Nevada economic officials: Rail, lithium projects set region up well for recovery

CARSON CITY, Nev. — In March, Nevada’s economic leaders were tasked with getting the state back on a positive post-pandemic track to long-lasting recovery.

A piece of that roadmap, they’ve discovered, could come from a rise in rail.

This was epitomized Tuesday when officials announced that Los Angeles-based industrial real estate developer Industrial Realty Group had recently purchased the 224-acre Western Nevada Rail Park east of Fernley to construct a large-scale railroad freight operations and logistics center.

Rail development opportunities in Northern Nevada and beyond was among highlights and strategies discussed during the Northern Nevada Development Authority’s annual Economic Roundup, held virtually Wednesday morning.

“I see a lot of jobs coming out of this, we see a lot of businesses that will benefit from this throughout the region and throughout the state,” NNDA CEO Rob Hooper said of the planned Western Nevada Commerce Center.

Michael Brown, executive director of the Governor’s Office of Economic Development, agrees. Speaking during the virtual event, Brown said the lack of railroads and infrastructure in Nevada has “hampered” the state’s economic development, something Nevada wants to change.

Brown pointed to Utah’s investment in infrastructure, building a “third lane” from the Arizona border north to Salt Lake City, as a prime example of what Nevada needs to replicate.

“They are really focused on making investments that will pay off in the future, and that's the kind of stuff we're going to have to do,” Brown said.

In Northern Nevada, Hooper said diversification of the economy over the past decade has been crucial as the region rides out the COVID-fueled slowdown. In fact, he said the value of freight shipping out of the region is now higher than the value of freight coming in.

“That’s very exciting because that means we now live in a production economy in Northern Nevada, not a consumption economy,” Hooper continued. “That’s one of the reasons we’re weathering this COVID storm so well. That diversification has taken literally decades to get to. If we didn’t have that, we would have a very slow recovery going on.”

The NNDA — which services Carson City, Douglas, Lyon, Mineral and Storey counties — is no stranger to helping lead a region out of a recession. Since 2010, the organization has assisted more than 100 relocating and expanding companies, which has created more than 5,000 new jobs, and generated more than $2 billion in economic impact, according to Hooper.

The growing sectors continuing to fuel the region’s recovery, Hooper said, include manufacturing, construction, logistics, mining and agriculture. Other industries, however, are “falling a little bit behind,” said Hooper, pointing to information technology, healthcare, aerospace, aviation and tourism.

Along with working to attract new companies to the region, NNDA is also focused on retaining its current employers and “helping them expand” and “bring more success” to the region’s economy, Hooper added.

A leader in lithium?

Zooming out, much of the Silver State’s recovery and resiliency hinges on “building on its strengths” and “building industrial clusters,” Brown said.

One of the state’s “most exciting” clusters centers on the work GOED and other regional partners are undertaking to close the lithium manufacturing chain in Nevada, Brown said, specifically referencing Reno-based Lithium Nevada Corp., which is in the process of designing and permitting a lithium mine and processing facility in rural Humboldt County.

According to previous reports, the company’s $1.3 billion Thacker Pass lithium claystone project near Orovada would create approximately 1,000 jobs during construction and employ more than 285 people upon completion; the company expects the project will bring in more than $65.8 million in new local and state tax revenue.

Based on those economic projects, in September the GOED board approved $8.6 million in tax abatements for Lithium Nevada, including a partial sales tax abatement worth $5 million, a $3.3 million property tax abatement and about $225 million in payroll tax abatements.

“Right now, if you’re mining lithium, it ends up in China, and then I think it circles the world twice before it finds its way into your phone,” Brown said Wednesday. “We want to find a way to get this 21^st-century mineral’s whole product cycle in Nevada, and we're making success with that with the approval of the lithium processing facility at Lithium Nevada. That will bring home — from China — one of the significant parts of that manufacturing chain.”

Other opportunities for the state include bringing more data centers, renewable energy projects, and even film crews to Nevada, Brown said. Regarding the latter, Brown said GOED is in discussions with three companies about building a movie production studio somewhere in the state.

“With Hollywood closed,” Brown said, “a lot of the wealthy folks in Hollywood who had homes in Lake Tahoe and had homes in Henderson have been looking around and saying, maybe we could do more movies here?”

Brown’s immediate priority, though, is trying to acquire “every possible federal resource we can find.”

GOED’s target, he said, is getting about $120 million of CARES Act relief money out the door for everything from small businesses to commercial landlord assistance to community colleges for workforce training.

All the while, GOED is working to fully fund the infrastructure bank that was created in the 2017 legislature.

“When I took this job, I didn't think I was going to be spending 9-10 months of it in a pandemic,” said Brown, who was named GOED executive director in October 2019. “But, there’s nothing like a pandemic to bring real focus to your weaknesses and your strengths and let you focus on what really matters.”