NLV mayor wants to use tax tools Tesla used

North Las Vegas didn’t win the battle for Tesla, but the legislation that made the battery gigafactory possible holds the answer to North Las Vegas’ financial problem, according to the city’s mayor.

Mayor John Lee wants to designate 800 acres of Apex, the roughly 20,000-acre industrial park thought to be the city’s biggest asset that it just hadn’t found a way to leverage, as an economic diversification district.

The Legislature, when fast-tracking policy for Tesla’s manufacturing plant in Northern Nevada, wrote in the ability for a city or county to classify an “economic diversification district” giving industries that make up this district tax breaks so long as the industries involved in the project will collectively invest $3.5 billion in Nevada within 10 years.

The legislation created a solution to the chicken or the egg problem of Apex, city officials say. Apex doesn’t have the utilities that businesses need and the city can’t put in the needed utilities without the guarantee of having a business to use them.

The tax incentive district will eliminate the holdup by luring businesses, according to Lee.

The city says it has been in talks with three companies that want set up shop in Apex, but is not disclosing the names of those companies.

At a meeting last week, city officials said getting the utilities needed to fully develop Apex would cost $150 million.

The city is evaluating three ways to fund that endeavor: A public/private partnership where the user of the utilities pays the upfront costs and then gets the money back on its bills, a bonding agreement and a direct foreign investment.

Robert Lang, director of the UNLV Brookings Mountain West Institute, a partnership between UNLV and the Washington think tank, at that meeting presented a report based on the city’s best-case scenario of a fully developed and occupied Apex.

The prediction: 57,960 direct jobs and a $670 million boost in state and local tax revenue.

While taking 800 acres off the city’s tax rolls sounds like the last thing that would help the cash-strapped city, cutting out this small part of Apex would allow the city to get the utilities to the rest of the 7,000 acres of developable land.

“I think that we’re probably one of the most uniquely qualified cities for the Legislature to say, ‘Here is another tool. Go try and make it work,’ ” said Ryann Juden, the mayor’s chief of staff. “Because they don’t really want anything to do with us. They can’t do anything with us. They have their own issues.”

The City Council would need to create the district and the project would need to be approved by the governor’s office of economic development in order to get the tax cuts.

Gov. Brian Sandoval praised the mayor’s plan in a prepared statement. “I am pleased the state was able to play a role in this decision by allowing local governments to create tax incentive districts that fit the needs of their changing cities.”

In a September special session, the Legislature approved a $1.3 billion tax incentive package for the electric car manufacturer Tesla.

Lee made a point of noting that the city had been in talks with Tesla about coming to Apex. The issue, he said, was that the site couldn’t get to where Tesla needed it to be fast enough he said.

“We just weren’t prepared (for Tesla),” Lee said. “We’ll be prepared for the next group though.”

Contact Bethany Barnes at bbarnes@reviewjournal.com or 702-477-3861. Find her on Twitter: @betsbarnes.

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