News - April 14, 2025 - by Ray Hagar

When Tesla built its first gigafactory about 10 years ago in Nevada's small and rural Storey County, the electric-car manufacturer pledged to invest $3.5 billion into economic development.

It got a sweet deal in return.

Tesla received a 10-year tax abatement for property taxes and the Modified Business Tax, plus a 20-year abatement on sales tax.

The abatements helped then-Gov. Brian Sandoval's administration win the national competition for the gigafactory, which has since created thousands of direct and indirect job opportunities, lifting the economy of the Reno/Sparks metro area.

Since then, corporations like Google, Switch and Panasonic also planted flags in Storey County -- making its Tahoe-Reno Industrial Center the largest industrial center in the U.S. and third largest in the world, according to the WorldAtlas.

Tesla was a good neighbor, and went a step further than what the law mandated. It acknowledged its' arrival would put a massive strain on the county's infrastructure and costs.

So Tesla agreed to help with costs of improving roads, managing traffic and strengthening sheriff and fire protections, Storey County Manager Austin Osborne said on Nevada Newsmakers recently. The county was struggling at the time, Osborne added.

Without that "good faith" agreement, it would have been impossible for the small county with about 4,000 residents to provide services to the industrial giant, Osborne said. Tesla's infrastructure needs were immediate. Yet Storey County would have to wait 10 years for any new taxes from Tesla because of the deal with the state.

"When you talk about a company that's putting in seven-million square feet, a company that has special situations, hazardous materials, processes and new technologies, and a company that is bringing in 5,000 or 10,000 or 20,000 employees, that has an impact to a local county," Osborne told host Sam Shad.

Now, Storey County is concerned that major corporations planning to come to Nevada in the future won't be as honorable as Tesla.

So Storey County is spearheading legislation at the Nevada Legislature to compel any future company that qualifies for Nevada's two largest tax-abatement levels -- for investing $3.5 billion or $1 billion -- to help with the costs of expanded government services that comes with the arrival of a major economic player.

Currently, any company seeking Nevada's largest tax abatements are under no obligation to negotiate any deal with any county to offset costs of government services, Osborne said.

The bill, Senate Bill 69, recently was approved by it's first committee -- Senate Revenue and Economic Development -- and remains alive in the legislative process.

"So really it brings the stakeholders to the table," Osborne said about SB 69. "All the current legislation allows us to do is we can negotiate an agreement with that gigafactory to offset those costs, to defer or to defray those costs."

"Different counties have different situations," Osborne said. "So in Storey County, when a gigafactory came our way, we were well positioned to take this in but we were able to negotiate that agreement to offset our costs.

"If we didn't negotiate an agreement, or if the company walked from the table and said, "We don't want to negotiate, we don't want an agreement like this,' you would be talking about $12 million, $24 million, $30 million during that period of time ... that the county would have had to foot itself," Osborne said.

Osborne stressed that SB 69 would only impact companies that have invested at least $1 billion in economic development. Currently only three of those entities are in Nevada. All three are in Storey County at the TRI Center, which now employs 35,000 permanent and temporary workers, according to TRI data.

"There's been approximately 300 companies that have been brought into Nevada from the Governor's Office of Economic Development (GOED) that received abatements of one sort or another," Osborne said. "We believe Senate Bill 69 -- to date -- would have affected three, and that would be the (Tesla) Gigafactory One, (Tesla) Gigafactory Two and the Redwood factory."

The deal for the first Tesla gigafactory was finalized in 2014 and the second Tesla gigafactory deal was done in 2023. The deal for Redwood Materials, in 2024, gave rise to a lithium-ion battery recycling center, producing battery materials for electromobility and electrical storage systems.

"It's important to note that because there's been comments by folks out there that say, 'Oh, you know, all the abatement companies coming to Nevada will be affected by SB 69. What are we going to do?'" Osborne said.

"It doesn't apply to them at all," Osborne said. "Data centers and warehouses and or recycling .... There's all kinds of different abatements that are out there for various companies that we see around us. And they have all different amounts of percentages and things that are tied to benchmarks they meet and what they invest in the state."

Senate Bill 69 would be a big help to fire departments whose responsibility is to protect the investments of these large companies. Now, fire chiefs have no input in negotiations between large companies and state government when negotiating tax abatements, Osborne said.

"The way it's currently structured right now, the fire district has no authority to discuss the matter with the state or to even participate during a GOED (Governor's Office of Economic Development) meeting, about the needs that they might have in providing paramedics, firefighters, special equipment, fire stations, other things that might be needed, hazmat response training, anything," Osborne said.

"There's no control, there's no power, there's no influence," Osborne added.

SB 69 is not designed to help Storey County by itself, Osborne said. Instead, it would help other Nevada counties in the future if a large company wanted to build within a county's jurisdiction.

"This is not a Storey County bill, this is not about us," he said. "It's about Esmeralda County. It's about Washoe County, it's about Elko County. All the counties in the state are under unique circumstances that might be applicable to them -- that they could get a gigafactory and that can happen in Esmeralda or Humboldt County."

Some might scoff at a gigafactory in rural Esmeralda or Humboldt County. But it is more viable than some may think, Osborne said.

"I was told there was no way a gigafactory would come to those counties," Osborne said. "They're way too small. That's not even worth talking about. But you have some of the world's largest lithium prospects going on in those two counties.

"I don't know, maybe a gigafactory would like to co-locate in some manner next to that," Osborne said. "How are those two little counties going to be able to handle something like that?

"They'll have to deal with tens of thousands of employees and not have the ability to negotiate an agreement to be able to work that out, to be good partners, build that private-public partnership, transform the county into something great, and still allow that economic development opportunity to move forward," Osborne said.

The Professional Firefighters of Nevada and the Nevada Association of Counties support the bill. The Las Vegas Global Economic Alliance and several chambers of commerce are opposed, according to the Nevada Current.

The City of Fernley, which is located near the TRI Center, also opposes the bill.

“The current process for abatements and attracting businesses has been very successful,” Fernley lobbyist Mendy Elliott said when she testified before lawmakers. “If it isn’t broken, we are trying to understand what Storey County is trying to fix.”