Lawmakers Seal $335-Million Deal To Snag Electric Carmaker Faraday Future
Christmas came early for electric carmaker Faraday Future after Nevada lawmakers approved a $335-million incentive package over the weekend. The deal is meant to breathe life into a recession-battered part of Southern Nevada.
The package clears the way for Faraday Future to begin work on a $1 billion manufacturing plant in North Las Vegas, an area Mayor John Lee says has been starved for development.
“This gives our city a chance to now once again help get our constituents and residents back up to speed,” says Lee. “But [it] also allows a major economic shift in all of southern Nevada, as we shift away from gaming, tourism and hospitality.”
He says the legislation is less about Faraday and more about opening up the APEX industrial site, now just a stretch of desert, to new opportunities.
“Whether Faraday comes or not, I’ve got four or five other big things coming right behind us that have been waiting for this water application. Faraday is a huge attractor, but the water was the biggest attractor of all to this area.”
Water for the planned site was one of the biggest hang-ups for lawmakers as they tried to reach consensus over the four-day special session.
After days of intensive negotiations, both the senate and assembly approved four bills, two of which dealt with water. The compromise will supply Faraday with groundwater quickly without tampering with existing water law.
Gov. Brian Sandoval says this continues an assertive effort by his administration to diversify the state’s economy.
“We’ve brought Tesla to Northern Nevada, we’re bringing Faraday Future to Southern Nevada, we have the largest data center in the country — the Hyperloop is coming to Southern Nevada, so we’re really excited,” he says. “And that’s what we do mean by the ‘New Nevada’ — is that it’s innovative and very creative.”
Faraday will get about $200 million in tax abatements and $115 million in infrastructure upgrades at the site.
It was a little more than a year ago that lawmakers approved the biggest tax package in the state’s history for the Tesla gigafactory, now under construction outside of Reno.
That deal passed unanimously in a mere two-day special session — far smoother than this go-around.
The Faraday package faced more skepticism and exposed some curious rifts within the Republican caucus, with a few conservative lawmakers who supported the $1 billion tax deal for Tesla coming out in opposition to Faraday.
“Why would I change [my vote]?”
That’s Republican Assembleyman Ira Hansen, one of five lawmakers who voted against the deal. He says his objections come down to questions about the company’s viability.
“Would I, if it was my own money, feel comfortable investing in Faraday? The answer is no. It’s a sole proprietor; he could literally pull up stakes tomorrow and be gone. Tesla has to answer to a board of directors. It’s an American company. Substantially different than Faraday.”
Officials admit the investment has its risks. Faraday has yet to bring a car to market, but plans to unveil its first model next month at a trade show in Las Vegas.
Despite these concerns, Gov. Sandoval says….
“At the end of the day, it’s all about jobs.”
The company says it will employ about 4,500 people, half of whom will be local residents.
To that end, lawmakers approved about $2.5 million toward a revamped workforce development program to make Nevada’s labor pool more competitive.
The initiative will allow new businesses to partner with the Governor’s Office of Economic Development to come up with customized training programs.
Vegas-based political analyst Jon Ralston, speaking to KNPR, says he predicts more deals like it in Nevada’s future.
“Why would any company come here without asking for incentives based on history?” he says. “Of course they will not. …This is the new world now. If you are state trying to attract business, trying to play in the economic development and diversification game, you have to offer these incentives.”
State officials say there’s a lot of potential in both Southern and Northern Nevada thanks to anchor tenants like Faraday and Tesla. Sandoval says he expects announcements soon on other big technology companies looking to make Nevada their new home.