How will Big Businesses Impact Life for Nevadans?

Kristina Kraus
Greater Nevada Credit Union
For years, the Reno-Sparks area hasn’t been known for much more than its gambling and tourism, but recently there has been growth in our state’s technology industry. Nearly all of us in northern Nevada know Tesla is moving in, but we can’t forget about Apple, which made its deal first in 2012 and now Switch, which was recently announced to be bringing the world’s largest data center to town.

Each of these businesses moving here are great victories, though the real question is how will they impact our lives as residents?

What we know About the New Businesses

Apple
Apple struck a deal in 2012 and at the time, was given the largest corporate tax exemption in the state’s history — $88 million in state and local tax breaks to be exact. The deal for Apple to build their new data center in Reno, however, didn’t require them to hire any local workers. The hope was that Apple would help attract other technology companies.

Tesla
Located in the Tahoe-Reno Industrial Center, just east of Sparks, Tesla’s new battery gigafactory is set to be finished and operating in 2017. The Nevada legislature made the $1.3 billion tax incentive deal official in 2014. Although a larger deal than Apple, this agreement requires Tesla to make a $3.5 billion investment in Nevada over 10 years to receive the incentives.

Switch
The world’s largest data center to be owned by Switch will be moving in next door to Tesla in the Tahoe-Reno Industrial Center. Their move will take 5 to 10 years to complete, but we should start seeing the first installment open in 2016. Switch currently operates two data centers and leases space and equipment to its clients. Switch has over 1,000 clients including eBay, Xerox, DreamWorks and Shutterfly.

How will the companies affect us?

Jobs
Each of these new power house companies will be able to help our state move away from its high unemployment rate.  Although their deals are different, even Apple, which isn’t required to hire locals, has claimed it would provide roughly 200 contracted workers and 35 full-time positions. Switch, on the other hand, has to bring 100 jobs to northern Nevada to qualify for the tax breaks. Tesla’s construction alone has already generated more jobs and work for local businesses, and when the factory is complete it’s expected to employ more than 6,000 workers.
 
Salaries
As of 2013, the average hourly wage for Nevadan’s was $20.62. However, that might change soon as both Apple and Tesla have already stated their averages are $25.00 per hour. This higher average may put pressure on local employers to increase their pay ranges sooner rather than later. 

Housing Market
With new businesses moving in, demand for homes has gone up considerably, and prices are moving up as well. Lucky for buyers, right now mortgage rates are some of the lowest anyone has seen in a long time. As development with the new businesses grows, the housing market is likely to continue to climb as well.

Attracting More Business
Companies big and small have turned their attention to northern Nevada with the recent growth of the large tech businesses moving in. One street in Reno has even been given the nickname of Startup Row. These small businesses have begun establishing there focus on smartphone apps, cloud computing, and others similar tech services.

These new businesses will continue to have a positive affect our economy in a number of ways. More than just jobs and housing, they will be impacting our schools and even roadways. The much desired expansion of USA Parkway to Highway 50 is already being fast tracked to completion.

With our state’s economy on the rise, now may be the time to invest in that new business or sell your old home. Talk to us at GNCU and see what next step best fits your financial future.
 
1/26/15