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John L. Smith On The New Innovation Zone Details

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New details are emerging about the innovation zones idea that Governor Steve Sisolak pitched during his State of State address. 

 

The zones have been touted as counties that are set up by corporations as a way to draw businesses to the state. 

 

Nevada-based Blockchains LLC wants to create one on a large piece of desert outside of Reno. 

 

The governor gave more details in Zoom call recently and state of Nevada contributor John L. Smith was listening in. 

Support comes from

He said that the governor brought along Michael Brown from the Governor's Office of Economic Development and Jeremy Aguerro from Applied Analysis to "gin up support" for the idea by focusing on the upside and the numbers attached to the exclamation points.

“It would give them something they’re calling semi-autonomous status," Smith said, "They would be able to control the property that they own, that the company owns, and that’s a lot of property.”

Blockchains LLC., owns 67,000 acres of land in Storey County. It is a big footprint with a lot of potential.

The difference with an innovation zone compared to other developments would be the company's ability to impose taxes and perform other duties of a government like trash collection.

“That would put them in a whole different status. A county within a county,” Smith said.

It is the tax issue that remains a little fussy for Smith.

“That’s where I’m, frankly, a little confused about what the details of that were,” he said.

But the taxes were not the focus of the recent Zoom call about the plan. Instead, Smith said, the focus was on the money that would roll in because of the investment.

Blockchains LLC., would invest $250 million initially and then a billion over the next 10 years. Smith calls it a "substantial investment." The plan is to pour more money into it over the years because it is essentially a housing development with commercial and corporate areas.

“If you take it apart a little bit, it’s a big housing development, planned community. If we called it Summerlin North, it would probably have less mystery to it,” Smith said.

Critics have compared the idea to the company towns of old where mining companies ran the town. Smith named Ruth and McGill in eastern Nevada as two towns that were run by copper mining interests.

The idea of a company town is not the only criticism. Smith said some people are looking for something more traditional to boost the economy during one of the worst economic downturns in the state's history.

Others want to see the Legislature tackle perennial problems in the state like public education and justice reform, not a brand new, untested "pie-in-the-sky idea," Smith said.

Another issue on the table is the environmental impact. Blockchains LLC., has bought the water rights in a rural area miles away from the property with the idea of piping the water to their development.

Environmentalists have come out against that plan.

“Water is always controversial and this is certainly something that smells like it might get litigated,” Smith said.

Yet another problem is public vetting of the issue. Smith said that when the idea of funding the Raiders stadium with taxpayer dollars came up there was a lot of discussion and public meetings about it.

So far, that hasn't happened with the innovation zone idea.

“More work needs to be done, for sure, to structure this and to have it kind of take some of the mystery out of it, so that people relate to it more as something that could happen and could help, rather than just burden yet another school district or yet another water issue,” Smith said.

Despite the criticism, there could be an upside, Smith said. There is a lot of buzz surrounding cryptocurrency and the blockchain technology that helps it work.

Plus, if it does work, it could lure more companies to Nevada.

“It would throw open the door for not just following in the Blockchains footsteps necessarily. It would actually say, ‘Hey wait a minute, Nevada will pretty much let you do what you want,' because this is really what’s happening here," Smith said.

Guests

John L. Smith, contributor

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