mpacts of tesla igafactory in storey ounty, nv · county, nv brian bonnenfant center for regional...

IMPACTS OF TESLA

GIGAFACTORY IN STOREY

COUNTY, NV

Brian Bonnenfant Center for Regional Studies University of Nevada, Reno

Eugenia Larmore Ekay Economic Consultants

October 9, 2014

IMPACTS OF TESLA GIGAFACTORY IN STOREY COUNTY, NV

Total Annual Avg

Direct Jobs 8,950 2,983

Indirect Jobs 4,665 1,555

Total 13,614 4,538

Economic Impact 1,600,000,000$ 531,400,000$

Source: Governor's Office of Economic Development

Washoe 10,552

Lyon 474

Carson City 873

Douglas 943

Storey 159

Total 13,001

Tesla as a % of Currrent Total 34.9%

Peak Construction Employment (2006, above counties) 29,176

Source: Department of Employment, Training, & Rehabilitation

Total Annual Avg

Direct Jobs 12,015 858

Indirect Jobs 6,262 447

Total 18,277 1,306

Economic Impact 2,100,000,000$ 152,900,000$

Total Equipment Expenditure 9,000,000,000$ 642,857,143$


Washoe $5,824,726,136

Lyon $305,525,152

Carson City $779,297,546

Douglas $592,823,014

Storey $77,728,883

Total $7,580,100,731

Source: Department of Taxation

Construction (2015-2017)

Equipment Installation (2015-2028)

Current Construction Employment (2013)

Total Taxable Sales (FY13)


Direct Jobs 6,500

Total Jobs 22,700

Employment Multiplier 3.4923


Nevada Input-Output Model (IMPLAN)

Alkalies and chlorine manufacturing 4.8018

Other basic organic chemical manufacturing 4.4615 617

Plastics material and resin manufacturing 3.9172

Ground or treated mineral and earth manufacturing 3.5106

Other engine equipment manufacturing 3.2942

Aluminum product manufacturing from purchased aluminum 2.3851 617

Carbon and graphite product manufacturing N/A 617

Storage battery manufacturing N/A 4,650

Arizona Input-Output Model (IMPLAN)

Other basic organic chemical manufacturing 4.4379

Aluminum product manufacturing from purchased aluminum 3.1015

Storage battery manufacturing 2.5862

Carbon and graphite product manufacturing 2.4543

Direct

Jobs

Tesla Operating Impacts (GOED)

(Highlighted industries represent the direct Tesla industries used in GOED's economic impact analysis.

National averages were used to create the nonexistent industries in Nevada.)

(The direct Tesla industries currently exist in Arizona. The Center for Regional Studies used the AZ IMPLAN

model to determine secondary industry impacts. The supporting industries were then analyzed for current

activity in the region on the next slide.)

Job

Multiplier

Job

Multiplier


Arizona IMPLAN Model Washoe Lyon Carson City

Storage battery manufacturing 4,651.7 na na na

Wholesale trade businesses 962.9 1.06 0.50 0.51

Food services and drinking places 836.9 0.92 0.72 1.00

Aluminum product manufacturing from purchased aluminum 639.4 na na na

All other basic inorganic chemical manufacturing 617.4 na na na

Carbon and graphite product manufacturing 617.2 na na na

Real estate establishments 591.3 1.22 1.02 1.00

Services to buildings and dwellings 483.2 1.40 0.62 0.90

Employment services 375.1 1.16 na 0.74

Management of companies and enterprises 336.1 0.94 0.25 1.02

Transport by truck 312.5 1.38 1.34 0.33

Offices of physicians, dentists, and other health practitioners 287.9 1.07 0.63 1.41

Securities, commodity contracts, investments, and related activities 261.0 na 0.04 na

Retail Stores - General merchandise 259.9 1.13 na 1.54

Private hospitals 256.0 0.81 na 1.65

Maintenance and repair construction of nonresidential structures 242.5 1.18 0.93 0.87

Retail Stores - Food and beverage 228.2 0.77 1.11 0.85

Architectural, engineering, and related services 199.4 1.22 1.37 0.56

Accounting, tax preparation, bookkeeping, and payroll services 193.5 1.26 0.68 1.06

Retail Stores - Motor vehicle and parts 191.1 1.01 0.67 2.15

Management, scientific, and technical consulting services 177.2 0.45 0.13 0.29

Automotive repair and maintenance, except car washes 173.0 1.65 0.90 1.67

Monetary authorities and depository credit intermediation activities 172.8 0.74 0.53 0.65

Retail Nonstores - Direct and electronic sales 160.1 1.21 na 0.94

Direct Jobs = 6,500 Industries directly operated by Tesla

Indirect Jobs = 11,690 Higher share of emp versus nation

Total Jobs = 18,190 Lower share of emp versus nation

Employment Multiplier = 2.80

Indirect

Jobs

2013 Location Quotients

Job Impacts Sorted by Industry


Year Period Area Ind Code Industry Avg Employment % of NV

2014 1st Qtr Nevada 31-33 Manufacturing 41,144

2014 1st Qtr NW Nevada1 31-33 Manufacturing 19,400 47.2%

2013 4th Qtr Nevada 325 Chemical Manufacturing 1,631

2014 1st Qtr Nevada 326 Plastics & Rubber Products Manufacturing 2,804

2014 1st Qtr Nevada 327 Nonmetallic Mineral Product Mfg 2,657

2014 1st Qtr Nevada 331 Primary Metal Manufacturing 1,385

2014 1st Qtr Nevada 332 Fabricated Metal Product Manufacturing 5,218

2014 1st Qtr Nevada 333 Machinery Manufacturing 1,602

2014 1st Qtr Nevada 334 Computer and Electronic Product Mfg 2,793

2014 1st Qtr Nevada 335 Electrical Equipment and Appliances 690

2014 1st Qtr Nevada 336 Transportation Equipment Manufacturing 1,381

2014 1st Qtr Nevada 339 Miscellaneous Manufacturing 7,838

27,999

2014 1st Qtr NW Nevada1 325 Chemical Manufacturing 537 32.9%

2014 1st Qtr NW Nevada1 326 Plastics & Rubber Products Manufacturing 1,170 41.7%

2014 1st Qtr NW Nevada1 327 Nonmetallic Mineral Product Mfg 606 22.8%

2014 1st Qtr NW Nevada1 331 Primary Metal Manufacturing 449 32.4%

2014 1st Qtr NW Nevada1 332 Fabricated Metal Product Manufacturing 3,027 58.0%

2014 1st Qtr NW Nevada1 333 Machinery Manufacturing 1,104 68.9%

2014 1st Qtr NW Nevada1 334 Computer and Electronic Product Mfg 2,260 80.9%

2014 1st Qtr NW Nevada1 335 Electrical Equipment and Appliances 281 40.7%

2014 1st Qtr NW Nevada1 336 Transportation Equipment Manufacturing 826 59.8%

2014 1st Qtr NW Nevada1339 Miscellaneous Manufacturing 2,601 33.2%

12,861 45.9%

1. Northwest Nevada counties include Carson Ci ty, Churchi l l , Douglas , Lyon, Storey, & Washoe

Disclosure l imitations for deta i led industries occur where l imited establ ishments exis ts .

Source: Department of Employment, Tra ining, & Rehabi l i tation

Industries Associated with Electric Vehicle Battery Manufacturing

Manufacturing Employment by Industry

Northwest Nevada


2000 2,848 286 896 3,134

2001 3,862 435 522 1,017 4,819

2002 4,237 190 1,121 4,427

2003 3,533 383 576 3,916

2004 4,120 299 681 4,419

2005 4,942 544 520 5,486

2006 3,791 487 436 238 4,714

2007 2,047 216 203 81 2,466

2008 1,136 117 1,055 1,253

2009 546 70 43 616

2010 396 12 4 408

2011 495 7 162 502

2012 633 8 108 641

2013 934 3 59 937

Year Employment Emp Ch.

2000 187,469

2001 191,521 4,052 95 119

2002 193,270 1,749 242 253

2003 195,433 2,163 163 181

2004 198,126 2,693 153 164

2005 200,231 2,105 235 261

2006 206,519 6,288 60 75

2007 208,645 2,126 96 116

2008 206,218 -2,427 (47) (52)

2009 198,510 -7,708 (7) (8)

2010 197,358 -1,152 (34) (35)

2011 196,650 -708 (70) (71)

2012 197,793 1,143 55 56

2013 200,292 2,499 37 37

Avg (positive #s only): 126 140

Sources: Washoe County Assessor Data & Department of Employment, Training, & Rehabilitation

Year of

Construction

New Single-Family

Homes per 100 New

Jobs

New Residential Units

per 100 New Jobs

Single

Family

Residence

Condo or

Townhouse

Condo or Townhouse

valued as apartment

use

Total

Residential

Units

Two or More Attached

Units

New Residential Construction per 100 New Jobs

Washoe County, Nevada


Source: Center for Regional Studies based on documented approvals of tentative maps. Expired and inactive tentative

maps are included in totals.

CONDO MF SENIOR SF Total

Approved 2,065 4,510 447 10,065 17,087

Under Construction 362 1,154 405 8,652 10,573

Stopped Construction 629 1,560 2,189

Total Approved-Unbuilt 3,056 5,664 852 20,277 29,849

Approved-Unbuilt Residential Units

Washoe County, Nevada


Tesla Incentives Package

• A 100 percent sales tax abatement for 20 years:

▫ Storey County to receive majority of local sales tax

revenue, if properly administered (use vs. sales tax)

▫ Other counties:

Loss of Storey County’s “guaranteed” status-FY 2013-14 SCCRT

payment of $1.48 million, County generated $1.36 million

Direct purchases of construction materials and equipment from other

counties or purchases taxed under use tax

▫ State of Nevada: 2% sales tax rate (some argument this rate

is not included in the abatement )



• A 100 percent real and personal property tax

abatement for 10 years:

▫ Storey County to receive all local property tax revenue

▫ No revenue for other counties

▫ State of Nevada: $0.17 tax rate per $100 of assessed value

• A 100 percent modified business tax (payroll tax)

abatement for 10 years:

▫ State of Nevada General Fund



• Transferable tax credits worth approximately $195

million

▫ State of Nevada

• Discounted electricity rates for eight years: $8

million

▫ Taxpayers


Using Existing Data

• Tesla promised at least 50% of employees will be local

▫ 3,250 employees will be new to the area

• GOED estimates 16,200 indirect jobs ▫ No restrictions

▫ Maximum impact scenario-all jobs will be new to the area


Using Existing Data

• 59% of Storey County employees live in Washoe County, 15% in Lyon County, 7% in Storey County, 4% in Carson City, and 4.6% outside of the State

▫ Unlikely new residents will live in Storey County

• On average, there are approximately 2.04 residents per

1.0 employee in the State

• There are 2.69 people per household in the State


Using Existing Data

• This results in approximately 6,322 new residents and 2,350

new households in the State from direct impacts

• Up to an additional 31,542 new residents and 11,726

households can be added if all indirect employees are new to

the area

County

Estimated

New

Residents

Estimated

New

Households

Estimated

New

Residents

Estimated

New

Households

Washoe 4,214 1,566 21,023 7,815

Lyon 1,039 386 5,184 1,927

Storey - - - -

Carson City 294 109 1,464 544

Mineral 206 77 1,027 382

Douglas 196 73 976 363

Other Nevada 374 139 1,868 695

Total 6,322 2,350 31,542 11,726

Direct Impact Indirect Impact


What is Needed

• Infrastructure/Capital Improvements-roads,

water, sewer, expanded administrative offices,

parks, schools, etc.

• Residential services-police, fire, judicial, parks,

education, recreation, road maintenance

• Commercial services-business licenses,

permitting, police, fire, judicial, road

maintenance


Can We Do It?

• We’ve done it before:

▫ High in-migration

▫ Population increased by 19,705 people between 2000 and 2001, over 63,000 new residents in five year period (2001-2005)

▫ Enough units planned to house majority of new residents


Can We Do It? • What’s different:

▫ Older Demographics-different impacts:

Fewer school impacts

2013-59% of home buyers had adult or no children, 2014-57%

Median buyer age 49.5 in 2012, 40 in 2013, and 50 in 2014

Shift in demand from Fire/EMS to parks and recreation services


Can We Do It?

• What’s different:

▫ Service level reductions: WC from 3,199 FTEs in FY 2007-08 to 2,546 in FY 2014-

15 (-20%) From 7.82 to 5.90 FTE per 1,000 residents

Reno from 1,883 FTEs in FY 2007-08 to 1,205 in FY 2014-15 (-35%) From 8.89 to 5.20 FTE per 1,000 residents

Sparks from 860 FTEs in FY 2007-08 to 574 in FY 2014-15 (-32%) From 9.34 to 6.27 FTE per 1,000 residents


Who Pays • Impacts of Tesla abatement on Lyon and Washoe

Counties not expected to be significant

• Impacts of residents in these counties will be significant

• Adjusting FY 2014-15 budgeted General Fund revenues and expenditures to include only residential sources results in the following:

Adjustments include residential portion of property tax revenue, exclusion of all business licenses and permits, and community development related revenues and costs.

Entity

City of

Reno

City of

Sparks

Washoe

County

Per Capita Revenues 511$ 470$ 562$

Per Capita Expenditures 613 553 670

Difference (102)$ (83)$ (107)$


Who Pays

• School impacts:

▫ Average of 0.14 students per capita in Washoe County

▫ Estimated 596 new students in Washoe County from

direct employees and up to 2,974 from indirect (1% and

5% of current enrollment)

▫ $5,585 FY 2014-15 Basic Support per student


Who Pays

• School impacts:

▫ 51% of operating expenditures provided through local

sources (property tax $0.25, sales tax 2.6% and charter

school revenue)

▫ 49% of operating expenditures provided through State

General Fund, funded in part by Modified Business Tax,

sales tax, and property tax revenue

▫ Tesla to contribute $37.5 million over 5 years to Education

Gift Fund (starting 2018)


Tesla Difference

• Resident revenues will be higher than average

▫ Average Washoe County wage (1Q 2014) was

$21.40 compared to $27.35 estimated by GOED for

direct employees and $25.16 for indirect employees

Higher sales and property tax revenues (51% of

Reno GF revenue, 62% for Sparks and 72% for

Washoe County)

• Expenditures are unlikely to increase

• Assessed values region-wide will increase with

increased demand for housing


Tesla Difference

• Increased service levels for existing residents

(Southeast connector, RTC, etc.)

• Revenues from indirect and non-related businesses

▫ Property tax, sales tax, business licenses and

permits, and construction-related fees

• High wages likely to create competition for

employees, resulting in higher region-wide wages for

high demand industries

▫ Higher sales and property tax revenues


Discussion…


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