Northern Nevada gets gigafactory; Henderson OK’d for megafactory

Northern Nevada will have its gigafactory.

But Henderson will have a battery megafactory. At least that’s what the CEO of K2 Energy Solutions said before the Governor’s Office of Economic Development unanimously approved tax-abatement incentives for the company’s $32 million expansion.

The board on Thursday approved a $2.9 million incentive package for the expansion of the Henderson-grown company that recently won a contract to provide lithium batteries for rail guns that will be mounted on U.S. Navy warships.

K2 CEO Johnnie Stoker said the company was courted by Texas and Michigan but wanted to evaluate all options before making a decision on expansion.

K2 was one of two prominent Clark County companies that sought expansion incentive packages before the board Thursday. Switch Ltd., a Las Vegas-based data storage center, also won a $20.6 million package of incentives for a $225 million expansion.

Both projects were overshadowed by a $1.3 billion incentive request approved for Tesla Motors earlier in the meeting.

Stoker joked that while “Tesla is building a gigafactory up north, we’ll have a megafactory here.”

Founded in 2006 with four employees, the company designs, develops, engineers and manufactures large-format batteries and battery systems made with lithium ion phosphates technology. Industry officials say K2 batteries of longer life cycles, superior power, lighter weight and are more environmentally friendly than oxide-based batteries.

The 20,000-square-foot Henderson facility will be expanded to 150,000 square feet and will produce batteries for medical, military, aerospace and electric vehicle markets. The expansion will provide 29 new jobs paying an average wage of $20.56 an hour.

The company was considering expansion options in Texas, Arizona, Idaho, New Mexico and Utah.

State officials say the incentives offered will provide an $18 economic impact per abated dollar and new tax revenue of $1.47 per abated dollar.

Las Vegas-based Switch plans an expansion that will create 34 new jobs paying an average wage of $24.63 an hour. The state estimates an economic impact of $9 per abated dollar and new tax revenue of $1.76 per abated dollar.

Three board members abstained from the action, Rob Roy, CEO and founder of Switch, Kathleen Drakulich, whose law firm works with Switch, and Lt. Gov. Brian Krolicki, who said future business dealings with the company could be construed as a conflict of interest.

Roy, whose company works with higher education in the state, said Switch may expand its presence to Reno in the future and collaborate with the University of Nevada, Reno, in addition to the University of Nevada, Las Vegas.

Incentives were approved for three other new or expanding businesses to Clark County:

— Erickson International LLC, which produces window films for automotive, residential and commercial markets from its Las Vegas factory, is planning a $13.4 million expansion. The board approved a $1.2 million package of sales, modified business and personal property tax abatements. The state expects an economic impact of $75 per abated dollar and new tax revenue of $1.95 per abated dollar. The expansion will create 28 new jobs with an average wage of $20.07 an hour.

— APAC Customer Services, which operates a customer relationship management office in Las Vegas, is planning a $1.6 million expansion. The board approved a $217,000 package of sales, modified business and personal property tax abatements and a $40,000 training grant for 40 employees. The state expects an economic impact of $337 per abated dollar and new tax revenue of $14.90 per abated dollar. The expansion will create 48 new jobs with an average wage of $20.37 and hour.

— Solid Landings Behavioral Health, a Southern California-based organization specializing in the treatment of addiction, chemical dependency, substance abuse and mental illness, is planning a $3.6 million expansion with a new facility in Las Vegas. The board approved a $382,000 package of sales, modified business and personal property tax abatements. The state expects an economic impact of $370 per abated dollar and new tax revenue of $15.26 per abated dollar. The expansion will create 104 new jobs with an average wage of $25.22 an hour.

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