News - February 6, 2023 - by Ray Hagar

Tesla's recently-announced $3.6 billion expansion of its Gigafactory east of Reno and Sparks will increasingly strain the infrastructure of the two cities, the mayor of Sparks said on Nevada Newsmakers last week.

Mayor Ed Lawson suggested the 2023 Legislature, which opens today in Carson City, may need to step up to help solve the problem.

"So we are looking for some help," he told host Sam Shad. "We are looking for some legislative help in the future."

Although the Gigafactory and many other businesses at the Tahoe-Reno Industrial Center have given Reno and Sparks a boost economically, the two cities have been increasingly overextended in the areas of school construction, police, health services, housing, roads, sewer and other areas.

"I think it can only help us as far as our economy goes," Lawson of the Tesla expansion. "But what it is going to do is put more strain on the City of Sparks, and Reno."

Lawson noted that Storey County provides little housing for the thousands workers at Tesla, Google, Switch and other major companies located in TRI.

"About 80 percent for the people that work at the TRI Center live with us and commute back and forth," Lawson said.

"Right now, there is roughly 25,000 employees out there and Tesla says they are going to double their employees in the next five to seven years," Lawson said.

Tesla announced in late January that it is constructing a new factory to build electric semi trucks and one to add to battery-cell manufacturing, according to a company news release. Tesla said it will add 3,000 new 'team members' but that does not include construction workers to build the expansion nor ancillary vendors to serve employees and businesses once the expansion is completed.

Lawson said he only learned about Tesla's expansion plans three days before the announcement and was sworn to secrecy.
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"We could have 50,000 jobs in Storey County and we take the bulk of that pressure because they are going to come live with us," Lawson said. "In Reno and Sparks, we have the all of the services, the hospitals, the doctors the specialist you need."

Other communities along to Interstate-80 corridor east of Sparks cannot absorb the growth as well as Sparks and Reno, the Sparks mayor said.

"Fernley doesn't have any water, Silver Springs doesn't have any water so they really can't grow a population like we can," Lawson said.

A bill proposal from the 2017 Legislature, sponsored by then-Assemblyman Skip Daly, D-Sparks, sparked controversy because it could have forced Storey to pay impact fees to Reno's and Sparks' Washoe County -- for infrastructure and educational costs.

Yet it fell flat, partially because Storey County and the State of Nevada had already granted many tax breaks to Tesla and others to lure the businesses in the first place.

As part of the 2014 deal to locate in Nevada, Tesla, Panasonic and H&T Battery Components don't pay property tax to Storey County until 2024. The sales and use tax abatement would last until 2034, according to an extensive report in the Sierra Nevada Ally.

Yet increasing Storey County's responsibility for social services is not a dead issue, Lawson said.

"It pretty much has to bubble to the surface," Lawson said. "Nothing is off the table at this point."

The problems of growth that the Legislature could address go deeper than roads and schools, Lawson said.

"Mainly with infrastructure, we put all the burden on Reno and Sparks, not just infrastructure like roads and sewers but also mental health services and some of the social services that we do. That infrastructure needs to be there."

Lawson especially sees a large void in the state's approach to mental health.

"We have a bad mental health program," he said. "When you think about it, from 1980 on, we've not done very well when it comes to mental health and we have a problem right now that we need to address.

Shad noted that the lack of mental heath services has long been a topic in Northern Nevada.

West Hills Behavioral Heath Hospital closed down in December of 2021 and experts said that left a void.

Last year, Reno Mayor Hillary Schieve announced plans for a new Northern Nevada Adult Mental Health Services campus, open 24-hours, partially to help keep the mentally ill from overcrowding the Washoe County Detention Facility, according to Reno's 2-News.

Still, Lawson sees little improvement overall.

"Nothing has changed and it probably has gotten worse," he said.

Despite the oncoming Tesla expansion, Sparks is seemingly out of land for development, Lawson said.

"Here in the City of Sparks, we are out of land," he said. "We don't have anymore parcels. I just heard of a parcel being bought, 31 acres at $250,000 per acre because the land is so scarce. It drives up prices for housing, businesses and everything else."

If Sparks continues to provide housing for the influx of new workers, it must build up and not out, Lawson said.

"So what we have decreed in Sparks is infill and when you do infill, you generally go up," Lawson said. "And when you go up, it gets more expensive. So in essence, we are becoming San Francisco in Sparks because we don't have any place to grow, which brings us full circle back to the lands bill."

Lawson was referencing the need for transfers and sales of federal lands in Nevada to private or municipal use. A major lands bill recently passed Congress to expand the Naval Air Station Fallon by more than 500,000 acres. Lawson, however, needs land transfers closer to home.

"Quite frankly, what I have found is most of the senators and congresspeople I've met don't realize just how big Nevada is," Lawson said. "They think Las Vegas and Reno are right next to each other. And they also don't understand that (almost) 85 percent of our land is controlled by the federal government."