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On February 26, 2021, Nevada Governor Steve Sisolak was joined by Michael Brown, the Executive Director of the Governor’s Office of Economic Development, and Jeremy Aguero, principal analyst at Applied Analysis to discuss the state’s Innovation Zone proposal.

As we previously reported, Governor Sisolak first unveiled plans for Innovation Zones during his 2021 State of the State address on January 19, 2021.

At the press conference, Sisolak described the unprecedented economic impact COVID-19 has had on Nevada’s tourism and gaming industries, and he described the Innovation Zones as a way to lure to the state companies that are at the forefront of “groundbreaking technologies”, such as blockchain, autonomous technology, robotics, artificial intelligence, the internet of things, wireless technology and renewable energy.

What are “Innovation Zones”?

Innovation Zones would allow companies who purchase a minimum of 50,000 acres of land to be granted the same powers as that granted county governments, including the ability to impose and collect taxes, create court systems, build schools and other infrastructure and make land and water management decisions.

Governor Sisolak pointed out that Innovation Zones don’t require authorities to offer companies tax abatements or other financial incentives.

Companies will be required to make an immediate investment of $250 million in infrastructure plus make $1 billion in investment over the course of ten years.

Tesla Gigafactory in Nevada. Source: Smnt/Wikimedia Commons

Nevada has already been successful in luring Tesla to build its Gigafactory outside Reno, Nevada. Tesla began production of its Tesla Model 3 electric motors and battery packs and Tesla energy storage products there beginning in 2016.

Since then, Electrek has reported that Tesla has built a second facility right next to the first that may, according to a source quoted in the article, be used to produce Tesla’s all-electric semi-truck, the Tesla Semi.

Sisolak was quick to point out that the Innovation Zones would not become company towns, but described them as a “self-governing community organized like a traditional city or county.” Aguero described the Innovation Zones as a “new political subdivision within the state of Nevada, subject to Nevada’s ethics and open meetings laws.”

Aguero said the tech companies would have the responsibility for building, zoning, and developing independent of their host counties, and that the companies would “take over all the services that any local or county government would do.”

These new governmental entities would be administered by a three-member Board of Supervisors, which Aguero described as acting “the same as county commissioners.” He said that initially the three members would be appointed by the governor, however, when the number of registered voters within an Innovation Zone reached 100, the Supervisors would be elected rather than being appointed.

A focus on Blockchains

While Brown and Aguero mentioned companies having “specialized knowledge in an identified technology,” Sisolak focused on blockchain technology, stating that, “blockchain technology is at the center of the world.” Blockchain can have applications in medical records, identification, storage, and inventory processing.

In 2018, the company Blockchains, LLC purchased 67,000 acres of undeveloped and uninhabited land located east of Reno in the Tahoe Reno Industrial Center (TRIC), within Storey County. There, Blockchains envisions creating the “Painted Rock Smart City” which would include 36,000 residents and would run completely on blockchain technology.

Blockchains hope to break ground by 2022, and they have proposed building 15,000 homes and 33 million square feet of commercial and industrial space. Sisolak stated that the revenue stream for blockchain companies comes from processing fees and that processing will take place within Nevada. 

At the press conference, the state’s projections for the Blockchains project included an initial $9 billion in revenue from development and 79,400 construction jobs, followed by $2.2 billion of economic output and $1.1 billion in wages per year from a projected 25,600 jobs.

Blockchains, LLC gave $50,000 to a political action committee, or PAC, called Home Means Nevada, which was involved in Governor Sisolak’s taking office in January 2019. Blockchains, LLC also donated $10,000 to Sisolak’s 2018 election campaign, and Blockchains owner Jeffrey Berns personally donated $50,000 to the Nevada state Democratic Party.

During the 2020 election, Berns made a $10,000 donation to Democratic state Treasurer Zach Conine, plus Conine’s PAC received $60,000 from Berns. During his election campaign in 2018, Sisolak raised $11.3 million, which was more than any candidate for governor in Nevada’s history.

Concerns raised

According to Nevada television station KTVN, Patrick Donnelly, Nevada state director with the nonprofit Center for Biological Diversity said, “The most important question to ask about a new city in Nevada is: where’s the water going to come from? And with Blockchains we know their plans – it’s a massive water grab from rural Nevada.” Donnelly went on to say, “Blockchains LLC’s plan is to build a 100-mile pipeline to the Black Rock Desert to drain remote aquifers … Blockchains is setting the stage for a good old fashioned Nevada water war…”

As we’ve reported, conflicts over water are becoming increasingly more common worldwide and especially in the American Southwest.

Toyota’s Woven City

Business Insider recently reported that Toyota Motor Corporation has begun building a “smart city” at the base of Japan’s Mount Fuji, 100 kilometers (62 miles) outside of Tokyo on the site of a former Toyota auto manufacturing plant.

Toyota's Woven City
Toyota’s Woven City. Source: Toyota

The so-called “Woven City” will sit on 175 acres of land, and will initially have 360 residents who will live in smart homes equipped with robotics systems and sensor-based AI. Residents will include inventors, senior citizens, and families with children who will test self-driving cars, robotics, and smart homes.

Woven City will be powered by hydrogen fuel cells, and the rooftops of buildings will be covered in photo-voltaic panels to generate electricity. Hydroponics will be employed to grow crops without soil.

Toyota’s self-driving electric vehicles, called e-Palettes, will provide transportation and mobile retail, and will make deliveries. When complete, Woven City will be home to around 2,000 Toyota employees

Woven City won’t be Japan’s first smart city. In 2014, electronics company Panasonic opened the Fujisawa Sustainable Smart Town in Japan’s Kanagawa Prefecture. The city won’t be completed until 2022, but over 2,000 people already live there.

History of company towns

The U.S. has a long history of company towns, which were most prevalent during the turn of the 20th century. One of the most well-known was Pullman, which was developed outside of Chicago to house the workers building Pullman rail cars.

In Pennsylvania, chocolate magnate Milton Hershey founded the town of Hershey to house workers making his famous chocolate bars. Hershey’s idea was to create, “a perfect American town in a bucolic natural setting, where healthy, right-living, and well-paid workers lived in safe, happy homes.”

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