Roads add nearly $100 million to Tesla deal
One of the elements of Gov. Brian Sandoval’s plan to bring Tesla and its 6,500 high-paying jobs to Nevada could add significantly to the cost of the overall project, over and above the tax breaks and incentives already estimated to be as much as $1.3 billion to get the deal done.
September 7, 2014 - 1:33 pm
CARSON CITY — One of the elements of Gov. Brian Sandoval’s plan to bring Tesla and its 6,500 high-paying jobs to Nevada could add significantly to the cost of the overall project, over and above the tax breaks and incentives already estimated to be as much as $1.3 billion to get the deal done.
As part of the package to bring the electric car maker’s Gigafactory to Storey County east of Reno, the state intends to purchase the right of way needed to link Interstate 80 and U.S. Highway 50 through the Tahoe-Reno Industrial Park where Tesla has already broken ground on its 5 million-square-foot battery plant.
The right of way will cost the state highway fund an estimated $43 million, but the construction of a road linking the two major roads will add many more millions to the total cost, possibly as much as $55 million. This would make the total cost to the highway fund nearly $100 million.
The project will have to compete with others around the state at a time of limited road dollars.
The project is actually already in the early planning stages by the Nevada Department of Transportation. The agency is in the initial environmental stages of a planned 13-mile extension of a road in the industrial park called USA Parkway, taking it south and east to the community of Silver Springs in Lyon County on U.S. 50. The $55 million is the estimate to build this extension.
A section of the parkway of about five miles has already been constructed by the industrial center owner that connects the area in Storey County to I-80, but it would need to be brought up to state standards before the state would take it over.
Department of Transportation spokeswoman Meg Ragonese said the project has been on the agency’s planning list for several years.
“We’ve planned on this project for quite a while,” she said. “It would improve mobility, connectivity and economic development. It would open Silver Springs and the surrounding areas to economic development all along the parkway and nearby. This project has a 9-to-1 ratio in our benefit cost analysis.”
Lyon County east of Carson City has had the highest unemployment rate of any county in the state.
It would become state Route 439 upon completion sometime later this decade. The existing road is not part of the state system, Ragonese said. The agency has had an agreement with the industrial park owners since 2010 to take over and maintain the road when it is brought up to state standards, she said.
Steve Hill, executive director of the Governor’s Office on Economic Development, said Thursday the road project is part of the overall deal but not really part of the benefit package proposed for Tesla to build its plant in Nevada.
The road is important for the project and also for the people of Lyon County, he said.
Gov. Brian Sandoval is expected this week to call for a special session of the Nevada Legislature to approve five bills that will contain the tax breaks and other economic incentives to bring Tesla’s operation to the state. The session would start Wednesday and possibly end by Friday.
The plant would have an estimated $100 billion economic impact over 20 years, with $40 billion directly tied to the battery factory, officials said Thursday.
It would manufacture high-tech batteries using lithium mined in Nevada.
Contact Capital Bureau reporter Sean Whaley at firstname.lastname@example.org or 775-687-3900. Find him on Twitter: @seanw801.