TAHOE/TRUCKEE — Tesla Motors’ selection of the Reno area for its highly sought $5 billion battery factory could have economic impacts to Truckee/Tahoe, local business leaders said this week.
“There is no doubt the major impact is in Reno and Sparks, but we will get a secondary impact from this,” said Steve Frisch, president of the Sierra Business Council. “I do think it will be a long-lasting and positive impact that might take years for us to really understand and leverage for benefit in our region.”
The electric car company’s gigafactory is projected to create 6,500 direct jobs by 2020, when the up-to-10-million-square-foot lithium ion battery plant is running at full capacity in the Tahoe Reno Industrial Center off Interstate 80, east of Reno.
According to media reports, Tesla intends to give Nevadans and veterans hiring priority.
“Even if most of the factory’s jobs are filled with Reno residents or relocations to Reno, those people will want to recreate, visit and some will even choose to live in a charming, authentic mountain town such as Truckee,” said Lynn Saunders, president/CEO of the Truckee Donner Chamber of Commerce.
On the flip side, others who live in Reno and work in the Tahoe/Truckee region may decide to go work for Tesla, reducing the workforce here, said Joy Doyle, executive director of North Tahoe Business Association.
“Due to the Tahoe/Truckee high cost of housing, some of Tahoe/Truckee’s workforce is forced to live in the Reno area,” she said. “With new Tesla job openings, these workers may choose to work in Reno, as well.”
Reno residents tend to do day trips to Lake Tahoe, so their impact will likely be to sales tax collection by eating out, shopping in retail stores and recreating in the region, said Sandy Evans Hall, executive director and CEO of the North Lake Tahoe Chamber/CVB/Resort Association.
“(Sales tax has) been fairly flat,” she said. “For me it’s surprising that sales tax is not something that has been climbing, where as (Transient Occupancy Tax) has been climbing at a pretty good pace — somewhere between 4 and 8 percent increases year over year. ... So it might increase that sales tax.”
For Nevada, Gov. Brian Sandoval projects the gigafactory will deliver $100 billion in economic impact to the Silver State over 20 years.
“Our local businesses have suffered for the reasons we all know of, and Tesla will be a much-needed shot to our local economy,” said Mike Young, president of the Incline Community Business Association. “... This great new industry and possibly more that will follow will bring new, much-needed energy to Incline Village that we need to take full advantage of and expand it as far as we can go.”
Therefore, he would like to see Washoe County and the Incline Village Crystal Bay Visitors Bureau invest in promoting Incline Village and the activities and events it offers.
Evans Hall said the North Lake Tahoe Chamber/CVB/Resort Association will continue to work with the Reno Sparks Convention and Visitor Bureau on the Reno-Tahoe campaign, providing local messaging that features photography showcasing the North Shore’s beauty.
As for additional marketing aimed at potential future Tesla employees, she said: “What we do specifically to engage that particular clientele, we really won’t know until we get closer to the plant being built, people moving here, the jobs being offered, and we start to understand what is the new residential impact.”
Doyle said Tesla’s decision to build the gigafactory close to Tahoe/Truckee helps draw attention to the area from other companies and employers for business, too.
“Equally as important as the financial side is the social capital side,” added Frisch. “It’s an influx of relatively young, family oriented people who get involved in the community. These are smart people with high skill, and they get involved in local organizations and efforts. Often they spin off ancillary businesses, which build more intellectual capital in the community, and that’s really important.”
Yet, in order for Reno and surrounding areas to enjoy these potential benefits, the Nevada legislature must approve Sandoval’s proposed $1.25 billion tax incentive to Tesla. If approved, the package would allow Tesla to operate in the state tax-free for 10 years.
Of the five state gigafactory site finalists — Nevada, Arizona, California, New Mexico and Texas — Nevada didn’t offer the largest incentive package, said Elon Musk, Tesla Motors CEO and founder.
“It wasn’t just about the incentives,” he said at last week’s deal announcement at the State Capitol in Carson City. “What the people of Nevada have created is a state where you can be very agile, where you can move quickly and get things done. It’s a real get-things-done state. That was a really important part of the decision.”
On Wednesday, the Legislature gathered in Carson City for a special session to vote on the incentive package.
By midday Thursday, the Nevada Assembly approved two bills that make up half of the package of legislation designed to bring the gigafactory to Storey County.
The Nevada Assembly and Senate were expected to work into the night Thursday.
If approved, Telsa could begin construction of the factory this year — an effort that could require 3,000 construction jobs — and open in 2017.
“The gigafactory’s really vital for the future of Tesla in order to produce this mass market affordable electric car, which has been our goal from the beginning,” said Musk, referring to the Model 3 car, scheduled for release in 2017.
The facility will allow Tesla to produce 500,000 vehicles annually by 2020.