Does Nevada's 1.3 blns in Tesla Corporate Welfare Make Sense? (bankruptcy, 2014, real estate)

[Potential_Landlord]

Do you guys think that Nevada's 1.4 billion giveaway to Tesla for locating the car battery gigafactory there makes economic sense for the state? Or any state? - From what Mr. Musk said other states were offering even more incentives than Nevada... I wonder which one that was. It's kind of a jump from 82 millions so far offered for the biggest deal to 1.3 billions.

[lycos679]

Looks like it was $1.25 billion with the requirement they invest $3.5 billion. There is speculation that they are going to invest $10 billion and have an economic impact of $100 billion.

Nevada offered $1.25 billion in tax breaks to win Tesla

[Hemlock140]

Sure. The reason several states were competing for that plant is the revenue it will bring to the state in other forms. There is no income tax which helps Tesla attract employees, but those 6,500 people working there and 65,000 people working in related jobs will all spend money in Nevada, even buying homes and cars. They do have sales and property taxes. Assuming some of the unemployed in Nevada are hired, that will save the state money.

[Lowexpectations]

You also have to take into account how much of the 1.25 billion is tax breaks that end up not costing the state anything at all.

Of course it makes sense. The alternative is that the factory locates somewhere else and Nevada, instead of getting all the dollars from Tesla's employees paying taxes and buying things, would instead get nothing. How is zero dollars better than a bunch of dollars?

[Potential_Landlord]

Originally Posted by JasonF

Of course it makes sense. The alternative is that the factory locates somewhere else and Nevada, instead of getting all the dollars from Tesla's employees paying taxes and buying things, would instead get nothing. How is zero dollars better than a bunch of dollars?

I think it all depends on how reliable the investor is. Some fly-by-night operations just take the money and then declare bankruptcy. Tesla does not look it it operates that way. Seems a safer bet than most.

Originally Posted by Potential_Landlord

I think it all depends on how reliable the investor is. Some fly-by-night operations just take the money and then declare bankruptcy. Tesla does not look it it operates that way. Seems a safer bet than most.

But what taking is happening? Is the state writing a giant check to Tesla? Or is Tesla simply not writing a giant check to the state?

From the article, it seems it's almost entirely tax breaks. A teeny tiny portion is from energy discounts, but that's offset by Tesla agreeing to pay $7.5 million/year for education.

Basically, Nevada has the option of no money because Tesla locates somewhere else, or a giant pile of income taxes and sales taxes from Tesla employees.

Apparently the state would rather have a bunch more money than no more money.

[Tall Traveler]

I think it's likely worth it, especially if they can parlay that into attracting other large employers.

[Jukesgrrl]

Originally Posted by Potential_Landlord

Do you guys think that Nevada's 1.4 billion giveaway to Tesla for locating the car battery gigafactory there makes economic sense for the state? Or any state? - From what Mr. Musk said other states were offering even more incentives than Nevada... I wonder which one that was. It's kind of a jump from 82 millions so far offered for the biggest deal to 1.3 billions.

I live in Tucson, Arizona, and it's been one of the cities trying to contend with Nevada. Supposedly Arizona submitted a final offer to Musk that they have, interestingly, not revealed to the public. Tucson's mayor has been quoted as saying San Antonio offered $800 million and Tucson's offer was not that high. But who knows what the states have kicked in to enhance what the site cities are offering. These Tesla employees would be paying state taxes in Arizona, so there's something in it for this state as well as the city.
Tesla to name finalists for plant Tucson seeks

I often think some of these excessive tax abatements are ridiculous, but sometimes they do work out. I used to live in Pittsburgh where the citizens strongly voted against public money being used to build separate baseball and football stadiums to replace Three Rivers Stadium. The powers that be in Pennsylvania and the city overruled the voters and Three Rivers was replaced with PNC Park and Heinz Field, which share parking lots. In fact, the new facilities turned out to be GIANT money makers for the city. In addition to the revenue they generate, having the beautiful stadiums there right on the river, attached to a riverfront park, has revitalized the entire North Side of Pittsburgh, which is right across the Allegheny River from downtown. A place that used to be dangerous and down at the heels is now the hottest place to live. New condominiums and hotels have been built; the new Rivers Casino has five restaurants, live entertainment, and gaming; residential areas are being fixed up as fast as you can say "newcomers;" and a big New York real estate firm just bought a gigantic, formerly not-so-nice mall/rental apartment complex in the neighborhood and is investing tons of cash into making it a showplace.

[ScoopLV]

Originally Posted by Tall Traveler

I think it's likely worth it, especially if they can parlay that into attracting other large employers.

Ding! Ding! Ding! We have a winner.

Nevada needs Tesla like an ugly-high school dude needs a date on prom night. (Fairly apt simile, there.) If Tesla works out, maybe we can attract businesses which don't lure people who are bad at math into a casino, or haul mineral resources out of the ground (and not having the decency to pay the public for their mineral wealth, like Alaska insists upon).