An investigative story by USA Today on the Tesla gigafactory near Reno offers a sobering lesson for Nevada leaders. It shows why the state should steer such massive projects to Southern Nevada if possible, considering our region boasts far more infrastructure to handle them.
The story, published last week, describes in great detail how the plant has overtaxed the Reno area — its roads, its emergency responders, its housing market, etc. — in the five years since state lawmakers lured the company to Nevada with a $1.3 billion tax abatement.
“State and local governments were ill-prepared for those consequences and, because of the tax abatements, had limited financial resources to address them,” the story said.
Those consequences could have easily been foreseen. The plant employs 7,000 people and is located in Storey County, which was home to a mere 4,000 people when the deal was cut. The county fire district had to open and staff a new station to cover to the plant, including accidents and medical emergencies there. Responders have been extremely busy, going to the plant 104 times last year.
Meanwhile, the facility has generated an epic housing crunch in the Reno/Sparks area, where most of the plant’s employees choose to live. The median home price is about $400,000, up from $240,000 in the spring of 2014. Rents skyrocketed to $1,316 from $876 in 2014.
Homelessness is rampant.
“The city’s only homeless shelter is chronically over capacity,” the story reads. “The weekly motels relied on as housing of last resort by 4,000 people are being torn down. The waiting list for housing assistance is so long that new names are no longer being added.”
Reno and Storey County are working to adapt, but it’s an uphill climb due to the abatements.
That being the case, Gov. Steve Sisolak should avoid the mistake of his predecessor on the Tesla plant location, and instead consider resource allocation/availability and long-term consequences as a part of every project analysis going forward.
That’s not to suggest Tesla was a bad investment for Nevada. It certainly wasn’t, as it put us on the map to attract other high-level companies and diversify a state economy that had relied far too heavily on tourism, gaming and mining.
But the story magnifies why Southern Nevada is far better suited to host such facilities. Our fire and police departments are far larger and better staffed, our road infrastructure is far more extensive and we are more capable of adding housing. Another major plus is McCarran International Airport, which offers nonstop flights to most major American cities and offers a huge benefit for businesses locating here.
Assets like these are why we’re able to bring on a project like Genting Resorts World, which will employ about 3,000 people once completed.
But that said, there’s another lesson to be learned from the USA Today story, this one specifically for Southern Nevada leaders. To prime the state for future opportunities on the scale of the Tesla plant, we need to lay several key pieces of groundwork.
Among our more critical needs in this area:
• More affordable housing. Rising rents and sales prices of homes have created a looming crisis in housing affordability for our community’s service industry workers and other working families. These workers are the backbone of our economy, so it’s essential that we provide relief.
• A light-rail system to reduce traffic congestion, improve our visitor experience and provide a convenient and inexpensive way for workers to get to and from the Strip.
• A fully built-out UNLV School of Medicine, which requires a new instructional building. To help meet the demand for health care providers in the region, it’s critical for the school to reach its intended capacity of 180 students per class. It’s currently at 60 per class.
There are many more needs, including more funding for our regional colleges and for the Clark County School District.
But as shown by Reno’s experience with Tesla, addressing those needs now will prepare us for the kind of economic development our region and our state need to continue diversifying our economy.