Since 2015 Reno expansion, Clear Capital continues to scale up
RENO, Nev. — Before the coronavirus pandemic pumped the brakes on the U.S. economy, Northern Nevada was on a roll.
Thanks to greater Reno-Sparks’ business-friendly climate, deepening talent pool, and access to a high quality of life, companies have flocked to the region like clockwork over the past several years.
Though the growth stalled for a few months because of the COVID crisis, the economic engine is revving back up in Reno-Sparks as the state continues to gradually reopen.
With that in mind, the NNBW is checking in with CEOs of some of the companies that migrated to the region over the years to find out exactly why they chose Northern Nevada, and what opportunities and challenges they have faced since launching in Reno-Sparks.
Q: Why did you decide to expand Clear Capital to Northern Nevada?
Duane Andrews: The change in tax law was the initial thing that caught our attention. And we’re a much healthier company being in Reno as a headquarters. We have an employment base that was already here commuting to our Truckee office, and we have the ability to be a partner with UNR — we have 26 people hired just last year from UNR. What a great benefit.
Q: What is it about Nevada’s favorable tax climate that makes doing good business in the Silver State possible?
Andrews: In 2011, we found out the tax laws had changed so that companies like ours, an S corporation, if they were headquartered outside of the state of California and the ownership was outside of the state of California, then the single-sales rule would apply so that you only pay personal income tax on the products that you sell within California, not on the stuff you sell in any other states. We currently sell 18% of our products in California.
I still pay personal income tax in California, but only on 18% of the income because of the products we sell in California, not on the remainder. We decided to set up an office in Reno because of the change in tax law — it’s where you sell your items, it’s not where you have your assets. We changed our corporate ownership to being a Nevada corporation and we set up our first office here in Reno. Being that I was living in Truckee, only 15 miles away from the state border, didn’t make any sense.
I did some calculations one weekend and said to my wife, Becky, ‘I figured out that in seven years, we’ll get a free house if we move to Nevada.’ And she says, ‘Let’s go look at houses.’ So we went to Incline (Village) and within a week we were in escrow.
Q: What’s the biggest thing that’s changed about your company since expanding here?
Andrews: The tax structure is advantageous, of course, and being able to hire the employee base has allowed us to grow … to make hay when the sun shines, so to speak. Being that our industry has economic fluctuations — an interest rate drop, refinances spike, then our customers get surprised, we get pleasantly surprised, and we need to scale up. We’ve been fortunate that we haven’t had to scale down.
Our stance in the industry, because of the performance of our people, makes it so that we keep gaining market share. So that even though there’s a change in the economy, which allows us to grow our revenue in the short-term, what happens during that time we’re able to gain market share and add additional customers.
Q: What kind of job growth has your company experienced since relocating here?
Andrews: We started with 65 people and now we have 250 (Reno-based employees).
Q: What levels of financial success has your company enjoyed since first starting / relocating here?
Andrews: We just hit $200 million in revenue this last year — that was an 18% increase over the previous year. It’s a lot easier to manage with growth than with declines. And it’s a lot easier, also, to keep everybody pumped and going and positive momentum and keep the culture going when you’ve got growth.
Q: What opportunities for growth are on the horizon for your company here in Northern Nevada?
Andrews: We do 50,000 to 100,000 — depending on the month — valuation reports a month. And our operational support teams help support that. They help the real estate agents and appraisers out in the field that are completing the reports. That’s a big area of growth in the next year.
The other area of growth is research and analytics. Our research and analytics team, which is primarily based in the Reno area, drives our data and analytics products. Last year we hired three interns from UNR who are getting graduate degrees in mathematics and statistics. Two of them we ended up hiring full time here.
We are the leading company in our industry in machine learning. We jumped in hard in machine learning three and a half years ago, and that is driving our automated valuations, our quality control processes, and the cleanliness of all of our data. That has been a real game-changer for us. So that team is growing. And as we get a greater market share in automated valuations and analytics we’re going to need more people in the Reno area.
Q: What challenges, if any, does your company address when it comes to recruiting a strong local workforce that’s paid well and can comfortably live here?
Andrews: We’ve tried to stay ahead of that. Last year, April (2019), we changed our starting wage from $15 to $17 an hour for entry-level jobs. For the folks who had been here for a year or two, we added $2 to their wage. When you read about the working homeless … I feel responsibility as a business owner to not have our people in that position. The cost of living is out of our control, but we need to do what we can to control what we can.
Editors note: Due to space limitations, read the full interview online at nnbw.com.
Q: If you could change anything about your decision to plant your flag in Northern Nevada, what would it be?
Andrews: We would’ve done it sooner — No. 1. The local entities — like EDAWN and the mayor (Hillary Schieve) and Gov. Sandoval — when we moved here were very, very supportive and encouraging. The one entity, I think, we should’ve embraced sooner and with more gusto is UNR. They graduate 400 business students — undergrad and grad — a semester out of that place. I regret not having a higher profile sooner over there.
Construction could begin next year and require about 500 to 600 workers, with a permanent workforce starting at 150 to 200 people with potential to expand.