When it comes to rural communities, flexibility and community support are essential proponents for any business. Right now, there are a lot of interesting things happening in rural Nevada. At the top of the list is the issue of innovation zones. A company proposing to create self-governing, corporate-owned communities within thousands of acres of land it owns in a rural county in northern Nevada has withdrawn its proposal, claiming a lack of support from Democratic Governor Steve Sisolak.
“Blockchains will not be participating in any further committee hearings,” said Jeffrey Berns, founder and CEO of Blockchains, referring to the legislative committee studying the company’s proposed “innovation zone” in Storey County, east of Reno.
The letter, obtained by Nevada Business Magazine, said one of the biggest problems was the “proposed legislation appeared to have no champion.” Sisolak supported the proposal during his “State of the State” address this year, but in April formed a committee to study the project.
The proposal to create a self-governing county also faced strong opposition from local and state development officials in Storey and Elko counties, as well as Carson City.
“Given the personal and public assurances you made regarding your commitment to this project, you can imagine how greatly disappointed we are in the effort put forth,” Berns wrote in the letter to Sisolak.
Blockchains owns almost 67,000 acres of land around the Tahoe Reno Industrial Center in Storey County. Its proposal would have created an innovation zone that would enable Blockchains, and other companies, to create their own county government in exchange for growing the state’s technology sector.
In July, the company released plans for “Painted Rock Smart City and Innovation Park,” a settlement for more than 36,000 residents, with 15,000 homes, 11 million square feet of commercial space and an economic output reaching $16 billion with 75 years of development.
Austin Osborne, a spokesman for the Storey County Commission, said he didn’t know if Blockchains would try again at some point to move forward with its proposal. Osborne made it clear Storey County still supports blockchain technology.
“They still own the land,” Osborne said. “We will roll out the red carpet to help Blockchains as a company and a future innovator of technologies regardless. That goes without saying.”
Osborne stressed that they wanted to see the development happen and that the county’s master plan supports its development.
The innovation zone proposal sparked concern from county and development officials about ceding excessive amounts of power to technology companies.
“It’s kind of like moving out of the house and mom and dad still do your laundry and pay the bills,” Osborne said. “To say you need to separate from the county, we completely disagree with that.”
Philip Cowee, executive director of the Northern Nevada Development Authority, agreed with Osborne, saying personally he thinks innovation zones can work but opposes the autonomy Blockchains was seeking.
“Not good,” said Sheldon Mudd, executive director of the Northeastern Nevada Regional Development Authority in Elko.
“With most of our land in rural Nevada already federally owned, it’s already difficult to generate tax revenue sufficient enough to meet our ever-growing demands,” Mudd said. “If the innovation zones were subject to county jurisdiction, then folks may be a little more apt to take them into consideration.”
With the company’s proposal tabled for now, officials continued to focus on the needs of rural Nevada communities from housing and infrastructure to broadband.
“We have a lack of infrastructure that is considered baseline for industrial growth; natural gas, broadband and, depending on where you’re at in the region, adequate water, power and sewer to support diversification,” Mudd said. “Housing is an issue almost everywhere as our local builders are a year [or more] out on projects and none choose to come to rural Nevada from outside of the area.”
Mudd said the lack of infrastructure contributes to their workforce issues as many come to Nevada in hopes of making an average wage of $80,000 a year in the mines but can’t stay for lack of housing, or they live in southern Idaho or Utah and simply take those economic dollars to another state.
“It’s a tough gig, but we’ll keep chewing that elephant one bite at a time,” Mudd said.
Despite the coronavirus pandemic impacting business in other parts of Nevada, rural counties have been able to attract new businesses. A land-based salmon farm south of Winnemucca, an explosives plant north of Carlin, even a cannabis dispensary in Jackpot in the very northeastern corner state are set to call rural Nevada home.
West Coast Salmon AD, a Norwegianbased company plans to build a salmon farm using recycled groundwater about 70 miles north of Lovelock and 20 miles south of Winnemucca. The farm is expected to begin production by the end of 2022 with the first harvest of salmon two years later.
Other companies moving in are Ribus Inc., a vitamins and supplements manufacturing company in Storey County, as well as Northern Nevada 3PL, a footwear distribution and fulfilment company and Samsarg Inc., an aircraft parts, manufacturing and maintenance company, both in Lyon County.
“We provide resources to businesses, so they stay here as well as attracting new businesses,” Cowee said of his agency. “The last thing we want to do is work hard to bring in new business and we lose the businesses we have.”
Among the resources the Northern Nevada Development Authority offers is workforce training. Currently, the agency has been working with Western Nevada College in Carson City on training workers to fill the new jobs.
“We are trying to get the workers in our area the skills they need,” Cowee said. “It’s a matter of get people the skills to fill those jobs.”
But economic development officials stress that as new businesses arrive in rural Nevada it only increases the need for crucial investments in quality and available housing, an issue that remains challenging for local leaders to address. Bill Brewer, executive director with the Nevada Rural Housing Authority, said the lack of quality and affordable housing is hurting economic development in many ways, especially in rural communities.
“We are working with the city of Carlin where there is tremendous economic activity all around but the benefit of that goes to Elko (23 miles to the east),” Brewer said. “So, there is poor old Carlin [with] no place for people to live and no new housing being created.”
Brewer expressed concern that as all that “fantastic economic activity passes them by,” if the town had some resources and housing, they could benefit from that growth.
“It’s the same with Lovelock, where they got a big salmon farm coming in,” said Brewer, adding that there is no housing so it’s not going to benefit them in terms of economic growth unless they can get some housing units built or renovated.
Patricia Herzog, director of rural economic and community development with the Governor’s Office of Economic Development (GOED), said she knew of one company that considered moving to Nye County before a lack of housing for its workforce forced them to call off the deal.
“It takes a long time to attract a company to rural Nevada,” said Herzog. “It’s a challenge. It’s really an issue throughout the Western United States.”
Part of what Brewer is trying to accomplish as head of the Nevada Rural Housing Authority is using its community development department to build new housing or apartment units and upgrade existing inventory in rural communities.
In recent years, the agency has completed projects in Winnemucca, Yerington and Carson City. “We try to build and own housing and we are doing what we can,” Brewer said. “That’s one of the frustrating things for me is our limited bandwidth. There are probably a dozen communities we should be in right now building some housing and we simply don’t have enough bandwidth to do that.”
As an example, Winnemucca is not a big city but it’s one of Nevada’s more significant rural communities, and there is currently no available rental housing there, Brewer said.
“There is not even a hotel room available, generally speaking, because of the lack of housing. So that begins to put a real damper on economic development and all kinds of things when people can’t find a place to stay.”
Brewer said they are working with local officials to bring additional housing units to town but, “it is the same [issue] in many of our rural communities.”
“It is just a challenge to get the housing that’s needed,” Brewer said. “We have been included and had a seat at the table for the distribution of the American Rescue Plan (ARP) money that our state has received. We appreciate that very much.”
Nevada received $2.7 billion of ARP funds from the U.S. Department of Treasury. Brewer believes they’ll receive some significant housing funds through the ARP, but he didn’t know how the funds would be distributed between urban and rural areas.
The ask was $500 million by the Nevada Housing Coalition with $275 million for new construction and affordable housing units, $125 million for preservation of existing housing, $50 million for home ownership and $50 million for land purchase.
“One of the things we consistently hear is we need land in order to build housing,” Brewer said. “This would provide some funding for land acquisition.”
He noted that if the funds were distributed based on population then, with 17 percent of the state’s population, rural counties in Nevada would receive about $80 million in housing assistance.
Beyond housing, Mudd said northeastern Nevada needs infrastructure and builders. His agency encourages and coordinates economic development in Elko, Eureka, Lander, and White Pine counties.
“If we had a more robust natural gas network, a few more rail spurs, and two or three 100,000-square-foot buildings, the sky would be the limit,” Mudd said. “Our organization has seen a 350 percent increase in business relocation inquiries since 2018.”
“The kicker is, they all want a turnkey solution,” Mudd added. “On average, these companies are asking for 100 acres, which we have, and a 324,000-square-foot building. That is average and, oh yes, and they want them now.”
Mudd said with northeastern Nevada a single day’s drive by commercial truck to every major metropolitan service area west of the Rockies, the warehousing and distribution industries likely have the most potential for success. “We just need buildings to put them in,” he explained.
Cowee said it’s all about the supply chain now as demand continues to drastically rises due to increased business activity. He said there’s demand throughout rural Nevada for plastic piping, electrical wire, windows and other building supplies.
“If you want it, you might have to get it now,” Cowee said. “It’s not going to be there in a month.”
As most of the attention has been focused on the impact of the coronavirus pandemic in Clark and Washoe counties, Mudd credited leadership in rural communities throughout the state for, “keeping a level head through this whole thing.”
“They have, for the most part, been able to rise above the hype and evaluate the virus for what it is and take appropriate actions to inform rural Nevadans of the risks and the precautions that should be taken in order to avoid infection,” Mudd said.
Further, Mudd said local officials worked hard to ensure that local businesses stay open so that rural Nevadans livelihoods remain intact.
“Rural Nevada’s industry, specifically mining, have been phenomenal in not only modifying operations to ensure continued production but have put up millions of dollars to help support the small business owners that keep our local economy moving forward,” Mudd said.
Herzog said GOED tried to assist rural counties by distributed federal funding for coronavirus-related projects in rural parts of Nevada.
GOED funded a wide variety of projects from $43,600 on negative pressure rooms and $139,100 covered parking structure at Nevada Health Center in Elko County to $332,000 on a new senior center project in Wells.
Mudd said one of the challenges in Elko County has been coronavirus-related mandates.
“Any time you try to force these policies on rural Nevadans, you’re going to have a fight on your hands and people will push back for the sake of pushing back regardless of the threat,” Mudd said.
Mudd added that there are opportunities to move forward if leaders continue to approach this with prudence, addressing the threat of the virus while ensuring the liberties of their constituents, then rural Nevada should fare well.