Aviation companies win major tax abatements

When lawmakers debated Assembly Bill 161 in this year’s legislative session, proponents said offering tax abatements to aviation companies would result in major investments in the state.

Representatives of the Governor’s Office of Economic Development board got a taste of that Thursday in the first meeting at which aviation tax abatements were approved.

Seven companies — five of them based in Southern Nevada — received unanimous approval from the board on sales and property tax abatements on aircraft and parts. The abatements enable companies to purchase more equipment and hire more employees to maintain acquired aircraft.

Many of the numbers were staggering: an approval for Reno-based Dassault Aircraft Services worth $13.2 million; an approval for Apex Aviation, Henderson, that is projected to produce $1,216 for every tax dollar abated; a projection of $41 million in capital investment over 20 years from CECo Enterprises, a subsidiary of Henderson-based Cashman Equipment Co.; and a projection of 50 new jobs in the manufacturing and testing of unmanned aerial vehicles at Unmanned Systems Inc. in Henderson.

Economic Development Director Steve Hill said passage of the aviation tax abatements makes Nevada more competitive in the aviation field. Companies with corporate aircraft would often fly to other states for maintenance and parts, but the tax breaks are expected to keep more business in Nevada while expanding companies looking to grow.

Most of the aviation jobs are well-paid with pilots and aircraft mechanics among the employees listed in corporate pay averages.

Southern Nevada companies winning tax abatement approvals Thursday:

— Air Methods Corp., Las Vegas, which operates emergency air ambulance services as well as the Sundance Helicopters air tour company, got an $11.7 million incentive package and will invest $159.4 million in aviation parts and aircraft.

— Unmanned Systems, a $5.4 million package, with more than $65 million invested in parts, aircraft and equipment. Chief operating officer William Reynolds said 90 percent of the company’s work force are Air Force veterans who retired at Nellis or Creech Air Force Base and now have hourly salaries of $58.33.

— Lone Mountain Aviation, based at the North Las Vegas Airport, $2.9 million in incentives, investing $48 million in aviation parts. The company is the largest general aviation repair and maintenance facility in Nevada.

— CECo Enterprises (Cashman Equipment), $539,771 in incentives. The company is acquiring aircraft to service equipment accounts in rural Nevada locations.

— Apex Aviation, $391,743 in incentives. It’s the largest tenant at Henderson Executive Airport and CEO Scott Bullock said the aircraft maintenance facility would triple its staff over three years and have 96 employees within 20 years.

Earlier in the meeting, three companies with diverse backgrounds that are expanding or relocating to Southern Nevada, bringing more than 300 jobs paying up to $34 an hour, received tax incentives from the board.

Between them, the three companies will invest more than $63.7 million in new facilities in the coming months.

Tax incentives totaling $6.2 million were approved by the board in separate unanimous votes.

Machine Zone Inc., based in Palo Alto, Calif., is an online computer game manufacturer best known as the creator of “Game of War – Fire Age,” the top-grossing Internet game in 30 countries.

The company is establishing a data center in Southern Nevada, lured to the area by the Switch Supernap data storage facility in Las Vegas.

Victoria Valenzuela, chief legal officer of Machine Zone, said the company is leasing 12,000 square feet and investing $50 million in capital expenses and will hire 78 people at an average wage of $25 an hour.

The company will receive $3.8 million in sales tax, modified business tax and personal property tax abatements over 10 years.

Xtreme Manufacturing and its subsidiary company, Snorkel International, will consolidate and move its manufacturing facilities in California and Kansas to Henderson.

Tara Young, associate general counsel for Xtreme and Las Vegas-based Ahern Rentals, a sister company, said the company is investing $11.5 million and will hire 87 people over the next year and up to 463 over the next five with an average wage of $17.24.

Xtreme, which manufactures 16 models of aerial work platforms, is receiving $1.1 million in sales, business and property tax abatements.

Wilmington, Del.-based Barclays Services, which has a global financial services credit-card operation in Henderson, is expanding into a 54,000-square-foot facility and add 150 employees to be paid an average wage of $33.71 an hour over the next two to three years.

The company is investing $2.3 million in capital facilities. Barclays will receive $169,400 in sales and property tax exemptions and a $1.1 million catalyst fund grant.

The board also approved one of the largest tax incentive packages in its history — three applications from Las Vegas-based Switch, Ltd. for a $229.1 million.

The applications cover an expansion in Las Vegas and two in Northern Nevada.

Special abatements for data centers were approved as a result of the passage of Senate Bill 170.

The company, which announced that it would loop data movement between Las Vegas, Reno, the San Francisco Bay area and Los Angeles back to Las Vegas, will be making a capital investment of $810.6 million over 20 years.

A 1-million-square-foot development in Storey County will house data for eBay and is expected to open in June 2016.

The expansion in Las Vegas will produce the largest data center campus in the world at 6 million square feet.

Four board members with business relationships with Switch, including its CEO Rob Roy, abstained from the vote.

Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find @RickVelotta on Twitter.