LAS VEGAS (AP) - Nevada plans to offer $335 million in state tax incentives and infrastructure upgrades to an upstart, Chinese investor-backed electric carmaker that wants to build $1 billion production plant in a Las Vegas suburb - an agreement Gov. Brian Sandoval called a good bet for Nevada's future.
LAS VEGAS (AP) — Nevada plans to offer $335 million in state tax incentives and infrastructure upgrades to an upstart, Chinese investor-backed electric carmaker that wants to build $1 billion production plant in a Las Vegas suburb — an agreement Gov. Brian Sandoval called a good bet for Nevada's future.
The Republican governor on Thursday formally announced a tentative deal with Faraday Future, and projected the overall economic impact on the local and state economy would be $85 billion over 20 years.
"Is this good for Nevada? The answer (is) a resounding yes, yes, yes," Sandoval told applauding public officials, state lawmakers and union members at a ceremony in Las Vegas.
The governor didn't set a date, but made it clear he plans to convene Nevada lawmakers before Christmas for a short special session for the Legislature to authorize the agreement. Faraday hopes to break ground on a 3 million square foot facility in North Las Vegas in January.
The Gardena, California-based company has offered few details about its product, but plans to unveil a concept car ahead of the Consumer Electronics Show in Las Vegas in January. It hopes to bring a vehicle to market as early as 2017.
Faraday executive Dag Reckhorn said the company plans to build an "advanced, connected electric vehicle that will redefine the automotive experience."
The venture is backed by Jia Yueting (ZHAW' YOO'-weh-ting), an online video and gadget entrepreneur and founder and CEO of Beijing-based holding company LeTV. He styles himself after Apple's late Steve Jobs.
Here are highlights of the agreement that Nevada officials hammered out with the company over the course of a year.
Faraday Future is expected to bring in $760 million in state and local tax revenue over 20 years — $215 million of which would be abated through the deal.
Tesla Motors received $1.3 billion in top-tier incentives under a measure the Legislature approved last year to land a $5 billion battery factory outside of Reno. This time, Sandoval will ask lawmakers to create a middle-tier option for Faraday's factory and any other similar-sized projects.
To hedge against the risk of failure from the largely unknown company, about half of Faraday's rebate money would be held in trust to be returned to the company once a $1 billion investment threshold is reached.
The company would receive a complete sales tax rebate for 15 years, compared with Tesla's 20-year term. Faraday would also receive a 75 percent abatement of real and personal property taxes and its modified business tax for 10 years, as opposed to the 100 percent Tesla receives.
Faraday would also get up to $38 million in transferrable tax credits over six years if they meet their goal of hiring 4,500 people.
The Faraday Future development will speed the need to provide water, gas, electric, sewer, police and fire services to the fledgling Apex Industrial Park in North Las Vegas. Sandoval and Steve Hill, the state's top economic development official, said the result will make the sprawling undeveloped area more attractive to other businesses.
The deal involves $120 million in public infrastructure improvements, and $70 million in investments from private landowners. Proposed projects include an interchange on Interstate 15, widening U.S. 93, and building a rail port along an adjacent Union Pacific line.
Hill said the road improvement project would take priority and could push other projects in the state back in the Nevada Department of Transportation's queue.
State officials project Faraday will employ 4,500 people by 2023, earning an average of $22 per hour. Construction is expected to employ 3,000 workers.
Half of the plant's workers must be Nevadans, according to the agreement.
The plant is also expected to create 9,000 indirect jobs — from homebuilders to grocery clerks to hairdressers — serving Faraday workers.
A training program is in the works to prepare up to 4,000 auto assembly workers for Faraday jobs.
Steve Sisolak, Democratic chairman of the Clark County Commission, called himself "admittedly skeptical" of the Faraday Future proposal until he heard the number of jobs it might attract.
Jock O'Connell, international trade economist with Beacon Economics in California, said he remained doubtful.
"The technology is going to be the payoff, rather than the end product," O'Connell said in an interview. He called it a risk to install machinery, hire people and create an assembly line in the intensely competitive automobile market.
"It would be wise to be skeptical about a timetable to build cars this quickly," he said. "You don't need a large building to develop technologies. This could be a way to develop technology that can't be developed in China."
Rindels reported from Carson City, Nevada.