Tesla “Gigafactory” in Reno, Nevada
In Q3 of last year, I wrote an article in Area Development magazine describing a major project underway in Reno, Nevada: The Tesla “Gigafactory”. Picked by Tesla to host its $5 billion factory, state officials offered a sizable incentive package to attract Tesla to Nevada rather than sites elsewhere in the United States. While “game changer” is a term that’s been casually thrown around recently, it’s certainly not an inaccurate way to describe this project’s potential economic impact.
Here are some excerpts from that article:
On the economic impact for Reno:
“The economic impacts are substantial: 6,500 direct jobs, an estimated 16,000 spin-off jobs, and a $100 billion economic impact over 20 years — which will add a 20 percent boost to Reno’s economy, according to the Governor’s Office for Economic Development.”
On the incentive package offered by Nevada:
“To win the Tesla project, the state offered the richest incentive package in its history — estimated at $1.25 billion, which drew criticism from the conservative Nevada Policy Research Institute and the liberal Progressive Leadership Alliance at the local level, and Richard Florida and Good Jobs First at the national level. Nevertheless, the Nevada legislature unanimously approved the incentive package in a two-day special session. When compared to the packages offered by other states for mega-projects, the per-job incentives are at the lower end of the scale.”
Tesla’s reasoning for the selection:
“….Tesla’s CEO Elon Musk cited speed of permitting and the agility of the state and local officials as the primary reasons for selecting Nevada. The proximity of Reno to Tesla’s vehicle plant in Northern California and Nevada’s renewable energy portfolio also factored into the decision, as well as the nearby Lake Tahoe area which is familiar to many of Tesla’s executives.”
The Nevada package consisted mostly of performance-based tax abatements and credits that reduce the state’s risk if projections about the project turn out to be too optimistic. Tesla is required to invest $3.5 billion in the state before any of the tax abatements kick in, and has agreed to donate $37 million to Nevada schools over the next five years.
On the evolution of Reno:
“…Reno has evolved into a city that attracts well-educated, sophisticated residents. Board members and former CEOs of several Fortune 500 companies now call Reno home. The downtown has undergone a major renovation. Bike lanes crisscross the city. The Truckee River Whitewater Park is located in the heart of the downtown. To be sure, gaming is still an important part of the Reno scene — but it no longer monopolizes the economy. In fact, one of the largest employers in Reno is the University of Nevada, and innovative schools, such as the Academy of Arts, Careers and Technology, are putting a laser focus on preparing students for high-tech careers.”
Click here to access a PDF of the full article by Dennis Cuneo.