 Good afternoon. My name is Retsu Chiyama. On the last show for the year 2018 for the series, Business in Hawaii. Today though, we're going to talk about business beyond Hawaii, connecting to Hawaii, linking to Hawaii, with a person who's been a host and originating this series, Reg Baker. And he is currently based in Nevada, and we'll get more particulars where he is and what he's doing. And the insights he has for us from that part of the United States, and insights to the tax year that's coming up 2019. And everything that will impact it, let's stop market, politics, but we would get really interesting tidbits and how he sees life from where he is today, comparing and contrasting with business and life in Honolulu, back in the 50th state, for a place that's sometimes called the Ninth Island in Vegas or Clark County. And it's a place that is unbelievably growing. Vegas moved from 741,000 residents in 1990 to over 2.2 million in 2018. So that's double in size. It has 41 million visitors or more, probably that was 2014, for a gross metropolitan product or the economy of Nevada that's contributing to $100 billion annually. So tourism, entertainment, of course, fueled by casinos, all dynamics, and other things like the military, high-tech, construction, real estate, they're all part of the economy in Nevada. Welcome to the show, Reg. Are you there? I am here, and it's great to be back. You look like you're in Hawaii, and I should be on the mainland, because I hear it's kind of cool where you are. And tell us where you are right now. Well, I'm in the Vegas Valley, which is a, for people who are familiar with Vegas, it's surrounded by mountains. And it's like a giant rice ball, if you will, and Vegas, the strip area is at the very bottom. And surrounding the strip are all these little communities, which include Lake Las Vegas, Henderson, Summerland, et cetera. And I'm in the Summerland area, which is the northwest part of Vegas. It's a nice little neighborhood community, bedroom community, some people say. We're probably about 10, 15 minutes from the strip. So you're not in the so-called casino and entertainment or hotel area of Nevada. You're in a very sedate neighborhood of families, or what is the population? Is it families or retired people or active business people or younger people? What's the mix there? All of the above. There's a big community of retired people here because of the tax structure and the weather. We compete with Arizona for that retirement community recognition. But there's also a growing family community. Matter of fact, the majority of the people who live in the Vegas Valley rarely, if ever, go to the strip, just like YPP. There's a lot of people that live around YPP that never really go to YPP. That's true. And very similar to here in the Vegas Valley. The only people who really go to the strip are the people who are visitors or the people who work there. Rarely does anybody else go down there. Now, you talk about the strip and the economy, of course, fueled by casinos and hotels, and there's a figure of 150,000 hotel rooms. And of course, that attracts giant conventions and really fuels the economy. So now you lived in Vegas or Clark County in Nevada before, and now you're back. Are there any changes or are there really dramatic increases in the economy or any changes that you've seen for your now coming back to Nevada? You know, Ray, I've seen a lot of change. I started coming here in the 90s when I bought some property out here for myself and my clients. And I did a lot of traveling back and forth. So I've been here through the first rise in the economy and then the first where the economy broke. And now it's back again. So I've seen the different cycles over the last 20 years. But one thing that is a constant is that it's constantly growing. I mean, the streets are new, the neighborhoods are new, the schools are new. At one point, they were building one school per month just to keep up with the children and they were moving into the valley. Yeah, there's a statistic that I just uncovered. There's 4.9 people moving to Las Vegas every hour, every hour over the last year. So it's an unbelievable growth in the population and you're right. And you contrast this to recent news that you've been also highlighting in your Facebook and for your clients and people, is that Hawaii is experiencing a population decline in for many years. This is unbelievable because we always thought that the population economy will grow. But we see it kind of topping off and it's primarily due to a lot of young people migrating or going to the mainland for better economic opportunities. Is that true? Yeah, that's what we're seeing. And there's two types of people, I believe, that are moving to Vegas from Hawaii. One are the older retired couples. There's a lot of people that I know that's been clients over the years and they've all retired here. Primarily, hypothetically, you've got a house, you sell it for a million dollars and Hawaii, you come over here, you can buy three or four homes for a million dollars and you rent three of them out. That's a nice retirement to have. And that's what a lot of people are doing. But you're also seeing a lot of the younger generation coming over because of the opportunities here. The high tech Google is opening up a data center. There are a number of very large international companies that are coming here opening up data centers. All the casinos have their operations here, there's banks that are moving in. It isn't becoming somewhat of a high tech type of environment. If you walk through any casino, you're going to see a lot of technology in those casinos and in those resort areas. All of that is supported by the industry surrounding the biggest and the biggest value, you know, the education system is getting better. And what's also important is that for companies that are doing business here, it's very simple to expand into the Phoenix area or into the LA area or maybe the San Francisco area. It's just a couple hour drive and you're there. You know, it's much easier to grow a company and make it bigger, generate higher levels of sales and the cost structure is significantly less. You know, Hawaii is a great place. I love Hawaii. I'm always going to be coming back to Hawaii, but there are limitations. There's geography limitations. There's resource limitations. You know, it's just Hawaii is just not able to provide those types of opportunities because of inherently it's a small state, it's a city state, and there's just not that much potential there to grow companies into that second or third level, whereas we don't have that limitation here in Vegas. What's the number now? We've been talking about numbers. Is it 80 to 90,000 former Hawaii residents living in Clark County? Will that be the right number? That's the number that is always debated. When I was on the board of the directors for the Las Vegas Chamber of Commerce, we used to get reports from different economists and from the DMV. And this was about 10 years ago, we got a report that over the years, there had been over 80,000 Hawaiian driver's licenses turned into the DMV. And so they were using that as a basis to say that there's about 80,000 or more. Now, that doesn't count the children that don't have licenses. Right. And that doesn't count the people who move in from, say, California or Washington. So, you know, which is a stepping stone for a lot of people to move. They go to San Diego or they go to Washington, and then they come to Nevada. You know, and so we're projecting somewhere in that 80 to 100,000 range. And there are little pockets of Hawaiian communities around the valley where you can go in and you can see Poke Bowl restaurants. You can see a little kitchen. You can see all these dry good retail stores. There's a lot of activity out here that's focused and directed towards the Hawaiian community. Yeah. In fact, I've heard that there's a Hawaiian shape of commerce and also Hula Hulao. That's really been increasing in that area. So there must be both young people and also, you know, people who are setting up businesses and developing, you know, new centers. So let's go back to what you said are kind of incentives to being in business in Nevada. Electricity, 9, 11 cents a kilowatt hour? Yeah, everything is pretty much cheaper. I would say that as a general rule, you can expect that the cost of living is going to be 20, 25 percent, maybe 30 percent less, pretty much across the board. Housing is probably a little bit more than that. You know, you can, you know, for what a million dollars to get you in Hawaii, you probably have to spend maybe two, 50 or three over here. So and this is generally across the board, of course, there's more cash every month because there's no state income tax. Am I correct? That's correct. There's no state income tax, which makes it that is as an immediate if you're in that that doesn't take much to get there. But if you're not South Bracket in Hawaii of a 10 percent income tax, you get an immediate 10 percent pop in your income as soon as you come over. And that's, by the way, one of the more interesting aspects is Hawaii is a very visitor based location. Nevada, Las Vegas Valley, is a very visitor based location. Very parallel economies. Very similar. And it makes it very easy for people that are in that visitor industry, whether it be restaurants, hotels, maintenance workers that service that visitor industry, very easy for them to unplug and plug right in over here and bring all that experience with them. And that's what a lot of people are doing. So it's that their skills are very transferable, easy to move to the city of Vegas Valley. Well, you're right, because in a hospitality industry, it all starts out sometimes with the local five Teamster or ILW, whatever union card. And that's transferable to a hotel job. That's parallel to what you do here in the Vegas Strip. Am I correct? Absolutely. You know, that's a matter of fact. That's one of the reasons that I ended up coming out here back in the nineties is that I was doing some work for the the Rutledge family. And they had some investments out here through Unity House and their their own investments. And I came out here to help them with that. OK, well, we're going to take a short break and return for further insights and and and your experiences and insights to people who are really interested in the Vegas world. For more than 100 years, American Humane Association has been teaching kids to be kind to animals. Those in our homes, on the farms, on the silver screen. And wildlife conservation caring for the world's vanishing creatures. But we can't do it alone. Visit kindness one hundred dot org to find ways to teach kids how they can make a more caring, compassionate and humane world for all of us. I'm getting older. Do I need to worry about falling? Yes, you do. Each year, one in four people, 65 and older will experience a fall and many will be serious. The majority of falls happen at home. So remove things that could make you trip and install handrails to keep you steady to learn more about the steps you can take to help prevent a fall. Please talk to your doctor. You can also visit a rp foundation dot org or Medicare made clear dot com slash falls. This message was brought to you by United Healthcare and AARP Foundation. OK, OK. We're back. We're back talking with Mr. Reg Baker, CPA, who's now talking to us from a small community, residential neighborhood, outside of the strip in Vegas, which seems to be a very beautiful area. And he has a ton of experience, background as a CPA, as a consultant in health care, in aviation and as an advocate for small and medium sized business. And that's his passion. How do how to make CEOs and entrepreneurs succeed? And we're going to focus a little bit more on business looking from Hawaii, thinking about Vegas. What would you give as first kind of, you know, what would you kind of give them as as advice that a business could make it in Vegas based on your advice? I think the first thing, and most importantly, is to get away from the strip area, get away from the strip area, get out into the neighborhood a little bit. The industrial area is up in North Las Vegas. There's if you're a manufacturer or if you're a distributor, the warehouse space is very cheap in North Las Vegas. You know, there's a lot of opportunity in the valley around the strip, outside the strip, that would make doing business in Vegas in this valley area very cheap. And remember that there's we're at the two, close to the two and a half million mark here in the valley, which is more than double the entire state of Hawaii, the market that is much bigger. There's much more opportunity here. And then there's also the visitors that all come in. So if your product or service can also be marketed to the visitors, you've got another half a million people there that you could market to, if not more. So it's a much bigger market. It's a cheaper place to do business. And there's no state income tax for those businesses. Well, and you mentioned early in the show that it's no longer just a casino kind of place. You're talking about industrial sites. You're talking about light manufacturing, distribution, logistics, it's and call centers. It seems to be a diversified economy. But when you look at it, are casinos still the large bulk of the economy or a lot of new businesses are flowing into Nevada to take advantage of the cheaper costs? Yes, to all of that, the casinos, the gaming is huge. But also remember in Vegas, there's a division between the gaming industry and the resort industry, the hotel industry. So both of them are two different types of industries, although they do work well together. So a big visitor industry is out here. There's a big gaming industry. You've got all the support that those industries need to have, particularly in the technology area that construction in the main area. But then you've also got a big military presence here and all of those support functions that need to be in place. And because of the cost structure, you've got companies like Tesla that are opening up big battery manufacturing in North Las Vegas. You've got Google opening up data centers down in Henderson. There's just a lot of different larger companies finding both the lower cost of doing business, but also the lower tax structure that exists here, all beneficial for them to set up operations here. That's fantastic. And you mentioned about casinos and resorts and, of course, conventions and I've seen that Vegas has really transformed itself during the past 20, 25 years to more family oriented center, and not like the old days where, you know, cater to just the gamblers alone. How did they do that? How did they rebrand their Vegas experience to really be a resort, more resort experience? You know, it's a very delicate balance that they have to have. I mean, they've been promoting certain brand identification, for example, like Sin City and what happens in Vegas. So it's still a big component of that type of attraction for some people, and so they don't want to damage that, but at the same time, they're also bringing in more entertainment, more shows, more children focused, more theme parks. There's a division, if you will, in the marketing strategy of trying to attract those two different groups of people and some of the properties that are being developed. For example, a good example of that is Circus Circus. It's always been a theme type of resort, casino type of a property that would always be attracting that family environment. And there's other properties that are similar to that. You'd also be surprised, Ray, that there's an awful lot of properties that are outside of the strip area, like the state casino group. You know, they've got, you know, predominantly surrounding on the outskirts of the valley, all of their properties. For example, Red Rock Casino Palatation. They're outside, you say, yeah. Way outside. And Red Rock, that's where they had the UFC Fighting Championships. That's where they have that family that owns that station casino also owns UFC, the Ultimate Fighting Championship. And so it seems like Yeah, it seems to be, we were talking about the Raiders New Stadium MMA. It seems boxing and so forth, a linkage with big time sports as also as entertainment coming to Vegas. Is that right to bring those kind of people who really love to see MMA fights or football? That's a very new niche in sports, visitor industry. New niche. Oh, and one matter of fact, in the summerland area that I live in, they just built a hockey stadium. And the night, Las Vegas night, actually was the champion last year, their first year they made champion. And what's interesting is a little trivia. When the other hockey teams come here to play, they're in awe of what the laws of the night do because what happened is all the shows, all the circulate shows, all the other shows, all those entertainers come out and do the pregame and the half dose for the hockey and just bedazzle the entire crowd. A pregame show might have five or 6,000 or I'm sorry, five or 600 people go in a normal hockey game. With the Vegas teams play, there's five, six, seven thousand people show up because of the shows. And it totally intimidates the other players. So it's access to the top ranked entertainment, which is almost like having your in house Hollywood team out there, music. It's exciting. And right next to the stadium, they're now building a minor league baseball stadium. And they're going to be bringing baseball in here. So we're going to have the football team, the Raiders, and I have you know, this is really diversifying the economy. Well, and the other thing you just said, though, that Clark County, Vegas or Nevada has to invest in for the future, like you said, is an education, public education, and also the university R&D to really kind of if you have the Google's and Amazon's and Microsoft's looking at Nevada as a site, they want to see a steady supply of top software engineers, double E's and all kinds of people in that kind of niche tech area. And of course, you have have a robust, very good K to 12 system to have a pathway and the university. Do you see signs of Nevada investing in that educational area? Absolutely. Matter of fact, in the news, the last couple of days is a new program that the UNLV has just launched, one of the first in the country to become certified drone drivers, you know, and apparently, and I didn't know this is new to me, but apparently drones can be used for a variety of things. It can be used in real estate. It can be used as research, searches and rescue. It can be, you know, for fighting fighters. I mean, there's a lot of applications that drones can be used for. And there's got a certification program now that's making UNLV one of the premier universities in a country focusing on the drone technology, drone services that can be used. Now you've been in and out or have very good networks in the Nevada and Vegas business community. When you first went there, was it difficult to kind of get into the networks as some people from the mainland or Asia tell me it's sometimes challenging in Hawaii to really access and become part of the business networks here. How was it for you? How did you introduce yourself and kind of, you know, have people respond to you and kind of do business with you? Yeah, just like Hawaii, you have to be able to show that you're serious about being here. I think Vegas more than anywhere else, certainly more than Hawaii is a very transient town. A lot of people, you know, a lot of people come here expect to win a jackpot and become it doesn't happen. You just got to put the time and effort into it. And so people just like Hawaii, people will look at you and be skeptical and wonder how long you're really going to be here and you have a commitment. But after you've been involved with different organizations, you know, whether it be the Chamber of Commerce or Rotary or Boys and Girls Club, once you show a commitment to the community, then people start taking you much more seriously, very similar to Hawaii. So there's another similarity between the two communities right there. But it just takes a little bit of time and some commitment to show that you're going to be sticking around and you're going to be there for the long haul. Now, most people you've met in your journey at doing business in Nevada, are they Nevada born and raised or are they from California, West Coast, where are they from? When you find somebody that actually was born and raised in Nevada, it's usually a surprise. There's nothing. I had two and a half million people. I think over the years I've only met a handful that were actually born and raised here. Most of most people are transplants. They come from somewhere else. Or they're here and then they leave again and they come back. But most of the people are transients. They come in, they decide to stay. I've heard that about 25 to 30% of the people today actually came from California. Right. And here's a little bit of irony that I have found to be ironic. Is that people leave California to escape the politics, to escape the taxes and to escape the regulatory environment. They come over here and they bring all that with it. We've got people that have been elected in office that are trying to raise taxes, that are trying to bring in rules and regulations. It's just very ironic to me that the people who are running away from that bring it here. Last question. How international global is Vegas? What are the countries that you've seen people from countries from abroad that are trying to do business in Nevada now? Vegas. I think from Japan, Hong Kong. Where do you see people from abroad? Traditionally, a lot of people come over as visitors because of the gaming industry. You know, and particularly from China. You know, very, very popular from competing with McCollum. Right. But what's happening now is that people are seeing Nevada itself. I don't know where a few people know this, but up north in the Reno and the Tahoe area. Big manufacturing, a lot of water, a lot of water manufacturing. So people are looking at Nevada as an opportunity to set up factories or distribution centers. If there's tax advantages to do that, the laws here in Nevada are very favorable towards the businesses. At least they are right now. And so I'm talking to people. I'm working with people right now from Indonesia that are setting up operations here because they find this is a nice stepping stone to get to the big West Coast markets. Well, we're running out of time, Rich, and it's been wonderful talking to you. You seem so happy and I want to go to Vegas in 2019. That's my new goal with my wife and look you up and see what's what's happening, because I think what you're what you're saying is that it is a whole new great new world out there. It is much different than most people realize. There's a lot more out here than just being. OK. Again, thank you for your time. And this this concludes our 2018 series and 2019 will be the year of the wild boar. And hopefully it will be a good one for all of us. Happy New Year.