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August 22, 2019

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Did Tesla Motors open doors for Apex industrial park?

Potential employment by industry

If Apex were fully developed and leased, the following number of jobs could be created:

• 8,285: Aircraft manufacturing

• 1,480: Data processing, hosting and related services

• 29,195: Machinery manufacturing

• 12,667: Warehousing and storage

• 6,333: Wholesale trade

What they stand to gain

Tax incentives for businesses that locate in the economic diversification district at Apex include:

• 100 percent sales tax abatement until 2034

• 100 percent real property tax abatement until 2024

• 100 percent personal property tax abatement until 2024

• 100 percent modified business tax abatement until 2024

• Transferable tax credits worth $12,500 for each permanent full-time job, to a maximum of 6,000 jobs

• Transferable 5 percent tax credit for first $1 billion invested and 2.8 percent tax credit for next $2.5 billion invested

Since opening more than 20 years ago, Apex Industrial Park has found itself stuck. Businesses are reluctant to locate there because there’s not enough water to support manufacturing and other heavy industry. But because the site is mostly empty, no one has been willing to build a water pipeline.

That soon could change, thanks to Tesla Motors.

North Las Vegas leaders plan to offer huge property and sales tax breaks — made possible by legislation passed in September for Tesla — to lure two or three large companies to Apex. The hope is the companies will provide the investment needed to finally build infrastructure to provide water and power to the full site, breaking the stalemate and unlocking a potential economic boon.

The plan isn’t without risks. The infrastructure will cost $150 million, and it’s unclear who will foot the bill. Despite ongoing negotiations with the city, no companies have announced they’re moving in.

But the potential for tens of thousands of jobs and hundreds of millions in new tax revenue is an opportunity too good to pass up for a city that flirted with insolvency this year.

“It’s ambitious, but it’s also smart,” said Ryann Juden, North Las Vegas Mayor John Lee’s chief of staff. “It’s a very good application of what’s already a good policy. It’s not just important to North Las Vegas, it’s important to the entire state.”

The history

After an explosion at a Henderson chemical plant in 1988 killed two workers and injured hundreds, local leaders began looking for a new, remote site for chemical manufacturers, landfills, power plants and other operations that are needed in a city but aren’t necessarily embraced as neighbors.

Their solution was Apex, formed when Clark County bought 21,000 acres of land 20 miles northwest of downtown Las Vegas. Only 7,000 of the acres are developable, with the rest unusable because of hilly terrain. Still, it’s one of the largest contiguous pieces of land for industrial and manufacturing development in the Southwest.

Today, the site is part of North Las Vegas but remains mostly empty, with fewer than 10 tenants.

The plan

North Las Vegas plans to establish an economic diversification district on 800 acres of Apex. Businesses that locate inside the district and invest a combined $3.5 billion will qualify for tax breaks, including no sales tax for 20 years and no property or business taxes for 10 years.

For Tesla, such tax breaks are expected to be worth about $1.3 billion, a good comparison for what businesses at Apex might expect to save.

If city leaders can lure a few key companies to Apex’s tax-free zone, they can make a case for building the $150 million in infrastructure needed to provide water, electricity and gas to the site. Doing so would open 6,000 acres of developable land to other businesses, which wouldn’t qualify for tax breaks but still would be in an attractive location because of the site’s large size and proximity to Interstate 15 and railways.

Medical marijuana

Even before the latest plan emerged, city leaders were positioning Apex as a hot spot for the budding medical marijuana industry.

City officials made it cheaper for growers and producers to locate at Apex than anywhere else in the valley. Opening a grow facility at Apex costs a one-time $30,000 fee, compared with a $35,000 annual fee for growers elsewhere in North Las Vegas. As a result, 35 medical marijuana companies have applied to open there.

The impact

If Apex is fully built out, it would create 57,960 new jobs and generate $670 million annually in local and state taxes, researchers at Brookings Mountain West found.

That won’t happen for decades, but even a fraction of the jobs and revenue would have a major effect on the region’s economy.

Apex’s development also would provide much-needed economic diversification outside the tourism and gaming industries. City officials say aircraft manufacturers, general manufacturers, warehousing and storage businesses, and wholesale traders all could find a home at Apex.

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