Las Vegas Sun

March 28, 2024

State’s economic chief assures lawmakers on Faraday’s progress

2017 North Las Vegas State of the City

Steve Marcus

The Faraday Future FF91 concept car is displayed before the North Las Vegas “State of the City” address at Aliante in North Las Vegas Thursday, Jan. 26, 2017.

Despite questions surrounding the financial health of Faraday Future, the company has invested a considerable amount in its Southern Nevada plant, according to Steve Hill, executive director with the Governor’s Office of Economic Development.

Faraday has invested $160 million on its North Las Vegas manufacturing project, beginning work on phases one and two of Stage 1 of its manufacturing project, Hill said.

The bulk of that money has gone to purchasing and grading the land and placing infrastructure. Engineering work has totaled about $10 million. An additional $40 million has been made in deposits on equipment that will ultimately be on the site, Hill told a joint meeting of the Assembly Committee on Taxation and the Senate Committee on Revenue and Economic Development in Carson City on Thursday evening.

Work halted on the site in November, a stoppage the company attributed to focusing on directing money and attention to developing its concept car, the FF91, which it debuted at the Consumer Electronics Show last month.

The company announced it entered the competitive bidding process for the second phase of the Stage 1 manufacturing project earlier this month. Faraday officials said they have five proposals from U.S. and international contractors and hoped to restart construction “soon.”

Gov. Brian Sandoval called a special legislative session in 2015 to approve $215 million in tax breaks and $120 million in infrastructure improvements to the Faraday site.

Hill reiterated the protective measures the state took while approving the tax abatements for Faraday.

“A requirement in SB1 was that Faraday must invest at least $1 billion on the site within 10 years in order to be eligible for the abatement and incentives that go along with that investment,” he said.

To do so, the Legislature developed a new concept in the law, which added a trust fund element. Portions of abatements that may be earned once that $1 billion threshold was met were put into that bill. Faraday agreed to have all of the sales tax in the abatement go into the trust fund out of the concern of achieving that $1 billion threshold.

Faraday has incurred $393,406 to date that has been placed into the trust fund — $297,921 from sales and use tax and $95,485 from real property tax. Faraday has earned $4,522 directly to date from nontrust fund taxation.

Touching on the progress Faraday has made, Hill said that the company installed enough infrastructure for the first phase of operation, which includes all of the water infrastructure, part of the storm water drainage system that is necessary for the project.

A railway was originally discussed as part of the infrastructure, but after going through more studies it was concluded that rail was not needed. Faraday’s portion of the infrastructure, which was about $75 million, has been reduced to about $45 million.

Faraday plans to start construction on Phase 2 of Stage 1 soon, which is a 600,000-square-foot manufacturing plant that will be able to produce about 10,000 cars a year.

“It will expedite their manufacturing process to get cars out the door to customers a little more quickly,” Hill said.

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