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March 28, 2024

Legislators overwhelmingly approve $335M deal to bring Faraday to NLV

Updated Saturday, Dec. 19, 2015 | 5:29 p.m.

Gov. Brian Sandoval has signed a four bills as part of a $335 million tax package to lure Faraday Future to North Las Vegas, calling today a “historic day.”

The Assembly, amid some grumbling by a small minority, earlier today approved three bills that would send tax breaks paving the way for the electric car manufacturer to move to Southern Nevada.

The three-bill package was approved 37-4. The vote wrapped up a four-day special session, and Gov. Brian Sandoval is set to sign the bills.

The Senate had already passed AB1, which provides $2.5 million for training for high-skilled jobs. Democratic Minority Leader Irene Bustamante Adams, D-Las Vegas, called the bill an opportunity to create jobs. Majority Leader Paul Anderson, R-Las Vegas, said AB1 will bring $85 billion in benefits.

Faraday will receive abatements on sales-and-use taxes for 15 years and the modified business tax for 10 years.

Administration officials praised the package as “incentives to create a new Nevada.”

Faraday envisions employing 4,500 people in the next nine years at an average salary of $22 an hour; entry-level workers will earn $15-$17 an hour. And 50 percent of the jobs will go to people who have lived in Nevada for 60 days. Veterans will be hired without the 60-day requirements if they have a driver’s license.

Faraday will put these tax savings in a trust fund, and the money will not be released until the company spends $1 billion. The company also has pledged to donate $1 million a year to the Clark County School District starting in 2018.

The state Department of Transportation will spend $50 million to widen the highway and build better access to the Apex Industrial Park. Special districts will be created to spend sell $175 million in bonds for infrastructure at the site.

The bonds will be for a rail-line unit, electricity, flood control and other needs for the park. The bonds will be paid off from the increased revenues created by the districts. If there is not enough revenue to make the payment on the bonds, North Las Vegas will have to start to retire them; the bonds are backed by the full faith and credit of the state.

Under SB3 the Southern Nevada Water Authority will supply 1,700 acre-feet to Faraday. A compromise was reached for North Las Vegas to give the Water Authority the rights. The agreement will be reviewed in 2021.

SB2 sets in motion the process for the state to speed up water rights for this project.

Water rates for citizens of North Las Vegas and the surrounding cities will not be increased as part of the agreement with the Water Authority.

Faraday has not yet built its electric car but plans to unveil a model at the auto show next year in Las Vegas.

Opposing the measures were Ira Hansen, R-Sparks; Robin Titus, R-Wellington; Shelly Shelton, R-Las Vegas; and Brent Jones, R-Las Vegas.

Hansen complained Nevada was giving a large subsidy to a Chinese company that will compete with American-owned Tesla.

But Assemblywoman Michelle Fiore, R-Las Vegas, said Faraday is an American company and that Nevada has to diversify.

Shelton said the Nevada Constitution prohibits the state from investing in private companies. Sandoval officials countered that there are many instances in which the state provides these incentives.

North Las Vegas Mayor John Lee, meanwhile, called the tax package a “game changer” that will shift Southern Nevada's economy. His comment came shortly before the governor signed the bills in the old Assembly Chambers of the State Capitol.

“We had to come together,” he told an assembled crowd of about 75 people. He singled out AB1, which provides $2.5 million to start training programs to prepare workers.

Sandoval said Apex Industrial Park is mostly vacant and predicted that “We won’t be able to recognize it 10 years from now.”

The location of Faraday and development of the industrial park “is the salvation of North Las Vegas,” Lee said of his city, which was hard-hit during the recession.

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