Tesla’s Nevada Gigafactory ahead of economic impact expectations

The Tesla Gigafactory’s economic impact on Nevada has exceeded projections, bringing in more than 7,000 jobs and $6 billion in capital investment, according to a new economic impact summary.

In 2014, Nevada agreed to give the automotive and energy company $1.3 billion in tax abatements to incite the company to build a new battery factory in Northern Nevada. In return, Tesla promised to meet certain requirements in areas like employment and capital investment.

“The promises made have been promises kept,” said Derek Armstrong, deputy director of the Governor’s Office of Economic Development, which released the report Wednesday morning. “We’re extremely happy to see what they’ve done so far.”

Surpassing expectations

The Gigafactory, located east of Reno in Storey County, was originally projected to bring in 6,500 employees by 2018 who would work under the Gigafactory’s partners: Tesla, Panasonic and H&T Battery Components.

According to the impact summary, the factory had 7,059 employees as of June 30. Ninety-three percent of those are held by Nevadans, and 4,247 are qualified employees, or those who have been employed for at least three consecutive months and work full-time for an average minimum of 30 hours per week.

“This is an example of how incentive programs have been put to work and work really well,” Armstrong said.

The average wages for the employees are $25.78 per hour, compared to the projected $27.35.

Michael Schaus, communications director for the Nevada Policy Research Institute, said the report’s findings show lower taxes are a positive move for economic development. He said expanding similar tax breaks to small businesses would bring in more jobs and wealth to the state.

The economic development office gives tax breaks to existing and small businesses that export at least half of their goods or services outside of Nevada.

According to the U.S. Small Business Administration, 95.6 percent of businesses in Nevada were categorized as small businesses and employed 40.9 percent of the state’s workforce in 2013.

“If you’re looking for economic drivers, it’s the smaller businesses that will hire the most Nevadans and create the most wealth for Nevada,” Schaus said. “That’s where the economic policy should be focused. … (lower taxes) should expand to as many people as possible.”

Construction jobs also beat out projections: about 17,000 direct construction jobs and 7,900 indirect jobs have been created in Washoe and Storey Counties between 2015 and 2018, both of which surpassed projections. The total economic impact of construction to date is estimated to be $3.23 billion, $843 million higher than projected.

Impact on Nevada

As of June, Tesla has brought in $6.05 billion in capital investment, surpassing the $4.95 billion projection.

The original contract gave the company until 2024 to make $3.5 billion in capital investments in Nevada.

The report says this investment has “permanently changed the economic landscape of the area,” serving as a catalyst for additional development and increasing the demand for housing, retail and other services by bringing in new workers.

For example, the population in Storey, Washoe and Lyon counties grew by about 25,500 people combined between 2014 and 2017. Other tech companies such as Switch, jet.com and Blockchains chose to locate in the region in part due to the “increased visibility that Tesla created, and the infrastructure investment the company has brought about,” according to the report.

“This really shows the economic diversification for Northern Nevada in that it’s moved from just being a service-based economy with a lot of reliance on the hotel and casino industry,” Armstrong said. “Now, we have an emerging advanced manufacturing component.”

Overall employment in Washoe and Storey counties has grown by 34,500 jobs in four years, and the Gigafactory is estimated to have brought in about 44 percent of those jobs.

According to the report, Tesla is expected to create an annual economic impact of $3.56 billion in the Washoe and Storey region in 2018.

Tax revenue

Tesla was originally projected to generate up to $1.95 billion in direct and indirect revenue in Nevada over the next 20 years, but is likely to beat that estimate given its higher-than-anticipated job creation, according to the report.

“We’ll continue to do our part to invest in the state as we grow,” a Tesla spokesperson said via email.

While Tesla will not generate personal property, real property and modified business taxes until 2024 and sales and use taxes until 2034, the Gigafactory project has brought in new transportation and utility infrastructure, as well as employee spending that has generated sales and property taxes.

Total tax revenue from employees at the Gigafactory was $57.7 million for 2018. Projections expected employee tax revenues to fall between $42.9 million and $81.8 million.

Armstrong said he expects Tesla’s momentum to continue throughout the tax abatement process.

“We’re a third of the way through the process,” Armstrong said. “What they’re doing now is just going to greater later.”

Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.

Local Videos
Bonnie Springs closes (Caroline Brehman/Kimber Laux)
Bonnie Springs Ranch near Las Vegas officially closed its gates Sunday, March 17, 2019. (Las Vegas Review-Journal)
Honoring a fallen North Las Vegas Police officer at his namesake school
The 20th Annual Raul P. Elizondo Honor Day celebrates the fallen North Las Vegas Police officer's legacy at his namesake school. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Windy day in Las Vegas Valley
The Review-Journal's camera on the under-construction Las Vegas Stadium the was buffered by high winds on Wednesday, March 14, 2019. (Las Vegas Review-Journal)
March gloom falls on Las Vegas
After a rainy overnight, gloomy skies hover over Las Vegas Tuesday morning. (Mat Luschek/Review-Journal)
John Katsilometes gets his head shaved at St. Baldrick's
Las Vegas Review-Journal man-about-town columnist John Katsilometes gets his head shaved by former Las Vegas Mayor Oscar Goodman during St. Baldrick's Foundation shave-a-thon on the Brooklyn Bridge at New York-New York in Las Vegas Friday, March 8, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
The Blue Angels take flight over Las Vegas Strip
The Blue Angels’ U.S. Navy Flight Demonstration Squadron flew their signature Delta formation over a part of the Las Vegas Strip, McCarran International Airport and east Las Vegas and were scheduled to fly over Hoover Dam. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Gross World Records
A group of about 20 children gathered around a TV at Sahara West Library on Feb. 27 for a history lesson on the most disgusting world records.
Graduation for Renewing HOPE program
The Renewing HOPE program graduation for homeless who spend nine months in Catholic Charities program. Graduates are preparing to enter the workforce. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Car crashes into Starbucks near Las Vegas Strip
Lt. William Matchko of the Las Vegas Metropolitan Police gives details about a car crashing into a Starbucks at Sahara Avenue and Paradise Road, near the Las Vegas Strip, on Friday, March 1, 2019. (Jessica Terrones/Las Vegas Review-Journal)
Car crashed into PT’s Gold
A 60-year-old man who police believe was impaired drove into a PT’s Gold at Silverado Ranch and Decatur boulevards Thursday night, Metropolitan Police Department Lt. William Matchko said. The driver was hospitalized and is expected to survive. A man inside the bar was hit by debris but drove himself to the hospital, Matchko said. (Katelyn Newberg/ Las Vegas Review-Journal)
Driver crashes vehicle into PT’s tavern in south Las Vegas (part 1)
A driver suspected of impairment crashed a vehicle into the wall of a PT’s Gold tavern, at 4880 W. Silverado Ranch Blvd., in Las Vegas on Thursday, Feb. 28, 2019. (Katelyn Newberg/Las Vegas Review-Journal)
Driver crashes vehicle into PT’s tavern in south Las Vegas (pullout)
A driver suspected of impairment crashed a vehicle into the wall of a PT’s Gold tavern, at 4880 W. Silverado Ranch Blvd., in Las Vegas on Thursday, Feb. 28, 2019. (Katelyn Newberg/Las Vegas Review-Journal)
Kids Read Books To Dogs At The Animal Foundation In Las Vegas
Kids from local Las Vegas elementary schools took part, Thursday, in a program at the Animal Foundation, where they read books to dogs. (Mat Luschek/Review-Journal)
Pioneer Trail highlights historic locations in West Las Vegas
The Pioneer Trail, a 16-site route of historically significant locations in Las Vegas, starts at the Springs Preserve and snakes east until it reaches above the brim of downtown. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutefsya
Vegas Warm Weather Hits Las Vegas Valley
Between Feb. 20-21, parts of the Las Vegas Valley were hit with 7.5" of snow. Less than a week later, it was sunny with temperatures in the 70s. (Mat Luschek/Las Vegas Review-Journal)
Dr. S. Jay Hazan, a World War II veteran, talks about his arrest at the VA Hospital
Dr. S. Jay Hazan, a World War II Army veteran, was arrested in November after he caused a ruckus at the VA Hospital in North Las Vegas and stole his driver's car keys. He was arraigned on Tuesday, Feb. 26, 2019, and the charges will be dropped after 60 days. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Claytee White talks about Black History Month
An interview with Claytee White, director of the Oral History Research Center at UNLV. (Benjamin Hager/Las Vegas Review-Journal)
Reflecting on the Moulin Rouge and a segregated Vegas
Former employees of the Moulin Rouge, the first integrated hotel-casino in Nevada, talk about what it was like in the brief six months the casino was open. (Rachel Aston/Las Vegas Review-Journal)
Las Vegas home prices
Home prices rose in every ZIP code in the Las Vegas Valley in 2018 for the second year in a row, according to SalesTraq. Prices grew fastest in older, more centrally located areas. But prices were highest in the suburbs. The top three ZIP codes for price growth were 89119 (29.8%), 89146 (25%) and 89030 (24.6%). The top three ZIP codes for median sales prices were 89138 ($464,500), 89135 ($420,500) and 89052 ($370,000).
Wagonwheel Drive overpass reopens after ice closure
Overpass at Wagonwheel Drive reopens after ice on the onramp caused the ramp to be shut down, Feb. 22, 2019. (Michael Quine/Las Vegas Review-Journal)
Keeping warm at the city of Las Vegas’ homeless courtyard
With help from the city of Las Vegas, a Salvation Army shelter stays open during the day Thursday and Friday, offering a safe place for the homeless to find respite from freezing temperatures and snow. (Chase Stevens/Las Vegas Review-Journal)
Sloppy, Slushy Road Conditions Lead to Slow Traffic
Traffic slowed to a crawl on Jones are near Russell as conditions worsened Thursday. (Mat Luschek/Review-Journal)
Winter storm blankets west side of Las Vegas Valley
On Wednesday evening through early Thursday a winter storm dumped more than 7 1/2 inches of snow on some parts of the Las Vegas Valley. (Michael Quine/Las Vegas Review-Journal)
Las Vegas snow day for children
Las Vegas kids play in the snow that fell on Feb. 21, 2019. (Belinda Englman/Las Vegas Review-Journal)
Snow closes Red Rock Canyon, residents enjoy rare snowfall
The greater Las Vegas area was hit with snowfall on Thursday, Feb. 22, 2019. This video shows the areas surrounding Red Rock Canyon and the Summerlin community. Video by: Heidi Fang/Las Vegas Review-Journal
Las Vegas kids attend school in the snow
Las Vegas children attend school during a rare snowstorm on Feb. 21, 2019. Staton Elementary School and other CCSD schools remained open. (Glenn Cook/Las Vegas Review-Journal)
People enjoying the snow in Summerlin
Fox Hill Park in Summerlin was busy Thursday morning, Feb. 21, 2019, with people enjoying the rare snow that fell overnight. (Mat Luschek/Las Vegas Review-Journal)
NHP advises motorists to take caution during Las Vegas snowstorm
NHP advised motorists to take caution during the snowstorm in Las Vegas. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Timelapse of snow at Red Rock Canyon
More than 7 inches of snow fell in the western areas of the Las Vegas Valley, including Red Rock Canyon, on Thursday, Feb. 21, 2019. (Mat Luschek/Las Vegas Review-Journal)
Snow falls at Fremont Street Experince in Las Vegas
Snow falls at the Fremont Street Experience early Thursday, Feb. 21, 2019 in Las Vegas. (David Guzman/Las Vegas Review-Journal)
It is a rainy Valentine's Day in Las Vegas - Video
These scenes come from the Las Vegas Stadium LiveCam (Las Vegas Review-Journal)
Business Videos
The Bellagio Conservatory's spring display has a Japanese theme
The Bellagio's conservatory is hosting around 65,000 flowers, to form a Japanese theme this spring. (Mat Luschek / Review-Journal)
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
LVCVA/Boring Company Press Conference
The Las Vegas Convention and Visitors Authority announced a collaboration with Elon Musk's The Boring Company to develop and operate an autonomous people mover system for the Las Vegas Convention Center District.
International Pizza Expo includes green and gluten free
The International Pizza Expo at Las Vegas Convention Center included companies focused on vegan and gluten free, and plant-based pizza boxes. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
International Pizza Expo kicks off in Las Vegas
The first day of the International Pizza Expo at Las Vegas Convention Center is everything Pizza. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
T-Mobile program aids guests with sensory needs
A program at T-Mobile Arena is designed to provide a more sensory friendly experience for guests.
Photo Booth Expo
Danielle May talks about how Simple Booth transformed her Volkswagen bus into a business.
Nevada Gaming Commission's highest fines
The highest fines assessed by the Nevada Gaming Commission, according to commission Chairman Tony Alamo: 1) Wynn Resorts Ltd., $20 million, 2019 2) CG Technology (then known as Cantor G&W Holdings), $5.5 million, 2014 3) The Mirage, $5 million ($3 million fine, $2 million compensatory payment), 2003 4) Stardust, $3 million, 1985 5) Santa Fe Station, $2.2 million ($1.5 million fine, $700,000 compensatory payment), 2005 6) Las Vegas Sands, $2 million, 2016 7) CG Technology, $1.75 million, 2018 8) CG Technology, $1.5 million (also $25,000 in escrow for underpaid patrons), 2016 9) Caesars Entertainment, $1.5 million, 2015 10) Imperial Palace, $1.5 million, 1989 11) Peppermill Casinos, $1 million, 2014
Tiny Pipe Home vs Shipping Crate
A Tiny pipe home was displayed at the International Builders Show this week in Las Vegas.
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
Africa Love owner talks about his store in Las Vegas
Mara Diakhate, owner of Africa Love, gift and decor store, talks about his store in Las Vegas. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Developer gets approval to build homes at Bonnie Springs
The Clark County Planning Commission has approved a plan to build 20 homes on the site of Bonnie Springs Ranch. (Michael Quine/Las Vegas Review-Journal)
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
ad-high_impact_4
TOP NEWS
Home Front Page Footer Listing