Nevada legislators now face Tesla’s ‘Gigafactory’

RENO, Nev. — It’s yet to be seen whether Nevada can cover what Tesla Motors says could be $400 million or more in the winning state’s share of the cost of its $4 billion-$5 billion battery “Gigafactory.”

The decision now rests with the Silver State’s Legislature, which could be called into special session on the issue.

State officials, watchful of other competitors in the running like Texas and California with immensely more financial might, are saying little since Tesla on July 31 disclosed the graded pad at the Tahoe Reno Industrial Center, making Nevada a finalist for the coveted lithium-ion battery plant.

“We are still in a position where we are having ongoing negotiations and discussions. Our conversations with the company (Tesla) continue. Outside of that, no comment,” said Steve Hill, executive director of the Governor’s Office of Economic Development, the lead agency in Nevada’s quest.

Tesla, the electric car maker, wants to build one of the country’s largest battery factories to make cells for a planned next-generation car. it is partnering with Panasonic in what it calls the Gigafactory, expected to create 6,500 jobs in a building as big as 10 million square feet. Meantime, the pad in Storey County, outside of Reno, sits while Nevada works behind closed doors to fill it.

State economic development laws allow several incentive programs from personal property, sales and business tax abatements to sales tax deferrals, according to a Legislative Counsel Bureau report earlier this year.

Any changes or additions would require legislative action, and Nevada’s biennial Legislature won’t convene again until Feb. 2, 2015.

That appears beyond Tesla’s timetable.

CEO Elon Musk, speaking on July 31 to Wall Street analysts, said he expects the winning state to cover “maybe 10%” of the gigafactory’s cost — the $4 billion-$5 billion figure is the cost through 2020 — and grading will be done in one or two other states with a final site selected “in the next few months.”

Given that time frame, it would take a special legislative session to make statutory changes aimed at the Gigafactory. On that question, Republican Gov. Brian Sandoval, who by law is the sole authority to call a special session and set the agenda, refuses to comment.

But not all legislators are in favor. Assembly Speaker Marilyn Kirkpatrick, a Democrat from North Las Vegas, isn’t sold on a special session.

“We are constrained by the Constitution to just give money. We don’t have a checkbook such as Texas has. A special session does us no good,” she said.

She also cited concerns about the cost of a special session that, according to Legislative Counsel Bureau Director Rick Combs, typically can run $25,000 to $40,000 a day.

In the quest for Tesla’s Gigafactory, “I believe we could probably get together a great package of incentives, unique opportunities in Nevada other states don’t have,” Kirkpatrick said, citing lower taxes and job-injury insurance costs, quality of life and speedy permitting.

“We’re within the discussion,” she said. “I believe the state is willing to put everything we have available on the table. I hope that will be enough. In the end, we’ll prevail. That’s my hope. (Tesla) will just have to choose.”

Bill O’Driscoll, Reno Gazette Journal

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