Planned NLV auto factory nixed
CARSON CITY — Faraday Future on Monday said it is walking away from its planned $1 billion electric car manufacturing factory at Apex Industrial Park in North Las Vegas and will seek an existing building to pursue its futuristic electric vehicles.
Starting production at an existing building is viewed as a way to persuade potential investors that the company is economically viable. The company is looking for a building of at least 1 million square feet in Nevada or California to start production quicker and cheaper.
The company had originally proposed a 3 million-squarefoot manufacturing facility that was reduced to 650,000 square feet.
The announcement brought a strong defense from Gov. Brian Sandoval and other state leaders who had assembled a package of tax incentives for Faraday to collect had the project been built. It also elicited a sharp “I told you so” from Treasurer Dan Schwartz.
Faraday was notifying its North Las Vegas employees of the decision on Monday. Over the
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past year, about 25 employees from Faraday have worked inside inside a 2,885-square-foot office at North Las Vegas City Hall under a $64,047 annual lease. Last month, the company moved to a month-to-month basis with the same rent “to facilitate local operations,” a Faraday spokesman said.
The company will keep its 930 acres at Apex for a potential future facility. It paid $29.4 million for the land.
The news that Apex won’t be the site of the factory that would have provided about 4,500 direct jobs will be a blow to Sandoval and state lawmakers, who in December 2015 approved a $335 million incentive package, including $215 million in tax breaks. Incentives would not have kicked in until there was a $1 billion investment in the project.
Investors roadblock
Faraday is trying to raise $1 billion to start production of a slick fourdoor electric sedan that can go from 0-60 mph in 2.39 seconds, but attracting investors has stumbled because of developments connected to the company’s primary backer, Chinese billionaire Jia Yueting.
A Chinese court last week froze $182 million of his assets related to another company, Leeco. Jia, chairman of Leeco, quit his position with that company on Wednesday to focus on Faraday Future. Faraday has also ended talks with the city of Vallejo, California, for a planned second factory on a 157-acre site on the city’s Mare Island.
Faraday broke ground in April
2016 on the Apex site with grading of land. Work by AECOM, the general contractor overseeing the project, stopped after Faraday missed multiple deadlines for depositing money into an escrow account to pay builders.
In a statement Monday, Sandoval said, “While I am disappointed in today’s announcement, I can say with certainty that Nevada’s citizens were held harmless financially.”
Assemblyman Ira Hansen, R-sparks, one of a handful of lawmakers who opposed the 2015 deal, said Monday that the original testimony for the project sounded too good to be true.
“It sounded fantastic,” he said. “That was the problem. It sounded too fantastic.”
Hansen credited Schwartz with raising concerns early.
Schwartz had repeatedly cited concerns about the Faraday project since lawmakers approved the incentive package.
“We all make mistakes, but this one was obvious. Long after it became apparent that ‘a mysterious Chinese billionaire’ and Faraday Future could never build a $1 billion electric auto plant, Nevada state officials continued to insist that Faraday Future would magically create 4,500 jobs in North Las Vegas,” Schwartz said in a statement Monday.
In a statement, the Governor’s Office of Economic Development on Monday said, “The state recognized both the opportunity a large manufacturing facility could provide as well as the inherent risk associated with a start-up company attempting this endeavor.”
Some public funding is going forward, specifically $70 million for a U.S. Highway 93-Interstate 15 improvement project. But another $120 million authorized for water, sewer and flood control work at Apex has not been spent. Total
Improved infrastructure
Sandoval said one goal of the special session for Faraday was to improve the infrastructure at Apex, which now has water and power. That allows the state to recruit more companies to Apex than it previously could, he said.
North Las Vegas Mayor John Lee has previously said that he hustled to make a phone call to Faraday in February 2015, setting up a twohour meeting with executives at the company’s Los Angeles-area headquarters. Faraday eventually selected North Las Vegas over sites in Michigan, Georgia, Alabama and elsewhere.
The buzz of nabbing an electric car company helped to lure manufacturers and distributors to other part of North Las Vegas, including Amazon, Fanatics and The Honest Co. Additionally, city officials recently said they are negotiating with companies larger than Faraday to move into Apex Industrial Park.
In addition to the $70 million the state of Nevada spent on infrastructure, Faraday spent $10 million on design and engineering for infrastructure and another $47 million to grade the Apex site, city of North Las Vegas spokeswoman Delen Goldberg said.
Contact Sean Whaley at swhaley@ reviewjournal.com or 775-461-3820. Follow @seanw801 on Twitter. Review-journal writers Ben Botkin, Art Marroquin and Nicole Raz contributed to this report.