SimPro USA looks to change ‘Sin City’ into a ‘Sim City’

 - March 28, 2007, 7:35 AM

A recent indicator of the business climate malaise that California’s new governor has vowed to reverse is the move of flight simulator facility operator SimPro USA from Los Angeles to the Las Vegas suburb of Henderson. The company, which has been serving between 300 and 400 pilots a year with full-motion simulators located at Los Angeles International (LAX) and Santa Monica (SMO) Airports, Calif., is undertaking a major expansion as it begins construction on the first of three buildings, each to house eight simulator bays.

In moving to Nevada, SimPro will extend its customer base from the major airline market it has been serving in Los Angeles to reach the operators of business and regional airline aircraft. SimPro’s California facilities have featured simulators for training on Boeing 737s, 747s, 757s and 767s, as well as the MD-80 series, the MD-11 and Airbus models.

Russ Kissinger, the firm’s COO, told AIN that SimPro is bringing about 50 highly paid computer technicians with it to Nevada’s second largest city, located 10 miles southeast of the famed Strip. He said the move from California–and the Los Angeles area in particular–is prompted by the need for a more business-friendly economic environment. “The cost of doing business was becoming too expensive in California,” he explained. “For one thing, workers compensation has tripled” in recent years, he noted, echoing what Gov. Arnold Schwarzenegger called one of the state’s greatest handicaps in keeping and attracting business.

“Also, it is 43 percent cheaper across the board to live here than where we were in California,” added the 30-year resident of Playa del Rey, on the coast directly north of LAX. Citing figures from the Nevada economic development office, he said, “Everything from housing to a loaf of bread is more affordable.”

Kissinger said that in addition to Nevada not having personal or corporate income taxes, the city of Henderson extended “unbeatable” tax incentives in convincing SimPro to locate in its Whitney Mesa Business Park. “Tax incentives from Henderson alone would have made the difference. The city business promotion staff just seem to make things happen for you. It makes a difference when you’ve got a pro-business environment,” Kissinger said.

Kissinger said his company is currently negotiating agreements with various simulator manufacturers and training service providers to host the latest state-of-the-art instructional devices and techniques. He anticipates that business aircraft training will range from the Cessna Citation to the ultra-long-range transports. As they come on line, SimPro expects to accommodate training for the new generation of entry-level jets as well.

The site is approximately halfway between McCarran International (LAS) and Henderson (HND) Airports, making it convenient for both airline and corporate crews. “We wanted to relocate somewhere close to a major airport that is more economically friendly,” he noted. “What we’re really doing is selling the Las Vegas area and its amenities.”

Kissinger said entertainment and lodging packages for crews have already been arranged. “It’s $35 a night here versus $100 and up for first-class lodging in Los Angeles. No place can match the amenities–the most cost-effective amenities–we can provide here.”

SimPro’s operation will be the first airline and corporate aviation simulator training facility in the state of Nevada, Kissinger said. “This is a brand-new concept of a fully dedicated facility that markets simulator bays and customer service to providers of simulator equipment and training. SimPro does not manufacture or market flight simulators, or provide training. We do provide everything but the simulator and training itself.”

SimPro is prepared to offer separate facilities for airline and corporate aircraft (fixed-wing and rotorcraft) training, serving both airlines and providers of corporate and airline training. The ratio of corporate and airline training will be decided by the market, he explained. “We’re now in position to take advantage of the corporate business upturn when it happens.”

He added, “We can provide a customized helicopter setup for a helicopter sim operator. A simulator bay is a simulator bay. We could put two or three simulators in the same bay, depending on the motion excursions.”

The first of three $4 million buildings SimPro expects to have up and running by mid-decade is scheduled to become operational this fall. The 40,000-sq-ft facility will feature eight simulator bays, each with adjoining office and classroom space, in addition to maintenance support for each simulator. Each bay is to include two briefing rooms. The Phase 2 building, with space for eight more sim bays, is slated to come online next year. Phase 3’s projected operational date depends on market factors, Kissinger said. When all the envisioned 120,000 sq ft is being used, SimPro expects to serve approximately 1,000 professional pilots a month.

Kissinger said SimPro evaluated a number of potential relocation options during the past two years, including Southern California, Phoenix and even the former Barber’s Point Naval Air Station in Oahu, Hawaii. “Hawaii was really attractive, but too many potential customers were put off by the 2,300-mile flight from the mainland,” he noted.

SimPro USA CEO Ron Kelly remains in the Los Angeles area, and will visit Nevada periodically. Mark Bushaw, v-p of technical services, is to run day-to-day operations with Kissinger.