Thursday, April 13, 2000 | 11:51 a.m.
The Nevada Commission on Economic Development declined to award a $79,000 tax break to a Las Vegas newspaper publisher Wednesday, after two commissioners weren't convinced its printing contract with USA Today would create the kind of high-wage jobs that incentives are supposed to attract.
Las Vegas Press was seeking an abatement on taxes for its $1.5 million investment in a press. Gannett, publisher of USA Today, plans to invest up to $9 million on its own in the press, but was not seeking incentives for its investment.
Las Vegas Press also publishes three newspapers in the Las Vegas area -- the Las Vegas Business Press, Las Vegas CityLife and the Las Vegas Senior Press.
Gannett plans to distribute USA Today from Las Vegas across the Southwest; currently, those newspapers are shipped to Las Vegas from San Bernardino, Calif. Later, the press will be used by the company to attract printing jobs from across the country and the world, Las Vegas Press officials said.
Fourteen jobs will be created by the new press, with the potential for more than 50 in coming years, said Las Vegas Press Publisher Rod Smith. USA Today's printing needs will grow along with Las Vegas and the Southwest, he said, and new contracts could be brought in from around the country.
But commissioners were concerned with the average wage of those jobs -- $14.06 per hour, just below the state's average wage of $14.12.
"We're required to act on applications that meet 100 percent of the wage rate, and you don't," said Berlyn Miller, vice chairman of the commission. "So I can't approve this application.
"I can't see giving an abatement for 14 jobs at the kind of (wage) rate I don't think we should be giving out abatements for."
Even if the application crossed the $14.12 per hour threshold, Miller said he would have difficulty supporting it, since the jobs were being created in the vibrant Clark County community and wouldn't help push average wages upward.
Smith said the wage data was about one year old, and would probably be increased to around $15 to $16 per hour. Moreover, he said, 10 of the 14 jobs initially created would pay wages well above the state's average, going as high as $75,000 per year.
"Frankly, we'll print our newspaper here whether we get this or not," Smith said. "There's a 99 percent chance we'll print USA Today. But our intent is to bring business into Southern Nevada. There's not comparable equipment to this in Nevada now."
Miller and Commissioner Lynn Atcheson voted to deny the application, while only Commissioner Leroy Goodman voted for approval. But Goodman's affirmative vote meant the application couldn't be denied outright.
As early as next month, Las Vegas Press will be allowed to resubmit its application with updated wage data.
A tax deferral was approved for the company, but the size of that deferral will depend on whether the abatement is approved. If the abatement is approved, about $30,000 in taxes will be deferred; if not, it will be eligible to put off about $108,000 in tax payments.
The commission also put off a decision on awarding about $378,000 in training funds to Ford Motor Credit Co., which is placing a 550-employee call center in Henderson. The 110,000-square-foot center is slated to begin hiring by September.
The commission had no problem with the average wage proposed by Ford Credit -- $16.89 per hour, well above the state's average. But with only $201,000 in training funds left until June 30, granting even part of Ford Credit's request would have completely depleted the state's training incentive pool.
"I'm hesitant to give the entire $200,000 to one company," Miller said. "I would prefer to delay the application ... we want to make sure these training dollars go toward the companies that will best benefit our workforce. Other companies today are paying considerably higher than your wage scale."
Since training wouldn't begin until at least August, Ford Credit agreed to defer its application until after July 1, when the commission would receive an additional $500,000 for its training budget.
A possible sticking point for the company may be the conditions of its request. Training is usually handled through community colleges, with the commission reimbursing the colleges' costs. But, in an unusual maneuver, Ford Credit asked for those funds to be sent directly to the company so it could handle training in-house.
Ford Credit said its training had to be handled directly through the company, since much of the training involved proprietary software systems.
"It's difficult for someone else to do that (offer training) without having employees getting caught up in details that don't apply to them," said John Strang, vice president of administration for Ford Credit.
It could also prove difficult to convince the commission to give such a huge chunk of its annual training budget to one company. Bob Shriver, executive director of the commission, said he couldn't recall commissioners ever awarding one company such a large training incentive.
Commissioners urged Ford Credit to work in at least some of its training budget request through the community college system before returning in August.
Lear Entertainment, a company currently building a movie filming complex in Las Vegas, was the third local company to apply for incentives from the commission Wednesday. However, the company withdrew its application for $50,000 in tax incentives shortly before the commission met.
Jim Petty, vice president of operations and a minority partner in Lear Entertainment, said the withdrawal wasn't based on disagreements with the commission. Instead, he said, the company felt the auditing process required for the tax incentive far outweighed its financial benefits.
"We felt it became too complicated," Petty said. "The money we would save would be used up in manpower preparing these reports."
The withdrawal, however, doesn't indicate the Lear Entertainment project is off. In fact, Petty said, the company plans to double the $13 million investment it told the commission it would make at the site. About half of its 166,000-square-foot building will be demolished and remade into state-of-the-art sound stages, Petty said.
"We are obtaining the rest of our financing now," Petty said. "If the financing goes well, we should have it (open) by the end of August.
"We're receiving numerous inquiries and interest in productions that want to come here. We're losing money by not being open."
In other actions Wednesday, the commission:
TRW will research new, safer explosive propellants for use in automobile airbags.
However, the commission postponed a decision on a $206,000 personal property tax abatement requested by TRW after Storey County officials objected that the county could not afford to take such a tax hit. Unlike the other incentives awarded by the commission, the property tax abatement would come directly from the county's budget. TRW will re-apply next month after negotiating with Storey County officials.
Solntec will start with 25 employees, and could expand to more than 150 in the next five years, company officials said. The average wage is a high $31.75 per hour, a figure that made Solntec's request pass with little debate.
"I would say you're the ideal candidate for these type of incentives," Lt. Gov. Lorraine Hunt said.
Medallic is a private minting company that produces medals for some of the nation's most prestigious awards, including the Pulitzer Prize. Although the press purchase won't result in any additional jobs immediately -- and the average wage is only slightly above the state's average, at $14.16 per hour, the commission approved the application because wages were far above the $11.86 per hour average for Lyon County.
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