"Play Long Ball"

Did you hear? Everything is coming up roses! We will be greeted as liberators! Just take a look on the bright side of life! And no matter what, always make sure to admire the bright & sunny "optics".

Last week, the mantra was supposed to be, "Ratification is different from rubber-stamping." But now that Tesla secured the deal it always wanted from Carson City, even the media pundit who uttered those words before the 28th Special Session of the Nevada Legislature is now upset because some legislators didnt rubber-stamp the Tesla deal quickly enough.

Wait, what?! Sadly, even some highly esteemed leaders of the Fourth Estate have caught #Teslamania.



Last week, The Atlantic's CityLab Editor-at-Large, Richard Florida, tried to warn those in Carson City of the risks of placing all of Nevada taxpayers' eggs in one "economic development" basket. And now, Los Angeles Times business columnist Michael Hiltzik is essentially calling our state's leaders "suckers" for approving the Tesla deal so quickly without analyzing the true cost of all the giveaways Tesla demanded along with the possibly way-too-rosy economic forecasts from the Governor's Office. Oh, and Good Jobs First continues to question the wisdom of allowing such a profitable company to operate in Nevada completely tax free for the next decade.

A cool $195 million is already leaving the state's coffers for Tesla corporate headquarters. And that's while Northern Nevada local authorities are just starting to realize the strain on local infrastructure that they just agreed to. How will we pay for the new roads and schools in Washoe, Storey, & Lyon Counties? And how will this affect state funding for the already overcrowded Clark County School District (CCSD), the already overburdened Southern Nevada transportation system, and still-in-need-of-some-TLC Southern Nevada economy?

Yesterday, the above mentioned media pundit used his Sunday Column to chide all the "ivory tower know-nothings and southern partisans" who dared to question Governor Brian Sandoval's (R) "play long ball"/"swing for the fences" strategy. Oh, really? What in any of this deal is "long ball"? How did Sandoval's "economic development team" "swing for the fences" by agreeing to the same old corporate welfare that this state has always tried to use to "diversify our economy"? How's that working out for us? The only difference this time is that the Tesla corporate welfare package is 14 times greater than the previous record setting Nevada corporate welfare package (cough- Apple -cough).

Look, we know Tesla likely has a bright future ahead. We even realize Tesla's potential role in a climate change/clean energy/human survival breakthrough. We can't understate the promise of the ground Tesla broke in Storey County.

We're just wondering why we're once again trying to substitute short sighted corporate welfare for long sighted economic planning. If we truly care about the well being of our state and our people, we know how to secure a far better bang for our buck. Yet in order for us to score this kind of real "long ball" deal, we'll need to approve it ourselves.

Done Deal: The #Teslamania Postscript

It's official. It's happening. And it's unanimous.

Late last night, the Nevada Legislature unanimously passed the Tesla deal. Governor Brian Sandoval (R) quickly signed it into law as US Senator Harry Reid (D) signaled his approval from DC.



Ultimately, Tesla got the $1.25 billion in tax credits it wanted. However, the final bill was slightly modified to ensure Tesla factory workers receive decent wages and health insurance benefits. The final bill also included more oversight should Tesla request a waiver for the 50% Nevada workers hiring requirement.

So it's a done deal. A bunch of legislators and media pundits are smiling as they await their return flights to Las Vegas. And of course, Tesla executives must be grinning from ear to ear this morning.



But what about all the rest of us? After the State Senate wrapped up their voting, they had just enough time for a few speeches. And yes, a handful of Senators actually addressed the 900 pound gorilla in the room.

Senator Tick Segerblom (D-Las Vegas) went even further in addressing the problem... And the solution. He pretty much channeled "The Original Gleaner" Hugh Jackson in pointing out the obvious. Why is it so damned easy for our state government to hand out corporate welfare like candy while failing repeatedly to properly fund public education?



It's a done deal. Tesla just got its sweetheart deal... But what about the rest of us? Where's our sweetheart deal?

Here's what isn't yet a done deal: this year's election. In particular, we have our solution: The Education Initiative (TEI). As Senator Segerblom and Hugh Jackson yesterday, we need to secure a good deal for our communities by making it happen ourselves.

Not. So. Fast.

Now, it's getting really interesting. Last night, we heard some more about the big move Switch is making in Carson City during the special session of the Nevada Legislature that Tesla initially thought it had all to itself.

Whoops. Apparently, a few legislators may actually be taking Steve Sebelius' advice to heart. Might this be music to Switch's ears?



Not so fast. SB 1 finally dropped last night, and the long awaited Senate bill requires at least $3.5 billion investment in this state before the state government starts offering tax incentives. The bill also requires at least 50% of the workers hired under this program to be Nevada residents. And the bill requires a $22 average hourly wage and health insurance benefits for factory workers.

So that leaves Switch up in the air for now. However, that also leaves the Nevada AFL-CIO as a possible "fly in the ointment". Nevada AFL-CIO Executive Director Danny Thompson has already said he also wants guarantees of fair wages for construction workers alongside guarantees that Tesla will hire local construction workers. We'll have to see how the Legislature assuages AFL's concerns.

But at least for now, it looks like a number of legislators are at least taking some time to digest this. And yes, they're looking at related issues like Switch, the best interest of Nevada workers, the film industry tax credits (that Governor Brian Sandoval [R] wants slashed by over 80%), and public education funding. Isn't this what so many of us were asking them to do? Isn't this even what a certain media pundit was asking for on the eve of #Teslamania?

So why is that media pundit now attacking certain legislators over taking their time to consider this proposal? The State of Nevada may actually end up with a $120 million deficit by the end of the year... And that doesn't even count the overcrowding and under-staffing issues plaguing Clark County School District (CCSD). Can we now afford to hurry up and pass something that pokes yet another hole into the budget while making a big bet on a company that demanded all these tax breaks to build a factory in Northern Nevada?



Not. So. Fast. Those are the three words Nevada legislators need to keep in mind today. While we understand the urge to hurry up, resume fundraising, and bask in the glow of #Teslamania, there are too many important questions that shouldn't be ignored just because one company wants an enormous sweetheart deal. Is this truly a fair deal? Is this a good deal for Nevada workers? Is this a good deal for Nevada schools? And will this deal break Nevada's budget?

Not. So. Fast. As we've said before, there are plenty of merits to Tesla's big move to Nevada. But must we break our bank in order to subsidize their business expenditures?

#Tesla Update(s)

And it's on! We knew this was eventually coming. But now, it's official. "The Tesla Session" is officially underway in Carson City.



And what have we learned since this morning? Perhaps there will be no Switch, after all?

Remember when we told you about the last minute move by the Southern Nevada data center company to land tax credits for a Nevada expansion? So far, Governor Brian Sandoval (R) is saying no. It remains to be seen how many allies Switch has in the Legislature Building.

In the mean time, Steve Sebelius notes the slippery slope this state will approach if the deal is approved. Why Tesla? Why Apple? Yet why not Switch? And why not any other company willing to tell us what we want to hear about "economic development"?

Also, PLAN made it official this morning. Folks there are concerned about the glossy numbers Governor Sandoval's office has released about the economic impact of Tesla's Gigafactory, as well as shifting the tax burden from Tesla to working families. Oh, and PLAN added this at the end: "One last question, which has been asked by others but only answered by silence: Why can’t the state of Nevada come together on a plan to raise revenues to fix our broken education system as enthusiastically as the rush to create a $1.3 billion package of corporate subsidies for a single company in one part of the state?" Ouch. (This is actually the reason why The Education Initiative [TEI] is on our fall ballot.)



At least now, we're starting to see the Tesla bills emerge. We're also continuing to see strong reviews for the very technology Tesla wants to bring to Northern Nevada. The Tesla Gigafactory may even end up producing 20% more renewable electricity than it actually needs.

The Guinn Center just endorsed the Tesla deal, provided there are benchmarks Tesla must meet in order to continue enjoying those tax credits. Reno News & Review's Dennis Myers, however, calls foul on what he sees as naked corporate welfare. And of course, NPRI is against anything that doesn't perfectly fit its ideological mold.

We probably won't have more #Tesla details until around 4:00 PM. We'll do our best to stay on top of it all. And if there's any critical breaking news tonight, we'll do our best to cover it here. So go ahead and stay tuned as #TeslaMania continues in Carson City.

Prelude to Tesla

Consider this a quick cheat sheet on "The Tesla Session" that will begin at high noon today in Carson City. Here's what you need to know about the 28th Special Session of the Nevada Legislature:

- The Tesla deal is now clocking in at about $1.3 billion cost to Nevada taxpayers.

- It still looks likely to be approved, but signs of discontent at the Legislature Building are starting to appear.

- Among those grumbling about Tesla are the "TEA" powered NPRI & AFP (fossil fuels forever!), progressive PLAN (worried about corporate welfare), car dealers (upset over the bill to authorize direct-to-consumer Tesla car sales), and the entertainment industry (Sorry, Nicholas Cage, but no more film tax credits for you!).

- Yet as Tesla keeps blazing trails in clean technology, Nevada now has the opportunity to lead the way in the clean energy (r)evolution.

- It's no secret that US Senator Harry Reid (D) pushed hard for this Tesla deal, as he's a big believer in the potential Tesla's gigafactory has to turbo-charge Nevada's economy.

- And he's not alone. From Northern Nevada business leaders to UNR & UNLV economists and state economic development officials, they're liking the $1.9 billion Tesla's gigafactory is expected to generate in tax revenue for the state, along with the roughly 21,000 jobs (directly and indirectly) that may result from Tesla's big move.

- But wait, there's more?! Perhaps Tesla won't have this special session all to itself. Last night, Jon Ralston reported that Enterprise (Southwest Las Vegas Valley) based Switch now wants to strike while the iron is hot. The data center company is now asking for its own tax credits for its proposed $750 million Southern Nevada facility and $250 million Northern Nevada project.

This is about to get even more interesting. Stay tuned here for more as the 28th Special Session of the Nevada Legislature commences.

"Ratification Is Different from Rubber-stamping."

No, we don't always agree with him. Yes, this only touches the surface of what's increasingly looking like an incredibly thorny issue. But yes, Jon Ralston's advice to state legislators on Tesla is very sound advice that they should pay attention to.



"Ratification is different from rubber-stamping." Just since the deal was announced last Thursday, the price tag has swollen from $400 million to $1.25 billion. Why? This gigafactory isn't cheap.

Ironically, Tahoe-Reno Industrial Center (& Mustang Ranch brothel) owner Lance Gilman claimed "no public money" has been used to develop Tahoe-Reno Industrial Center. Even if that statement was completely true last week, it certainly will not be going forward. If the Nevada Legislature approves the deal US Senator Harry Reid (D) encouraged and Governor Brian Sandoval's (R) economic advisers negotiated, Tesla will be exempt from paying sales taxes on construction materials and factory equipment for 20 years. That alone essentially serves as an estimated $725 million state subsidy for Tesla and Tahoe-Reno Industrial Center.



In addition, Tesla will receive $195 million worth of transferable tax credits along with $332 million worth of exemptions from property taxes. And on top of that, the State of Nevada will pay Lance Gilman $43 million for right-of-way so it can invest at least another $60 million to build a highway through Tahoe-Reno Industrial Center in order to connect the Tesla Gigafactory to US Highway 50 and Interstate 80 Freeway.

Oh, and this may not even be the end of it. Take a look at the growing list of registered lobbyists for the 28th Special Session of the Nevada Legislature. We can only wonder what may come next.

At least some legislators are demanding certain conditions for all these giveaways, such as guarantees for prevailing wage and Nevada workers being considered first for the new Tesla jobs. And quite a few legislators are insisting the tax credits will be tied to Tesla's progress in building the gigafactory (perhaps because they want to avoid another Apple boondoggle?).

Let's be upfront here. The reward will be quite high if this Tesla project succeeds. Nevada will have cemented our reputation as the hub of the 21st century clean energy revolution. And the Reno/Sparks/Tahoe region may finally have secured economic growth and diversification...

But at what cost? The Atlantic Senior Editor Richard Florida has already decried the $56,000-$300,000+ the State of Nevada may pay for each Tesla job that may or may not last into the distant future. Already, critics are accusing the state of overpaying for a "trophy". And opposition to the Tesla deal is already creating some very strange bedfellows, from the "TEA" powered NPRI and AFP to progressive stalwart PLAN.



"Ratification is different from rubber-stamping." At least one legislator seems to fully understand this. Pretty soon, we'll find out how many more also do... And/or how many simply don't.

Welcome, Tesla (?)

So it's official. It's finally happening. And of course, it's the talk of the town all over Reno.

Just moments ago, CNBC broke the news that Tesla has chosen Northern Nevada to house its new gigafactory. And already, a special session of the Nevada Legislature is being set for next week. And of course, we're already starting to hear all sorts of political spin and economic happy talk.

So what's the deal? We know Tesla is planning to spend $5 billion to build its 10,000 square foot gigafactory. What we don't yet know is how much Tesla is expecting the State of Nevada to kick in for construction.

We strongly suspect this deal will involve some Nevada taxpayer money, as a special session looks to be necessary. It's also been no secret that Tesla has demanded public subsidies for this gigafactory.

So how much will this cost us? Most likely, a cool $400 million.

And what are we getting out of this? Potentially 6,500 new jobs for the Reno/Sparks region, along with a breakthrough that may open the door to electric cars becoming more affordable for more consumers.

Here's the good news: This has the potential to actually make a dent in the long promised drive to diversify Nevada's economy. This also has the potential to kick-start the green tech sector and take it to new levels here in Nevada and nationally. Oh, and this can help quite a bit in our efforts to take on the challenges posed by climate change.

Here's the disturbing news: We're once again relying upon corporate welfare for any sort of economic development. And that's just not a sustainable business plan going forward. After all, take a look at how far Reno and Nevada have gone with Apple. Apple continues to laugh all the way to its offshore bank accounts while we're left holding the bag (full of holes, thanks to the many budget cuts we've endured over the past half-decade).

This is why we're experiencing mixed reactions now. On one hand, it's exciting to think that Nevada may be home to the next generation of transportation & energy innovation. But on the other, this achievement seems awfully tainted due to the $400 million we're having to bribe spend to convince Tesla to build the gigafactory in Northern Nevada. Is that money truly well spent? Or is it just more money being diverted from our already "grossly underfunded" schools and other critical parts of public infrastructure?

Right now, let's just say the 63 Nevadans who may soon have to head back to Carson City are about to step into a rather sticky situation.