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March 24, 2017

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ANALYSIS:

Confident, or in denial? NLV mayor says Faraday plant ‘will be built’

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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.

2017 North Las Vegas State of the City

North Las Vegas Mayor John Lee gives the Launch slideshow »

After watching a stylized video about Faraday Future during his State of the City address, North Las Vegas Mayor John Lee made a joke at the expense of Henderson Mayor Andy Hafen.

It went something like this: Congratulations on that new Chick-fil-A, Andy.

Hafen didn’t crack back — or if he did, it wasn’t loud enough to make it to the back of the room — but he easily could have by reminding Lee that while people were buying chicken sandwiches made in Henderson, nobody’s buying cars made in North Las Vegas.

Click to enlarge photo

North Las Vegas Mayor John Lee, third from left, poses with guests in front of the Faraday Future FF91 concept car before the "State of the City" address at Aliante in North Las Vegas Thursday, Jan. 26, 2017.

So what’s up with Faraday? With the exception of whether the Oakland Raiders are going to relocate to Las Vegas, that’s possibly the most-asked question in the valley.

By listening to Lee’s address on Thursday and watching the video, which identified the Faraday site as “the exact location of the future,” you’d believe it was smooth sailing for the Chinese automotive upstart. The company even parked one of its new electric vehicles, the FF91, in the hallway outside of the Aliante resort ballroom where Lee presented his speech.

“Faraday has already finished the first phase of construction on their manufacturing plant at Apex,” Lee said. “Just last week, their parent company secured an additional $2.18 billion in funding to keep the project moving ahead at its record pace. Now this is some serious action!”

So no problems, right?

Well, maybe not from Lee’s perspective, but others have a different view.

Take this (lengthy) Jan. 18 headline from Business Insider: “Faraday Future, once seen as a ‘Tesla killer,’ is said to be in a shambles as cash runs low and executives flee.” The story offered a partial list of executives who had left the company and cited a quote from Faraday's most visible investor, LeEco CEO Jia Yueting, in saying the $2.18 billion infusion to the parent company wouldn’t help the car company.

Asked after his speech how he felt about stories like that, Lee said they were immaterial.

“I’m not the least bit concerned,” he said. “I can tell you right now: This will be built.”

Lee said the company was racing ahead to take advantage of a surge in Chinese consumers purchasing vehicles, a trend brought on by rising personal wealth and development of roads in that nation. Environmental problems associated with greenhouse gas emissions would increase demand for the kind of electric vehicles Faraday plans to manufacture, he said.

Lee likened doubts about Faraday to the gloomy forecasts he read about North Las Vegas before he was elected in April 2013. Two years earlier, a third of North Las Vegas’ homes were in foreclosure and the city had completed more than 1,000 job cuts to avoid insolvency.

“I guess if I’d listened to people, I never would have run for mayor,” he said.

Lee did run, of course, and since then North Las Vegas has bounced back. In the past year alone, the city had added 16,000 jobs, 12.5 million feet of manufacturing and warehousing space and $2 billion in capital investment.

The city has recruited a half-dozen Fortune 500 companies, and developers are scheduled to break ground in March on a $100 million, 35-acre mixed-use project at Cheyenne Avenue and Commerce Street. Along with upcoming infrastructure improvements and innovative programs like a self-certification process to cut the time of construction permitting to as little as four days, Lee has some reason to say “we’re not a turnaround town anymore.”

The upshot: Lee saw promise in 2013 when most people saw little or none. So when he sees a future for a car company that some people have written off, it’s hard to write him off.

For Las Vegas Valley residents, maybe the right outlook on Faraday is the one Lee adopted about the city his early goings as mayor. He described himself then as a “skeptimist” — skeptical about the possibility of North Las Vegas turning around, but also optimistic about it.

One thing’s for sure. If Faraday comes through as planned, with 4,500 permanent jobs and $87 billion in economic impact over 20 years, it will have a lot more effect on the valley than a chain that sells chicken sandwiches.

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