Nevada Appeal staff and wire report

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September 3, 2014
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Tesla Motors selects Tahoe Reno Industrial Center, sources say

Gov. Brian Sandoval will be joined by officials from Tesla this afternoon for a “major economic development announcement,” the governor said Wednesday.

All signs point to Tesla Motors choosing the Tahoe Reno Industrial Center as the site for a massive, $5 billion factory that will pump out batteries for a new generation of electric cars.

The story was first reported by CNBC but then later confirmed by The Associated Press.

Carson City Mayor Robert Crowell told the Nevada Appeal he would be at Gov. Brian Sandoval’s press conference today.

“This is apparently true,” Crowell said about Tesla coming to Northern Nevada. He said it’s, “the biggest thing that’s hit this state in the last century.”

The person, who spoke on condition of anonymity to the AP because no official announcement had been made, said work would soon resume at an industrial park.

Four other states — California, Texas, Arizona and New Mexico — have been vying for the project and the estimated 6,500 jobs it brings.

The one potential road-block is a tax incentive package for the Palo Alto, Calif., based company.

Asked whether he was calling a special session of the Legislature to implement a package of tax breaks for Tesla, Sandoval said he was talking with legislative leadership. Sources said the governor will call a special session next week.

Rick Combs, director of the Legislative Counsel Bureau said a one-day special session would cost between $25,000 and $40,000 depending on overtime.

Each additional day would cost between $15,000 and $20,000. He said he would need a week to plan the session.

Based on Tesla CEO Elon Musk’s public statements of what he expects a winning bid would be worth, the incentive package likely will total at least $500 million.

Nevada economic development laws allow several incentive programs, including abatements on personal property, sales and business taxes, and sales tax deferrals, according to the Legislative Counsel Bureau. But any changes or additions would require legislative action, and Nevada’s biennial Legislature won’t convene again until Feb. 2, 2015.

Aside from low tax rates and business-friendly workplace laws, Nevada’s other advantages include plenty of sun and wind to generate the “green” power that Tesla wanted, and relative proximity to the company’s car manufacturing plant in the San Francisco Bay Area.

The industrial park 15 miles east of Reno also is near a deposit of lithium, an essential element to produce the battery cells.

Tesla will pay about half of the factory’s cost. The other major investor is Panasonic, which will manufacture the lithium-ion battery cells and invest in equipment. At 167 square miles of high desert, the industrial park says it’s the nation’s largest — befitting of such a large factory. Tesla has said it would need about 10 million square feet, an area equivalent to about 174 football fields.

“I can tell you, indeed, that there is a press conference (today) and we have been invited,” Storey County Manager Pat Whitten told the Appeal.

Pressed about what comes after the governor’s press conference today, Whitten would only add, “if they or anybody comes, we will see that they get in smoothly and quickly.”

This spring, Musk announced the company would take the extremely unusual step of spending millions to prepare sites in two states — or perhaps even three — before choosing the finalist.

The person familiar with Tesla’s plans told The Associated Press a second site would still be prepared, in case Nevada is unable to deliver the incentives it has promised — or possibly to build a second factory.

Crowell said after Apple came to this region, “Tesla puts us over the top as far as that diversification goes.”

He said people outside are beginning to realize Northern Nevada has good access and a quality of life that’s hard to beat anywhere.

“I don’t know the particulars,” Crowell, a longtime legislative lobbyist, said. He added whatever is needed in a special legislative session should be done to seal the deal.

Ray Bacon of the Nevada Manufacturers Association referenced a deal to lure in Citibank to Las Vegas in 1984 which a special session was held.

“This is, proportionally, a bigger deal,” Bacon said. He said that in part because lower population up here than down there and Storey County will benefit big time.

He said Storey County can afford incentives because few people are there and it’s people who require services — companies not so much. He said the area up there in northern Storey County is all zoned industrial, so it’s a sparsely populated county with Tesla and other firms in the industrial park.

“It’s (Storey) ultimately going to be a very rich county,” Bacon said.

Tesla needs what it calls the “gigafactory” to make cheaper batteries for its Model 3, a mass-market electric car the company hopes to sell by 2017 for around $35,000.

Currently, Tesla offers only the Model S sedan, which starts at $70,000.

Lance Gilman, principal and director of the Reno Tahoe Industrial Center 15 miles east of Reno, said he had not been told of the decision.

“It would be the most exciting news of the century to me,” he said.


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The Nevada Appeal Updated Sep 4, 2014 06:26PM Published Sep 4, 2014 09:28PM Copyright 2014 The Nevada Appeal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.