Surrounded by lawmakers and staff members, Nevada Gov. Brian Sandoval signs into law an unprecedented package of incentives to bring Tesla Motors' $5 billion battery factory to the state, at the Capitol, in Carson City, Nev., on Thursday, Sept. 11, 2014. (AP Photo/Cathleen Allison)
The deal bringing Tesla Motors to Northern Nevada has stirred up a storm of interest from manufacturers, businesses, developers and real estate speculators.
“We can see between five- and seven-million square feet starting construction between now and the end of this year,” said Lance Gilman of Tahoe Reno Industrial Center.
He said the calls started even before the Tesla deal was approved by Nevada lawmakers Sept. 11.
“During the last day of the session, I was averaging a call an hour from folks wanting to relocate here,” Gilman said.
And Gilman said it has gotten crazier since.
“It’s a frenzy, almost like a piranha attack,” he said, adding he has shown several businesses lots already.
Kris Holt, head of Nevada Business Connections, said it isn’t just businesses looking at the industrial center.
“They’re looking at apartment complexes, looking for land,” he said.
He added many of the calls are completely unrelated to Tesla. He said one example is a gluten free food company looking for four acres.
“It had nothing to do with Tesla but they’d heard so much about the area they wanted to come and see.”
Brad Bonkowski, who is in commercial real estate, said residential developers are “just coming out of the woodwork.”
“Everybody is out looking for land in the Highway 50 corridor,” he said. “We’ve already gotten offers on several properties and the people we had under contract already, every single one is saying they’re not going to extend or exercise their options. They’re just going to close.”
Commercial development, he said, “will be a little farther down the road.”
“We’re getting some calls but, again, it’s for land,” Bonkowski said. “There’s going to be a land rush.”
Carson City Realtor Bob Fredlund said the residential developers are the first ones showing up.
“It’s like going right back to before the crash (recession),” he said. “I know we’re getting a lot of inquiries about subdivisions and property out in Dayton and Silver Springs.”
Fredlund said a lot of the calls are from speculators.
“I think they’re really looking at what develops so they can be ahead on the housing,” he said.
He said how fast things move depends a lot on how quickly the state builds the USA Parkway connecting Silver Springs to the industrial center where Tesla is building.
Building the freeway shortcut would enable hundreds of Lyon County workers to easily get to jobs at the industrial center and “create an urgency for developing lots.”
“We do have a big influx of inquiries for land as large as 160 acres and 500 acres,” Fredlund said.
Bonkowski said a side effect of all the speculators coming in will be it will drive land prices up.
“I see a self-fulfilling market where the developers are going to come in now and try to buy everything up while prices are still low,” he said.
Gilman said Tesla is the “anchor” and that down the road, the entire area will see “an unprecedented amount of relocation opportunities.” He said the industrial center sold a couple of retail sites last week. He said they are also hearing from health clubs, insurance agencies, banks, casinos and other types of businesses.
Ray Bacon, head of the Nevada Manufacturing Association, said there is some time for area governments to get ready because even though Tesla is moving quickly — according to Gilman already preparing to pour concrete — the typical time between the first call and when a manufacturer actually builds is nine months or more.
“So it’s going to trickle out,” Bacon said.
He said some of the first to come will be suppliers that already have a business relationship with Tesla and Panasonic and will want to move in next door.