of businesses and not also do housing, you know? So are homes being built in the area to accommodate all these new people?

Noah Bierman: Yes, there are. But let me just put something in perspective for you. Before Tesla came, the average house price for a home around the Reno area in 2013 was $188,000. By December of last year, it was almost $520,000. So we've seen housing prices go up around the country, obviously, but I don't think I've seen them go up at that rate. And one of the places I went to was a place called Ranchera, a gated community.

Robert Cuillard: The villas, which are right behind us. Uh, those are, um, three-story condos, uh, townhomes. Then there's the section we're in right now; these are all custom homes. So people just buy a lot ….

Noah Bierman: it is the former sort of mansion and property and estate of Bill Harra, the casino magnate. And the CEO of the community, Robert Cuillard, actually showed me around.

So what are the values of these homes? They look pretty nice. 

Robert Cuillard: Yeah, the homes are nice. Um, these are tough to say because they're all new builds.

Noah Bierman: Nice luxury houses with views of the mountains in either direction. A lot of them are over a million dollars. But if you're coming in and you already have a lot of money from selling a home in Northern California, it's not as expensive for you. So you can go to a place like this and you can have access to this nearby ski slopes of Lake Tahoe. You can still get back to the Bay Area pretty easily. But you're not paying as much in housing, and you just have a lot more room to roam.

Robert Cuillard and Noah Bierman Clip: This is what's called the Village. Mm-hmm. So this is all of the retail space for Ranchera. This is called the Village at Ranchera. Is that open yet? Oh yeah. OK. Yeah. And what kind of retail do you have? It's all sorts. There's sports bars, there's, uh, Dolce Vita, which is a spa. Um, there's, uh, swift…

Gustavo Arellano: So it's basically Irvine in the desert.

Noah Bierman: Yeah. And they're very consciously trying to market this to people from California. Robert's also the CEO of a newer development called the Reno Experience District. And this is something where they're trying to create more of a downtown kind of a life. There's gonna be an In-N-Out Burger in the Reno Experience District …

Gustavo Arellano: Overrated.

Noah Bierman: Yeah, I knew you'd say that. But the idea is, you know, the new Reno, really, a lot of it at least, is pretty consciously wanting to cater to people who are coming from California.

Gustavo Arellano: So what does that mean for the people who have lived there for decades, for years? Multigenerational?

Noah Bierman: Yeah. I mean, a lot of them can't afford to rent or buy there. And if they do, they're really scraping by in a lot of cases because as much as the tech industry is coming in, you still have a lot of people who work in restaurants and hotels and those jobs just don't pay as well so they're getting priced out of the market. There's not always out-and-out resentment from the people I talk to, but there's a little frustration that some of these changes are leaving them out and making their lives less affordable. I think there's a recognition from some of the people that overall they do want growth and a more diversified economy. But you'll hear people just talk about this mixed bag.

Gustavo Arellano: Yeah, I can only imagine the struggle some people will face with such quick changes to their hometown. 

Noah Bierman: Yeah, I met one woman named Maria Serfen very early in the morning, about 5:30 a.m., when I was still on East Coast time and wanted to get some breakfast at a Mexican restaurant, and she was working at the same taqueria as her husband in downtown Reno. 

Noah Bierman: How long have you worked here? 

Maria Serfen: Uh, 10 years. 

Noah Bierman: Ten years? 

Maria Serfen: Yeah. 

Noah Bierman: And so, where do you live, in a house, an apartment … ?

Maria Serfen:  I, right now I live in an apartment, which is so expensive. 

Noah Bierman: Do they raise the rent? 

Maria Serfen: Yes. 

Noah Bierman: And she had told me, you know, they just weren't spending money on things like Christmas presents because their rent was so high.

Maria Serfen: Yeah. I have a limit for all of it stuff. I think I only work for rent and just only for little bit stuffs for food and just little bit stuff. 

Noah Bierman: You mean like no luxuries? Like no extra stuff? 

Maria Serfen: Yes. No extra stuff

Gustavo Arellano: Finally, Noah, we've been talking about just the California exodus to Reno and Nevada during this conversation, but to what extent is this a story that's playing out in other parts of the West, and how close is the region to a tipping point?

Noah Bierman: Yeah, you know, we went to Reno to try and illustrate basically a larger point that the whole West is getting transformed by a lot of outmigration from California. And a lot of it is positive, people are very happy with some of the business development they're getting. But there are some real costs, and you're hearing people talk about them more and more. You know, the Utah governor told Californians, stay home. I talk to people in Colorado, which again, has always had a lot of Californians coming in. They've got a lot of housing problems. Californians are contributing to them. you're hearing it in Idaho. You know, a lot of these states in the West, they're seeing a lot of these same issues.

Gustavo Arellano: Noah, thank you so much for this conversation.

Noah Bierman: Thank you. Always a great pleasure to talk. 

Gustavo Arellano: And that’s it for this episode of “The Times: Essential News From the L.A. Times.”

Kasia Broussalian and Helen Li were the jefas on this episode. It was edited by Jazmín  Aguilera and Mike Heflin mixed and mastered it.

Our show is produced by Denise Guerra, Kasia Broussalian, David Toledo and Ashlea Brown. Our editorial assistants are Roberto Reyes and Nicolas Perez. Our fellow is Helen Li. Our engineers are Mario Diaz, Mark Nieto and Mike Heflin. Our executive producers are Jazmín Aguilera, Shani Hilton and Heba Elorbany. And our theme music is by Andrew Eapen. 

I'm Gustavo Arellano. We'll be back Monday with all the news and desmadre. Gracias.