Nevada

Nevada Considers Economic Development Incentives for Switch Data Center Expansions

The agenda for the next meeting of the Nevada Governor’s Office of Economic Development (GOED) Board includes an application from Switch, LTD. for tax abatements for proposed billion dollar data center investments in Storey and Clark Counties.

Nevada State Capitol

Nevada State Capitol (photo -Amadscientist/wikimedia)

Earlier this year in January, Switch had announced plans for a billion dollar expansion of its Las Vegas data center operations, and another billion dollar proposal for a new Northern Nevada center in the Tahoe Regional Industrial Center outside Reno.

In addition to the construction of the SUPERNAP 9 through SUPERNAP 12 data centers in Southern Nevada and the Tahoe-Reno SUPERNAP 1-SUPERNAP 7 data centers, Switch also plans to build what they call the SUPERLOOP. This is a fiber line with a 17,000-gig connection that will link Las Vegas to Reno, Reno to the San Francisco Bay Area, the Bay Area to Los Angeles, and then Los Angeles back to Las Vegas.

Upon request by the Nevada economic development agency, the State Legislature subsequently took up a bill (SB 170) that allowed companies undertaking new or expanded data center projects to apply to the Office of Economic Development for a partial abatement of certain property taxes and local sales and use taxes.

Switch’s tax abatement application says it is investing approximately $1,136,667,030 in capital into the Reno area for new equipment, and plans to hire 50 new employees in Storey County with an average wage of $28.98 per hour.

Their tax abatement application for the Las Vegas expansion likewise states that the company is making a capital investment of approximately $1,361,157,510 and will hire 50 new employees in Clark County with an average wage of $28.98 per hour.

Switch’s tax abatement applications are supported by the respective regional Las Vegas and Reno economic development agencies LVGEA and EDAWN.

In addition to the Switch tax abatements, the GOED Board will also consider applications for tax abatements for job creation and expansion projects in the state from a range of companies including Barclays Services, LLC; Chewy.com, LLC; Fulcrum Sierra BioFuels, LLC; Machine Zone, Inc.; and Xtreme Manufacturing, LLC.

The GOED Board will also consider applications from aviation companies seeking sales and personal property tax abatements that are now available to them. The list of companies whose applications may be considered include Dassault Aircraft Services Corp, Apex Aviation, Inc., Astro Aviation Corp, Cashman Equipment, Lone Mountain Aviation, Inc., Air Methods Corp, and Unmanned Systems Inc.

Nevada GOED to Consider Economic Development Incentives for Reno, Las Vegas Projects

The agenda for the next meeting of the Board of the Nevada Governor’s Office of Economic Development includes applications seeking incentives for several key projects in Reno, the Las Vegas Valley and Lyon County, among others.

Reno

Reno (photo – Ken Lund/flickr)

The only Catalyst Fund grant request on the agenda is an application by the City of Reno economic development agency for an expansion of healthcare technology company Grand Rounds, Inc.’s operations in Reno.

San Francisco, CA-based Grand Rounds is opening a services and technology center in Reno as its second location. The company has already hired around 30 employees in Reno, and they plan to increase the number of jobs created in Reno to 200 over the next five years. These are jobs with an average hourly wage of $30.

Grand Rounds is seeking $150,000 in state incentives in the form of a Catalyst Fund grant. The agreement requires the company to create at last 70 jobs over the next two years. This application is supported by the City of Reno and the Economic Development Authority of Western Nevada (EDAWN).

Grand Rounds CEO Owen Tripp said in a release announcing the project that expanding into Reno is a major milestone for Grand Rounds, and the Northern Nevada community has met them with open arms.

EDAWN CEO Mike Kazmierski said in the release that companies like Grand Rounds will accelerate the transition of this region as a technology center that is attractive to the healthcare sector and other technology companies in the years ahead.

The GOED Board will also consider several applications for tax abatements. One key project is the proposed relocation of the corporate headquarters of Fidelity National Financial Ventures, LLC to the Las Vegas Valley.

FNFV is currently headquartered in Jacksonville, FL, and plans to invest more than $3.7 million for the relocation project that is expected to bring eight high-level executives and 12 support staff, adding up to 20 new jobs with an average hourly wage of $305.88 for Nevada.

Other projects whose tax abatement applications may be considered by the GOED Board include:

Greeley Development Corporation – Seeking $485,000 in tax abatements for a manufacturing facility project in Storey County;

GreeNu Commodities, LLC – Seeking $3,636,400 in tax abatements for a waste-to-energy conversion facility in Lyon County that will reuse waste tires to generate diesel grade liquid fuel, carbon black, and scrap steel.

Just Refiners (USA) Inc. – Seeking $709,700 in tax abatements for a carbon treatment and development facility in Lyon County.

Angie’s Artisan Treats – Seeking $107,200 in tax abatements for a manufacturing and distribution facility in Washoe County.

Tolsa West Coast Corp. – Seeking $197,400 in tax abatements for expansion of manufacturing and distribution operations in Pershing County.

Tolsa is a part of Madrid, Spain-based Tolsa Group. The company is separately considering relocating its U.S. corporate headquarters to Reno. That project is not a part of their application for tax abatements, which are only for the Pershing County expansion in Lovelock, NV.

Resurgent Reno in Focus at Nevada Economic Development Conference

The Nevada Economic Development Conference is scheduled to be held May 19-21, 2015 at the University of Nevada Reno Campus.

Nevada Economic Development Conference

Nevada Economic Development Conference (photo – wndd.org)

The conference is presented by the Western Nevada Development District in partnership with USDA Rural Development and the College of Business at the University of Nevada Reno.

The Nevada Economic Development Conference under the “Stronger Economies Together” theme was established to create economic development synergy across different industry sectors.

The three-day conference brings together hundreds of policy makers and government officials with business leaders to discuss economic development challenges and opportunities the region faces, along with best practices in Nevada and the United States.

Reno economic development projects are sure to be a major topic of discussion this year, with a special focus on automotive and tech mega-projects the region has recently secured such as the Tesla Gigafactory and Switch SUPERNAP Reno data center.

Offsite tours the conference is offering as optional activities include a visit to the Tahoe Reno Industrial Center – the world’s biggest industrial park and home to the Tesla Gigafactory. Another tour will take participants to Reno Start Up Row, a growing community of startups and entrepreneurs in a historical part of downtown Reno.

The pre-conference agenda for May 19 is comprised of a full-day workshop on the fundamentals of economic development presented by the UNR College of Business and University Center for Economic Development.

After the welcome and opening session, the conference begins in earnest with a packed agenda of concurrent sessions in different tracks such as access to capital, agribusiness, economic vitality, energy, manufacturing, tourism, transportation, and workforce development. There will be four sessions in each track on both May 20 and 21.

Before and in-between sessions, the conference agenda includes keynote addresses and lunch panels, as follows:-

Joy of Conferencing – Keynote by international business consultant Patrick McGaughey;

Making Small Towns the Location of Choice – Lunch and keynote by Don Macke and Deborah Markley, co-founders of the Center for Rural Entrepreneurship.

Silos to Synergy – The Connected Village – Keynote by Jason Broadwater, founder of community development initiative Old Town New World, published author and a board member of the Rock Hill, SC EDC.

Northern Nevada Rural and Economic Development Authority Lunch Panel – Moderated by television new personality Brent Boynton.

What: Nevada Economic Development Conference (WNDD)

When: May 19-21, 2015

Where: The Joe Crowley Student Union, University of Nevada, Reno Main Campus

Nevada Senate Approves Economic Development Bill Imposing Performance Requirements on Tax Abatements

The Nevada Senate has approved legislation that seeks to impose additional performance requirements on tax abatements provided by the State for economic development purposes.

Nevada State Capitol

Nevada State Capitol (photo – Amadscientist/wikimedia)

The bill (SB 74) is one of a slew of Nevada economic development incentive changes currently under consideration in the Legislature.

The Senate is due to vote on multiple pieces of legislation enhancing incentives for specific industries such as data centers and the aviation and drone industries.

The NV Senate did approve SB 74 on a 20-0 vote. The bill requires that applicants seeking tax abatements from the state should create ‘primary jobs’ and provide an estimate of the total number of new employees the applicant anticipates hiring in Nevada over a two-year period.

The economic development agreement will likewise require that the applicant meet job creation targets over a two-year period, instead of the current one-year period.

The bill also takes a stricter view of the wage level required, with only the wages paid to new employees to be considered when determining whether an applicant meets the requirement that the average hourly wage exceeds the required amount.

This particular provision will make it harder for projects to qualify for tax abatements, since the law currently allows the State to factor in the applicant’s existing jobs in Nevada while calculating the average hourly wage paid to employees.

The bill limits the amount of partial abatement available if the average hourly wage paid to employees is lower than a designated percentage of the state or county average hourly wage, and prohibits the Nevada Governor’s Office of Economic Development (GOED) from approving certain partial abatements if the wages paid by the applicant to new employees are lower than the designated percentage.

SB 74 now goes to the Nevada Assembly and will then need to be signed by the Governor in order to become law.

The Nevada Senate Committee on Revenue and Economic Development has also approved other bills such as SB 93 and SB 170 which are yet to be approved by the full Senate.

SB 93 authorizes those who own, operate, manufacture, service, maintain, test, repair, overhaul or assemble an aircraft or any component of an aircraft to apply for tax abatements. This bill is aimed at promoting Nevada’s aircraft and drone industries.

SB 170, a bill which the Nevada Governor’s Office of Economic Development has asked the State Legislature to pass, provides the framework for incentives for new and expanding data center projects. The bill not only approves abatement of property taxes and local sales and use taxes, but also a partial abatement of taxes for certain qualified businesses that colocate with a data center.

The bill makes it easier for data center projects to qualify for tax incentives, with a 75 percent tax abatement for 20 years available for projects investing $100 million and creating 50 jobs, or $50 million and 25 jobs for a 10-year abatement. Current law requires projects to invest $250 million and create 100 jobs to qualify for a 20-year tax abatement.

Both these bills, if approved and passed into law, are expected to have a huge impact and lead to the creation of thousands of new jobs in Nevada.

Nevada Economic Development Incentives for Sutherland Global Services Las Vegas Project

At its latest meeting, the Board of the Nevada Governor’s Office of Economic Development approved an application for incentives sought by Sutherland Global Services for a new facility they plan to establish in Las Vegas.

Boulevard Mall in Las Vegas, NV

Boulevard Mall in Las Vegas, NV (photo – John Phelan/wikimedia)

Sutherland Global Services Inc. is one of the world’s largest independent business process outsourcing companies employing more than 30,000 professionals across over 40 operation centers and business operations around the world.

The company will make a capital investment of more than $5.38 million into the project, including equipment costs and $2 million for improvements of the 94,000-square-foot leased space they are considering at the Boulevard Mall on Maryland Parkway.

As a start, they plan to create 230 jobs with an hourly wage of $14.43. Within five years, they expect to create up to 1,000 full-time jobs at the facility.

A review undertaken by Sutherland Global Services showed that they would have much lower operating costs in Nevada than at their headquarters in Rochester, NY. The company’s site selection process also took into consideration sites in Boise, Detroit, Houston, Oklahoma City and Phoenix.

If the company goes ahead with the project in Las Vegas, they have been offered Nevada economic development incentives totaling $297,900. This includes abatements of sales tax, modified business tax, and personal property tax.

The cumulative economic impact of the project in Clark County over a 10-yer period is estimated at $191,657,150, and the estimated new taxes generated over the same period are pegged at $8,817,261.

Furthermore, the potential Las Vegas location the company has picked in the Boulevard Mall comes under a severely distressed area in Paradise, NV, which means that job creation and investment projects will be eligible for New Markets Tax Credits. The Boulevard Mall, which first opened its doors in 1968, is the oldest mall in Las Vegas, and is currently undergoing significant renovations.

In a letter to GOED Executive Director Steve Hill, Sutherland Global Services Inc. Senior Account Manager Joseph Magliozzi writes that “The economic development incentives offered by the State of Nevada have been an integral factor in our decision making process to locate our operation here in the state.”

The letter goes on to add that they examined multiple locations throughout the western states and ultimately, after much due diligence and economic feasibility analysis, Nevada was chosen “for its overall incentive package and pro business climate.”

The Sutherland Global Services project was supported by the Las Vegas Global Economic Alliance. LVGEA is a Las Vegas economic development group focused on growing the economy in Southern Nevada.

LVGEA Annual Report on Southern Nevada Economic Development Achievements

The Las Vegas Global Economic Alliance has released its annual report highlighting its achievements and performance metrics for 2014 as the regional economic development authority for Southern Nevada.

LVGEA annual report

LVGEA annual report (photo – lvgea.org)

The report, released to coincide with their inaugural State of Economic Development Address, mentions that the LVGEA far exceeded job creation and capital investment targets by attracting 3,821 new jobs to the region in the last 12 months.

The 23 new business projects and 10 expansion projects the LVGEA helped secure for Southern Nevada last year account for $444 million in capital investments.

These projects will have an annual economic impact of $523 million on the region, and will generate $85 million in local and state tax revenue over five years.

As the regional economic development organization for Southern Nevada, LVGEA works with the Clark County and Las Vegas economic development divisions, along with those of North Las Vegas, Henderson, Boulder City, Mesquite and Laughlin.

These local government partners helped bring another 13 relocation and expansion projects to Southern Nevada in addition to the 33 LVGEA-assisted projects.

Missy Young, chairman of the LVGEA Board of Directors and executive vice president of Colocation at Switch, said in the report’s foreword that it’s hard to believe that it’s only been a little more than two years since a small group of business and community leaders formed what is now called the Las Vegas Global Economic Alliance.

In 2013, the LVGEA hired new staff, created a strategic plan and helped to coalesce the community around a regional economic development strategy. “In the last 12 months, LVGEA has transformed economic development and really delivered for our region,” added Young.

Among their other achievements for 2014 is the launch of BizCONNECT, a new program to help local businesses grow for which the LVGEA collaborated with more than 20 local partners.

They also set the stage for construction of more than 500,000 square feet of large industrial buildings by partnering with RCG Economics to release a report on the demand for large industrial buildings in Southern Nevada.

The LVGEA helped the Regional Transportation Commission of Southern Nevada in crafting a regional business plan for transportation infrastructure.

Global initiatives by the LVGEA included two overseas trips to four countries, including participation in the 13-member delegation of the Nevada Center of Excellence to Singapore which put them in the same room with representatives of more than 1,000 companies from more than 100 countries.

This delegation was part of an effort to launch an industry around water technology in Southern Nevada. The LVGEA also hosted 14 delegations last year, including four from China and one each from Hong Kong, Taiwan and Japan.

Read the full LVGEA annual report (pdf).

Nevada Approves Economic Development Incentives For 13 Projects

At its latest meeting, the Board of the Nevada Governor’s Office of Economic Development approved incentives supporting 13 projects.

Nevada

Nevada (photo – wikimedia/Tobias Müller (Twam), www.twam.info

These projects are making investments totaling $108 million into the Nevada economy, and are expected to create 543 contract jobs.

Contract jobs here refers to the number of jobs an applicant seeking incentives commits to create in the first year of the agreement. The actual number of jobs that each project will create in total over the longer duration adds up to approximately 1,300. The average wage for these companies is $26.87.

In a release announcing the approval of these companies, Governor Brian Sandoval said that he would like to thank Steve Hill and the Governor’s Office of Economic Development for “their dedication to introducing a diverse portfolio of companies to Nevada and finding the best ways to maintain our competitive edge in economic development.”

GOED Director Steve Hill said in the release that Nevada economic development is off to a strong start this year with industry-leading companies such as Scientific Games and Clear Capital investing in the Silver State and creating high-quality jobs.

Hill added that economic development in Nevada is working because of the statewide commitment at all levels of the government to create and maintain a stable and growing economy into the future.

One of the companies approved to receive tax abatements and Catalyst Fund incentives is Scientific Games Corporation (NASDAQ: SGMS). The company is creating 202 jobs in Clark County with an average hourly wage of $23.44 and making a capital investment of $4,850,000.

With their recent acquisition of WMS and Bally, SG now has a large presence in Nevada that includes more than 1,500 employees. The company is ensuring availability of state incentives as part of the site selection process for its corporate headquarters and a manufacturing facility. Nevada is under consideration for these projects. Scientific Games is currently headquartered in New York City.

Scientific Games applied to GOED for approval of approximately $1,958,500 in incentives, including $1,400,000 through the Catalyst Fund and the rest as tax abatements.

Scientific Games Production likewise applied for tax abatements totalling $571,500 for the creation of 10 jobs and a capital investment of $7,600,000.

Clear Capital.com, Inc. is relocating from Truckee, CA to Reno, NV, as a result of which the company is creating 100 contract jobs and investing $1,240,100 in Nevada. Over a five year period, the company plans to hire 400 full-time employees at an hourly wage exceeding $30, plus health insurance and other benefits.

Clear Capital applied to GOED for more than $1.22 million in incentives, including $1 million through the Catalyst Fund, and the rest as tax abatements.

The other projects that received GOED approval include Petco Animal Supplies, Inc.; Parker Plastics Nevada, LLC; Bently Heritage, LLC; BlackRidge Technology; Burgess Information Systems, Inc. dba ProCare Rx; Chelten House Products, Inc.; Clearwater Paper Corporation; Creel Printing & Publishing Co., Inc.; ECO Waste Conversion Las Vegas, LLC; and Vineburg Machining, Inc.

Strong Cities, Strong Communities Las Vegas Economic Development Challenge Winners

The Strong Cities, Strong Communities (SC2) Las Vegas economic development challenge has advanced to phase two following a vote by the Las Vegas City Council.

SC2 Las Vegas competition

SC2 Las Vegas competition (photo – lasvegas.sc2prize.com)

The Vegas SC2 competition, funded through a $1 million grant from the U.S. Economic Development Administration, calls for teams to submit economic development plans matching the city’s needs and win a total of $900,000 in cash prizes.

Vegas is one of three cities awarded a $1 million grant in 2012 by the EDA to run the Strong Cities, Strong Communities competition. The other two are Greensboro, NC and Hartford, CT.

The Vegas SC2 competition attracted expressions of interest from teams in 49 states and 48 countries. Out of all the initial applications, the City picked 17 teams to compete in phase one. Only two of the selected teams were from out-of-state, and most were comprised of local development, business and architectural firms. UNLV faculty members were part of three teams, and UNLV collaboration was part of the plans submitted by four other teams.

Half of the submitted proposals outlined plans for the Cashman Center, two proposed ideas for business parks, and six focused on projects within the city’s Redevelopment area.

Ten teams out of the 17 will move on to phase two of the competition and a chance to win $800,000 in cash prizes. The City Council awarded $100,000 in phase one cash prizes to the top three proposals picked by an evaluation panel comprised of community leaders.

The first prize of $60,000 went to a team whose plan “Build a Vibrant Las Vegas” proposes the creation of an unmanned aerial and robotics resource center at Cashman Center. The second place prize of $30,000 went to architecture and design firm Gensler, which came up with a proposal to develop Cashman Center as a geographic center for sustainability that will attract and establish sustainable businesses.

The third place prize of $10,000 was awarded to a team comprised of local architect Eric Strain and community developer Arnold Stalk, who suggested a plan to develop a mixed-use Mid-Strip/Main Street project.

These three teams, and seven others, will now advance to phase two of the Vegas SC2 competition. Each team will have to develop comprehensive economic development plans for their proposals with a feasible roadmap for implementation.

Las Vegas Mayor Carolyn G. Goodman said in a release announcing the winners that they are very impressed with some of the innovative ideas in the phase one submissions. The Mayor added that they look forward to seeing these winning ideas developed even further during phase two of the competition.

Find out more about the Las Vegas competition at lasvegas.sc2prize.com.

Nevada Native Nations Lands Act to Spur Tribal Economic Development

Congress is moving towards approving the Nevada Native Nations Lands Act to spur tribal economic development for six northern Nevada tribes.

Farming in the Pyramid  Lake Indian Reservation,, NV

Farming in the Pyramid Lake Indian Reservation,, NV (public domain photo – epa.gov)

The legislation (H.R. 2455 and S.2480) will allow for the transfer of nearly 45,000 acres of federal land into trust for six tribes.

This land held in trust for the tribes will allow them to build housing and create opportunities for economic development while preserving cultural heritage and traditions and existing rights-of-way.

H.R. 2455 was introduced in the U.S. House of Representatives by Congressman Mark Amodei (NV-02). The companion bill in the Senate was introduced by Senator Harry Reid.

The House just approved an amended version of Congressman Amodei’s bill to bring it in line with the Senate version. The Senate Indian Affairs Committee has already cleared S.2480, and the passage of the House bill now makes it more likely that the bill will be taken up for consideration by the full Senate.

After the House passed the bill, U.S. Senator for Nevada Dean Heller issued a statement noting that the transfer of this land puts power back into the hands of the local tribes and their communities. “They are the ones best suited to make decisions on economic development and job creation,” said Sen. Heller.

The tribes that will benefit from this bill are the Te-Moak Tribe of Western Shoshone Indians, the Shoshone Paiute Tribes of Duck Valley, the Summit Lake Paiute, the Reno-Sparks Indian Colony, the Pyramid Lake Paiute Tribe, and the Ft. McDermitt Paiute and Shoshone Tribe.

In a statement issued at the time when the bill was introduced in the House, Congressman Amodei said that these are all cases where local control and economic self-determination are preferable to Washington-centric management by a federal agency.

Sen. Reid likewise said in a statement while introducing S.2480 in the Senate that land is the lifeblood of Native Americans and this bill provides space for housing, economic development, traditional uses and cultural protection.

Apart from the lands held in trust for these tribes, the bill also helps support Elko economic development by providing to Elko County 275 acres of federal land managed by the Bureau of Land Management. The City of Elko will be using this land for developing a motocross park.

Nevada Approves Economic Development Incentives for Switch and K2 Energy Expansions

At its latest meeting, the Board of Directors of the Nevada Governor’s Office of Economic Development approved incentives for three major projects.

Nevada GOED

Nevada GOED (photo – diversifynevada.com)

One of the projects is a $225 million investment in Clark County by Las Vegas-based tech solutions company Switch, Ltd., developer of the SUPERNAP data centers.

The investment will create a minimum of 34 new jobs and possibly up to 80 new jobs. There are already 5,000 jobs related to Switch data centers.

The company plans to continue adding to its line of data center ecosystems, and this latest investment will be used for building the SUPERNAP9A and SUPERNAP9B.

Including this latest expansion, Switch will have 1.3 million square feet of active data center space, along with 136,000 square feet of office space in Nevada. Apart from the hundreds of millions of dollars already invested by the company in the region, Switch is also participating in high-tech industry partnerships to boost regional economic development efforts.

Switch cited the investments already made in the region, along with the climate and favorable business environment, as factors for selecting Southern Nevada for yet another expansion.

Assisted by the Las Vegas Global Economic Alliance (LVGEA), Switch Ltd. successfully applied for and secured a $20.7 million package of Nevada economic development incentives for the $225 million expansion project. The incentives will be provided in the form of tax abatements, including a sales and use tax abatement, Modified Business Tax abatement, and a real property tax abatement.

The LVGEA is a public-private economic development partnership serving Southern Nevada. Another major Clark County project assisted by the LVGEA that received GOED approval for a package of incentives was K2 Energy Solutions, Inc.

Henderson, NV-based K2 Energy Solutions, which was recently awarded an $81.4 million federal contract to supply batteries to the Navy, is undertaking a $32 million expansion of its operations in Henderson. This LVGEA-assisted project has also been approved to receive a $2.9 million package of tax incentives for this project.

Also formally approved during the GOED meeting was the $1.3 billion package of incentives for the Tesla Motors Gigafactory project in Storey County. This project was assisted by the Economic Development Authority of Western Nevada. The EDAWN is a public-private economic development partnership serving the Greater Reno-Sparks-Tahoe region.

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