Faraday deal will spur new era of economic opportunity here

By Robert Lang and William Brown

Sunday, Dec. 27, 2015 | 2 a.m.

“Apex” is defined as a high point or summit. Thanks to the recent special session of the Legislature, North Las Vegas and Southern Nevada have reached a high point few could have imagined only months ago with the state’s decision to develop needed infrastructure at the sprawling but mostly barren Apex Industrial Park, as well as to provide enticements so Faraday Future can build an electric car manufacturing plant there.

The challenge now, however, is not to view the recent economic diversification legislation as a summit, but as a new foundation, one that will spur a new era of economic opportunity in Southern Nevada.

Nevada has long experience with transformative infrastructure investment — and now the Apex Industrial Park joins that legacy. The Transcontinental Railroad in the 1860s and Hoover Dam in the 1930s, two of our nation’s most important works projects, opened Nevada and the West to unparalleled development.

In the past two years, Nevada has invested in two major economic diversification centers — the Tahoe Reno Industrial Center (in the north) and Apex (in the south). The special sessions that landed major manufacturers at these industrial parks were not solely about two companies — Tesla or Faraday Future — but also about the larger need to diversify our state’s economy. For Southern Nevada, Apex is the culmination of a 30-year effort to open the only large-scale advanced industrial site in the region. The interminable “chicken and egg” scenario — of businesses needing infrastructure before locating there and the region needing businesses to relocate there before providing infrastructure — is over.

North Las Vegas Mayor John Lee accomplished the unthinkable. Following his election in April 2013, Lee saw the consequences of the 2014 special session legislation (SB 1) that brought Tesla to Northern Nevada and chose to move quickly and decisively. He acted in a manner similar to many big-city mayors by providing a clear vision for his community’s future. Waiting for the federal government — or even state government — is no longer a viable option in an era of what the Brookings Institution calls “the metropolitan revolution.”

North Las Vegas analyzed the tax incentive structure of SB 1 and translated (literally) the document into multiple languages, including Mandarin, to solicit industries to his city. At the same time, North Las Vegas adopted the permitting and economic development practices of Storey County to position Apex and the city as proactive, business-friendly partners. For example, North Las Vegas reduced the red-tape exercise of permitting construction at Apex from months to an online form that could be completed in minutes.

Lee also sought outside economic analysis and counsel to strengthen the case for Apex. He found such support at UNLV, with Brookings Mountain West and the Greenspun College of Urban Affairs, in myself and fellow professor Jaewon Lim. In fall 2014, following the Tesla legislation, we generated an analysis of building out the 7,000 currently developable acres at Apex. The numbers proved impressive, showing that a fully occupied Apex could generate 52,960 direct jobs and 116,439 total jobs with an annual economic impact of $23.7 billion — or just over 20 percent of the region’s current GDP. This calculation did not factor an electric car manufacturer into the equation but did consider a mix of other industrial and distribution uses. Faraday Future increases the jobs and GDP numbers at Apex, as our May 2015 analysis on the car manufacturer’s economic impact showed.

The Legislature’s recent special meeting morphed from the “Faraday Session” to the “Apex Session.” That is the key reason the session took more than a predicted 20 hours. Crafting legislation to open up Apex and ensure the necessary infrastructure improvements and water access to the park was well worth the effort.

Finding a secure water supply became the key concern among legislators. There is good news. To support a Phase I opening of Apex only the delivery of groundwater in the Garnet Basin, fed by the snowpack on the nearby Sheep Range, is needed. That should allow time to properly address the pipeline-funding issue. The often-divisive politics of water led North Las Vegas to yield to the Southern Nevada Water Authority on its plan to lead the local water effort and the passage of SB 2, with carefully crafted language to control water transfers across local basins, passed the Legislature.

Apex will have about 1,700 acre-feet of water on site per year in Phase I. With that supply, North Las Vegas can develop some 2,000 acres at Apex, including the main Faraday Future facility at 300 acres and an additional 600 acres for affiliated firms (for comparison, the main UNLV campus consists of 332 acres and Sunset Park contains 323 acres). In time, water transfers from places such as Coyote Springs just north of Apex could deliver thousands more acre-feet of water per year and mitigate the short-term need for a Lake Mead pipeline.

In total, $175 million in infrastructure improvements are planned for Apex, with $35 million designated for water and the remainder allocated to road and rail upgrades.

The 2015 special session passed needed abatements to secure Faraday Future as an anchor tenant at Apex, but it accomplished much more. Legislators provided North Las Vegas the tools to make the promise of Apex a reality. In the process, Southern Nevada will take a bold step to diversify its regional economy.

In the coming year, several businesses will announce openings at Apex. The site’s proximity to a globally connected airport, as well as rail and interstate highway connections, make it a competitive location.

Metropolitan Las Vegas now moves into its next phase of economic maturity. Tourism gave Las Vegas the large-market scale and hyperconnectivity necessary to attract firms such as Faraday Future. Southern Nevada is now poised for a remarkable expansion as a more balanced export economy based on trade, business services and manufacturing emerges.

We thank the local and state leaders who gathered in Carson City a week before the holidays and hammered out the necessary legislation to bring Faraday Future to Southern Nevada. And thanks to Faraday Future for anchoring the transformation of Apex from open desert to a fully operational industrial park. We expect that Apex will now take technology to new heights.

Robert Lang is executive director and William Brown is the UNLV director of Brookings Mountain West.