The states passed over by Tesla Motors for its 6,500 job Gigafactory turned their sights to a second, possible job-generating battery factory that the car maker has said it could build.
"We lost Apple to Austin and got them the second time around," said Barry Broome, president/CEO of the Greater Phoenix Economic Council, referring to the tech company's supplier factory in Mesa that followed a failed bid to land Apple in Arizona. "I'm optimistic about Tesla in the future."
Nevada Gov. Brian Sandoval has called a news conference for 7 p.m. ET Thursday in Carson City where the deal is expected to be announced. A source told USA Today Wednesday that Tesla (TICKER: TSLA) had chosen Nevada for its giant battery factory. Tesla recently confirmed that it has been excavating at an industrial park near Reno, but stopped short of saying that it had made it the final choice for plant.
A Tesla spokesperson told a reporter at Texas' KVUE-TV, in Austin, that talks will continue with Texas and four other states, and that the company always planned to choose more than one site.
The February announcement that Tesla was shopping for a factory location touched off a high-stakes bidding war among California, Nevada, Texas, Arizona and New Mexico. All have tax benefits and other incentives, including cash grants, to land major economic developments.
Nevada recently passed a state law that could discount electricity 30 percent for the Tesla project in the first year.
Musk has said he wants the factory to be powered by wind, solar or other renewable energy. But the factory is also likely to be tied into the larger electricity grid to supply steady power around the clock and back up intermittent renewable power sources.
California lawmakers created draft legislation that would have offered incentives to Tesla to keep the battery factory in Tesla's home state, but convened last week without voting on the bill.
"Tesla and Tesla's investments have always gone to California," said Joe Wallace, managing director of the Coachella Valley Economic Partnership, a business incubator near Palm Springs, Calif. "They don't have an aversion to California."
Wallace argued that an inhibitive business environment has hurt the state's ability to compete for jobs, including those that the Gigafactory would have generated.
"If you fight and lose, you live to fight another day. That's fine," Wallace said. "But we didn't fight."
Brook Taylor, a spokesperson for the California Governor Jerry Brown's Office of Business and Economic Development, declined to comment on what prevented California and Tesla from reaching a deal.
"No other state has added more jobs than California since the recovery began and we'll continue to work closely with businesses, including California-based Tesla, that want to grow here," Taylor said in an email.
ARIZONA SPECIAL SESSION
Arizona Rep. Ethan Orr, R-Tucson, suggested in June that Arizona call a special session to consider additional incentives to compete for the factory, in light of California's proposal.
However, legislative leaders said at the time that Tesla had not provided a clear indication of what the state would need to do to get the factory, and they would not call such a session without that.
"A special session sounded like a good idea at the time, but in hindsight, I don't think a special session would have helped," Orr said Wednesday. "They made a very public show of playing states against each other, and that can lead to a race to the bottom."
He said Arizona would have a better chance at landing the next economic development project by increasing the funds available to close deals, providing a better educated workforce, lowering energy costs and being able to assemble and permit land faster.
Chris Woodyard for USA Today in Los Angeles and KVUE-TV in Austin contributed to this report.
business climate Great Recession Las Vegas gaming revenue northern Nevada corporate income tax Smart guy tech industry Reno Atlanta Twitter California
USA TODAY reporter Hadley Malcolm interviews former Reno Gazette Journal Editor Beryl Love about why Nevada beat out the competition of four other states.
Automatically Generated Transcript (may not be 100% accurate)
00:02 Apple is going to build a giant battery factory in
00:05 Nevada Nevada 185 state competition for task of business. And governor
00:10 Brian -- expected to announce the deal tonight. I'm having not
00:14 come and this is USA now for September 4 2014. I'm
00:18 joined today by -- loud he's the executive editor of USA
00:21 today's national news desk. But before that he was the editor
00:25 of the Reno gazette journal. He lived in Nevada for almost
00:29 seven years we're talking to him about what the Catholic deal
00:32 means. So well tell me why do you think Nevada got
00:36 the steal the first place they won out over four other
00:38 states. I think there's a lot of reasons first of all
00:41 they really went after it the state. Was trying to reinvent
00:44 itself from an economic development standpoint. Long story short you know
00:48 they're going through the Great Recession -- seen. Month over month
00:52 losses in gaming revenue. And just a big loss of jobs
00:56 so they really went after tests left. But also they've got
00:59 they're almost like the perfect place to be their very close
01:02 to test those manufacturing facility in California. They're on the I
01:05 eighty corridor. There is no corporate income tax of the business
01:09 climate is really great. And by the way you can mine
01:13 lithium in the matter which is key to these batteries. Why
01:17 isn't about you were telling a little earlier white about it
01:19 so focused on the tech industry right now. Well they had
01:23 to reinvent themselves from it economic development standpoint they you know
01:26 years and years. The economy being driven by the gaming industry.
01:31 And with you know casinos being. You know popping up all
01:36 over the place. You know Las Vegas is always gonna probably
01:39 be a world class gaming destination. Not so much northern Nevada
01:42 so they lost a lot of you know revenue that was
01:45 driving the local economy and it lost a lot of jobs.
01:48 The real estate market you know that was another sad story
01:52 was kind of masking the economic symptoms for awhile because. They
01:56 were getting a lot of development from real estate you know
01:58 that hit bottom during the housing crisis and so they just
02:01 really needed to determine you know what is our future going
02:04 to be. What about what this battery factory will mean for
02:09 tasked with consumers what is what will they get -- as
02:12 well. At first when you hear it it's a battery factory
02:15 thing and one that's not too exciting you know batteries really.
02:18 But that's what's really driving the cost of electric cars right
02:22 now the batteries are very expensive when a battery goes out
02:25 there very expensive to replace. This facility is going to drive
02:29 down the price of batteries by an estimate of maybe 30%
02:32 up. Now I I I meant and you lived in about
02:36 almost seven years of -- working at the paper there and
02:39 what do you think that community. Thinks about this deal how
02:43 are people re acting locally. You know locally there's a lot
02:47 of excitement. There's a Twitter hash tags -- we matter. Which
02:51 is popped up with a lot of tweets around this deal.
02:55 You know when -- community decides it's gonna rally together and
02:59 and go after tech businesses and makes it happen it's pretty
03:02 exciting. So I hear that there's a pretty interesting back story
03:05 behind where the link and came from the Tesla is using
03:09 -- -- -- up that's very true so there's a guy
03:12 you know classic Nevada story guy roles -- -- Nevada. And
03:16 sees opportunity and it's a guy named Lance -- one of
03:19 the first investments he made was -- famous mustang ranch so
03:24 we became a brothel governor. But he also was a Smart
03:27 guy as far as kind of seeing where the real estate
03:29 was headed and he bought up land and he bought the
03:32 land that. Tesla is probably going to move into with the
03:35 development center east of Reno. Again he did this in the
03:38 middle of the recession and people -- scratching their heads saying
03:41 you know what it's crazy Atlanta team now. Fine on this
03:43 land you know who's gonna move there and now he's looking
03:47 like a really Smart guy. His -- was gonna move this
03:50 test is gonna move there again thanks so much for --
03:52 really appreciate it look for more on this story at USA
03:55 -- dot com.