Innovation Zone plan runs into protests from Storey County

Despite assurances from R&R Partners representing developers of the proposed Storey County Innovation Zone, Storey County officials described the proposed legislation as deeply flawed and completely unnecessary.
Analyst Allison Combs and Pete Ernaut of R&R Partners said they have made every effort to protect the interests and finances of Storey County or any other county that ends up with an Innovation Zone within its borders.
The Innovation Zone would essentially be a separate county within an existing county run by its developers rather than by elected county officials.
Gov. Steve Sisolak has touted the idea as a way to move Nevada’s economy into the technological future.
“We feel Storey County is ideally suited to facilitate a project like this without a separate government,” said County Commissioner Clay Mitchell. “Working with Storey County is a far better idea than carving up Storey County or any county in the state.”
But he said Blockchain has shown no interest in working within the county’s existing laws and ordinances, instead saying the so-called smart city simply wouldn’t be possible within the county rules.
Veteran analyst and consultant Mary Walker said the goal is to create a new county that isn’t under the control of the existing county. She said the idea put forth by Blockchain argues it would be too expensive for the county to create a smart city with millions of square feet of commercial space and 15,000 homes.
She pointed out that Lee White of Blockchain said in an earlier meeting that without the flexibility offered through an Innovation Zone, ”it would be difficult and likely impossible to attract the necessary partners and investors.”
“The reasons to pass this legislation are not based in fact,” Walker said. “It’s not the Legislature’s role to pass laws so a new, emerging business can find investors.”
She said giving businesses their own governments “is not a good idea.”
Walker said the way the proposed legislation is written, the consolidated tax that includes the sales and use tax would go to the Innovation Zone immediately after the zone was created, sweeping a large portion of the funding counties need to operate and putting it in the hands of the zone operators.
“They say they’re keeping Storey County whole but that’s not true when they are entitled to siphon off taxes.”
She also pointed out that zone would be governed by a board of three members — two of them recommended by the operator of Blockchain and the third appointed by the governor.
She said that would give Blockchain control of everything and that appointed board would remain in charge until at least 100 registered voters moved into the zone, at which point elections would be required. What, she asked, would be the incentive for the zone operators to move more than 100 residents into the zone and lose control of the operation.
Walker said the proposed law would create an independent local government with all the powers of a county using a bureaucratic, administrative process rather than going through the Legislature.
Ernaut said every effort has been made to protect Storey County’s taxes, finances and other concerns.
One of those concerns was raised when committee members including Sen. Roberta Lange pointed out that the 68,000 acres Blockchain purchased has water enough to last 20 years. She asked what happens after 20 years?
Ernaut said the amount of water needed is much smaller than people are talking about. But he said the water issue about, “a regional water solution as much as anything else.”
Assemblyman P.K. O’Neill, R-Carson City, said he was concerned about oversight. He said after the Innovation Zone is created, there appears to be no real further oversight. He said the zone’s board could modify, and amend its general plan with impunity.
“Every county in the state is a creature of the state,” said Ernaut. “So the oversight over the Innovation Zone is exactly the same as it is on the other 17 counties.”
He said the Legislature could make any changes needed.
The committee chaired by Assembly Majority Leader Teresa Benitez-Thompson, D-Reno, is studying whether the Innovation Zone concept is viable and a good way to expand technological innovation by creating a “smart city” in Nevada. The panel took no action Tuesday. Several more meetings are planned to deal in detail with issues such as the lack of water in Northern Nevada.


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