For legislation scarcely to hit the halls of the Nevada Legislature, the Bill Draft Request for Innovation Zones (BDR 1109) is getting a lot of attention in northern Nevada. And not all of it is good.
In his 2021 State of the State Address, Governor Steve Sisolak unveiled the proposed Innovation Zones legislation. “New compa-nies creating groundbreaking technologies can come to Nevada to develop their industries. This will be done without tax abatements or public financing,” stated Sisolak. “Following passage of my Innovation Zone legislation, Blockchains, LLC has committed to make an unprecedented investment in our state to create a smart city in northern Nevada -- making Nevada the epicenter of this emerging industry and creating the high paying jobs and revenue that goes with it.”
During an Innovation Zones Roundtable discussion on February 25, Sisolak and Michael Brown, director of the Governor’s Office of Economic Development, and Jeremy Aguero, principal analyst at Applied Analysis, shed some light on what the proposed legislation will include. On the surface, Innovations Zones sound like an episode of The Jetsons, in which the characters cross the galaxy to live in a “smart city” in Storey County, home of the Tahoe Reno Industrial Center – a city entirely driven by innovative, groundbreaking technologies. Once in residence, George Jetson develops technology that harnesses electrical energy from brainpower, making fossil fuels a thing of the past and saving all of Earth’s renewable resources. All made possible by Innovation Zones and brought to you by Blockchains, LLC.
If it sounds a little futuristic, it is. At least the electric brain power technology.
Aside from the limitless technological possibilities that Innovation Zones could inspire, one piece of the proposed legislation has many residents concerned – tech companies creating new political subdivisions within the state of Nevada.
Innovation Zones would allow corporations to create their own independent governments. According to Sisolak, during the initial building, zoning, and developing infrastructure, the governor would appoint a three-member supervisory board. That board would have the same authority as county commissioners and would operate similarly. “An Innovation Zone is a self-governing community, organized much like a traditional city or county, but wholly focused on the development of innovative and advanced technologies,” stated the governor, “And can evolve at the speed of these technologies while integrating them into the function and needs of the community.” Innovation Zones would have their own school district, utilities, services, law enforcement, etc. According to Aguero, these communities would become independent of the host jurisdiction or host county.” While this may sound a lot like the company towns of old, Sisolak says no. “It is not a ‘company town’ – that is not what it is.”
To be an Innovation Zone, the applicant must meet other legislative requirements. The applicant (tech company) must own or purchase at least 50,000 acres of privately owned, undeveloped land. They must also make an immediate $250 million contribution to the development project and commit to investing an additional $1 billion over the next ten years. An industry-specific tax would then be levied on the Zone/city along with all existing taxes that apply to Nevada residents and businesses.
But that is only part of the story. Blockchains LLC, now based in Sparks, has purchased 67,000 acres in Storey County, with 20,000 acres slated for a smart city if the legislation is approved. What looks like a futuristic concept is already underway. Last week Storey County Commissioners and their Water District voted in opposition to “separatist governing control.” According to the county manager, Austin Osborne, “This would carve out a part of Storey County and create another county.”
The potential legislation also has the Nevada Chiefs’ and Sheriffs’ Association concerned. “We’ve been watching the ridiculousness that is the planned communities within the counties,” said Churchill County Sheriff Richard Hickox at a recent county meeting, discussing the legislative activities of the association.
County Manager Jim Barbee reported that Nevada Association of Counties has been in discussions with counties and has concerns on how this legislation would play out. NACO and the county managers will continue to watch the issue. Chairman Pete Olsen said the Churchill County Commissioners will hold a discussion in an upcoming meeting and to consider the possibility of a resolution.
Barbee said, “It was pointed out that several of the things they want to do with the Innovations Zones, Osborne said they could do now through the county as it exists by just making the request.”
The conversation, and possible controversy, have only just begun. Jeffery Berns, through his company, Blockchains, LLC, has many revolutionary ideas. There is no doubt Nevada could benefit from what big tech companies could bring to the state in the form of jobs and revenue. However, it may take a lot more than promises before northern Nevadans get behind the idea of tech companies establishing their own governments. There is a lot of ground to be covered and costs to be weighed against any innovative benefits.
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