Nevada considers $1.3B deal to land Tesla battery plant
Governor says gigafactory would generate up to $100 billion for state’s economy.
RENO, Nev. — Gov. Brian Sandoval has ordered the Nevada Legislature into a special session to consider $1.3 billion in tax breaks and other incentives for electric car-maker Tesla Motors as part of “an extraordinary opportunity” to seal the deal for its $5 billion battery factory and tens of thousands of jobs he says are needed to recover from the worst economic crisis in state history.
Majority Democrats in the Senate and Assembly intended to open the session to begin work on the package the Republican governor says would help further diversify Nevada’s hard-hit, tourism-based economy through new and innovative technology.
“An extraordinary occasion exists, which requires immediate action of the Legislature,” Sandoval wrote in the formal proclamation signed late Tuesday night. He said Nevada continues to “feel the effects” of the Great Recession – “the worst economic crisis in the history of the state.”
Sandoval said the lithium battery “gigafactory” and its 6,500 workers would generate more than 20,000 construction and other related jobs and up to $100 billion for Nevada’s economy over the next 20 years – a return on investment he estimated to be $80 for every $1 the state spends.
Little public opposition has emerged among lawmakers since Tesla CEO Elon Musk announced alongside Sandoval on the Capitol steps that Nevada had beat out California, Texas, Arizona and New Mexico for the factory expected to open in 2017.
The proclamation doesn’t name Tesla but covers the seven categories in the blueprint his Office of Economic Development outlined on Thursday when Musk said Nevada was the best fit for his venture critical to cutting costs for his next line of more affordable electric cars.
Lawmakers toured the expansive site at the Tahoe Reno Industrial Center along US Interstate 80 about 15 miles east of Sparks and Assembly Minority Leader Pat Hickey, R-Reno, said he was prepping for “an all-nighter if necessary” after late-night briefings scheduled with the governor’s staff.
The special session was expected to begin Sept. 10 and could last days.
“How long it is going to take is anybody’s guess,” Hickey said.
Ralston Reports’ Jon Ralston reported the proclamation wasn’t signed until just before midnight partly because other Nevada companies were making a last-ditch effort to secure a way to win sales tax breaks similar to those being offered Tesla.
Even before Sandoval signed the order, dozens of lobbyists had registered to represent more than 30 companies and organizations at the special session, including labour unions, chambers of commerce, school districts, auto dealers, health care organizations, utilities, manufacturing and other trade groups, and even Black Rock City LLC – the organizers of the annual Burning Man counter-culture festival.
Democrats said one of their priorities would be to make sure the jobs go to Nevadans at prevailing wages. That shouldn’t be a problem at the factory where Tesla says hourly pay will average $25 or more, but it could be a sticking point with some Republicans regarding the estimated 3,000 construction jobs projected to build the plant.
Mari St. Martin, Sandoval’s director of communications, did not respond to repeated telephone calls or emails seeking comment Tuesday night and early Wednesday.