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Nevada Gov. Sandoval seals deal to bring $1 billion electric car plant to Las Vegas

20 December 2015

By Sean Whaley and Sandra Chereb
CARSON CITY — Gov. Brian Sandoval sealed the deal Saturday to bring a $1 billion electric car manufacturing plant to North Las Vegas after Nevada lawmakers gave final approval.

Sandoval signed four bills into law shortly after the Nevada Assembly approved three Senate bills dealing with tax abatements, tax credits, water and infrastructure at the Apex site.

The Senate completed its work late Friday night.

Faraday Future, an upstart electric car maker with financial backing from Chinese billionaire Yueting Jia, said it will build a 3-million-square-foot factory and set an ambitious goal of producing cars by 2017.

At a bill signing ceremony, Sandoval said lawmakers strengthened the Faraday legislation during the four-day special session.

He noted the remarks of Assemblyman Lynn Stewart, R-Henderson, who said during one hearing that the Apex site has not changed in decades.

"And if you drive by, there is a sign that says Apex Industrial Park, and you see the hope and potential there," Sandoval said. "But it's always been just that. Hope and potential. Until now."

Sandoval, who met with Jia during a trade mission to China this fall, said he was incredibly impressed with his vision and plan for Faraday. He said Nevada now has the opportunity to "build not only Faraday's future, but Nevada's future."

"I honestly believe that it is going to change the trajectory and economy in Southern Nevada and the state," he said. "This is one of those days we've done a good thing."

For its part, Faraday released a statement saying it was "very excited" by the news.

"The State of Nevada and the City of North Las Vegas have been great partners, we look forward to continuing the relationship with them and bringing our $1 billion dollar investment to North Las Vegas," the statement said.

To lure Faraday to Nevada, lawmakers approved $215 million in tax abatements and transferrable tax credits that will be available as the company meets investment benchmarks. Specifically, the tax credits total $38 million; the abatements $176 million over 10 years.

Similar deals will be available to other companies who come to Nevada and meet the $1 billion investment threshold.

But the bigger picture of the Faraday package involves developing and financing infrastructure at Apex, an 18,000-acre industrial park that has sat largely vacant because of a lack of water, sewer and utilities.

Steve Hill, executive director of the Governor's Office of Economic Development, said several companies courted by the agency were interested in Apex but went elsewhere because of the lack of services.

State and local economic development officials said providing those services will be a boon to Southern Nevada's economy, making available sites for large industrial users.

North Las Vegas Mayor John Lee, who watched the Assembly votes in chambers finalizing the deal, said he was "totally ecstatic" that the Legislature took up the Faraday deal, worked the bills and OK'd the deal. The city was instrumental in first catching Faraday's interest in the site.

"I am very proud of them for helping all of Nevada with these bills," Lee said. "I think this is not only going to be a big deal for North Las Vegas, this is going to be a major shift in Southern Nevada and how we're perceived throughout the United States and the world."

The Las Vegas Global Economic Alliance said at least 150 businesses visited the Apex site but could not wait for infrastructure demands to be satisfied.

"The Faraday deal has the capacity to jump-start our manufacturing sector, create thousands of high-wage jobs for Nevadans, and unlock of the full potential of the Apex Industrial Park in North Las Vegas," said Jonas Peterson, CEO of the alliance. "This is a huge win for Southern Nevada and will have a positive impact on the entire region."

Assembly Majority Leader Paul Anderson, R-Las Vegas, said the state lost out on revenue and jobs that would have been generated if Apex was developed earlier.

"Here we have the opportunity to have an anchor tenant willing to make a $1 billion investment in that park," he said.

The bills passed the Assembly 37-4.

Only a handful of lawmakers opposed the deal.

"Passing this legislation is a victory for North Las Vegas and the entire state of Nevada," said Sen. Kelvin Atkinson, D-Las Vegas. "We will finally have the opportunity to realize the potential of the Apex Industrial Park, and we will create thousands of jobs for Nevadans in the process."

Faraday has yet to make a car, but the company says it has about 400 employees and will develop a car with unprecedented connectivity. Faraday said it will unveil its concept in January at the Consumer Electronics Show in Las Vegas.

The package of bills debated and approved over a four-day legislative session also authorizes up to $175 million in bonds to help pay for road improvements and a rail connection to the site.

Under the deal, property owners within the Apex site agreed to finance about half the bonds. The rest will come from a tax increment area, where a portion of property taxes will be used to make payments as property values increase because of the added infrastructure.

Should those revenue sources fall short, uncommitted general funds from the city of North Las Vegas would make up the difference, followed by the state if necessary.

Officials described the likelihood of Nevada taxpayers being on the hook as unlikely.

Another component of the package is workforce development. Assembly Bill 1 allocates $2.5 million to create a program sufficient to provide training for up to 4,000 automobile assembly workers at the facility. It would train up to 800 workers in any given 12-month period.

Faraday said it eventually will hire 4,500 workers and pay average wages of $22. Economic analysts say the plant will also create 9,000 indirect jobs, generating an annual economic impact of $87 million for the region.

Copyright GamingWire. All rights reserved.


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