Government Affairs Update – February 2019

“Back to school. Back to school, to prove to Dad that I’m not a fool. I got my lunch packed up, my boots tied tight, I hope I don’t get in a fight. Ohhhh, back to school. Back to school. Back to school. Well, here goes nothing.”

– Billy Madison

As we write this month’s newsletter, Carson City is being blanketed in snow while legislators, lobbyists, and press all converge in Northern Nevada.  Indeed, when it’s quiet, you can almost hear the local children practicing “Home Means Nevada” one last time before it’s showtime on the floor of the State Senate and Assembly chambers.  Yet, despite the pomp and circumstance, reality has set in that although we are hurtling toward the constitutionally-mandated beginning of the biennial legislative session with a brand new Governor, Lieutenant Governor, Attorney General, Controller and Treasurer, as well as many, many freshman legislators, there are strikingly few bills to review, which makes predicting the direction this legislature intends to move our small state incredibly difficult.

Nonetheless, the 80th Legislative Session will gavel-in on February 4, 2019 whether there’s a plan or not, so kicking off the NAIOP monthly updates with a bit of positivity seemed most appropriate. And what better way to do that than to talk about workforce development, apprenticeships, proposed grant funding and a possible appropriation for federal lands?

Lack of skilled labor is a national issue with profound adverse economic repercussions in smaller states. Workforce development has always been a priority for NAIOP and something the organization consistently supported in recent years at the legislature. Two pre-filed bills are intended to bolster the state’s workforce development programs. Assembly Bill 32 offers an expansion of the Governor’s Office of Economic Development’s current workforce recruitment and assessment programs to include programs for non-profit organizations, as well as existing employees of a participating employer. Should this bill pass, the expanded training and recruitment opportunities for participating employers will allow businesses to grow organically from the inside and provide better workplace opportunities for their employees. In addition, Assembly Bill 68 aligns Nevada’s apprenticeship programs with federal law and moves all of the state’s apprenticeship programs under the Office of Workforce Innovation. The bill is intended to move Nevada into a position where it may benefit from federal programs which were previously unreachable due to structural issues created by antiquated or ill-written state statutes. In increasing opportunities for apprenticeships, AB 68 takes aim at increasing workforce development in the state.

Senate Bill 96 seeks to enhance Nevada’s ability to maintain and develop its public lands by creating a state-level grant program aimed at awarding municipalities funds they need to evidence matching funds, which will qualify the municipalities for federal grants. As we continue to work toward a funding source for the infrastructure bank created by AB 399 in the 2017 Legislative Session, these grants could prove to be an important step toward enhancement of federal lands throughout the state.

As we move through the session, bills such as the three mentioned here can provide a lot of positivity in what can be an otherwise tough 120 days. In a world of partisanship, political fist fights, and substantial unknowns, the ability to support legislation which benefits all stakeholders and the state itself increases the pie, raises all boats, is a win-win, and a dozen other clichés for good things.  But importantly, they ultimately benefit the commercial real estate industry; a good omen indeed for NAIOP and its members.


Mark Twain, though commonly thought of as a Nevadan, only lived in Nevada from 1861-1864.  However, the brief time Twain spent in Nevada is often referred to as among the most impactful on his life and works.  To that end, and in the spirit of the beginning of the 80th Session of the Nevada Legislature, the following quote seems appropriate:

“The secret of getting ahead is getting started.”

– Mark Twain


Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig |  | T: 702.692.8037

Government Affairs Report – January 2019

Who can it be knocking at my door?
Make no sound, tip-toe across the floor.
If he hears, he’ll knock all day,
I’ll be trapped, and here I’ll have to stay.

Who Can It Be Now?
Men At Work (1981)

Moving through Election Day on November 6 to Thanksgiving, followed by NAIOP’s annual meeting and concluding with the final meeting of the County Commission prior to a 3-seat recomposition which will include Chairman Steve Sisolak vacating his seat to assume his role as Governor of the State of Nevada, and the December holiday season, one is left to wonder how to stay ahead of the curve as we run headlong into the 2019 Nevada Legislative Session.  Set to begin on February 4, a mere month from now, Legislators have put in place 968 Bill Draft Requests, and Legislative Counsel Bureau has dropped 177 bills – not quite 20% of outstanding BDR’s – for the upcoming Session.  Indeed, comprehensive speed-reading seems to rate high on the agenda of “things to do” as we prepare for our biennial trek to Carson City.

Yet, just when screaming “UNCLE” is right on the tip of your tongue, the phone rings and the Caller-ID doesn’t recognize the number.  Intoxicated by festive holiday spirits and more than a bit of egg nog, you pick up the phone to hear the cheery voice of…a candidate for city office.  GAH!  I thought this ended back in November!  But then you remember and just as Seinfeld whispered “Newman” between his gritted teeth, you exhale “Nevada” and hear the familiar campaign spiel, as your mind drifts to strangling whoever had the wonderful idea of running city elections separately from the general statewide and national elections.  How did running an election every single year seem like a good idea?  “There ought to be a law.”

There might be one.

Amid the nearly 1,000 BDR’s and 177 bills, AB 50 has emerged as a potential favorite to stem the tide of perpetual fundraising currently enabled by Nevada law.  As written, AB 50 moves all city elections – both primary and general – to the statewide election cycle beginning in 2022.  The bill also makes accommodations for elected officials who were elected in 2017 as well as 2019 such that the present “staggered” election for offices with 4-year terms remains in place.  While it notes a fiscal impact to local municipalities, no fiscal note has been attached, yet.

Although we are expecting more BDR’s (more than 1,200 were filed in 2017), an up-to-date list of legislation we are currently tracking heading into the 2019 Legislative Session is being assembled for the Government Affairs Committee.  Please contact the Committee with any questions you may have.

Odds & Ends

From 2015 through 2016, Republicans held all Nevada state constitutional offices and majorities in both houses of the Legislature.  On November 6, 2018, incumbent Secretary of State Barbara Cegavske (R) defeated challenger Assemblyman Nelson Araujo (D) by just more than 6,200 votes, or .6%, to stave off a Democrat sweep of all Nevada state constitutional offices (Democrats already held majorities in both the Nevada Senate and Assembly) thus denying Democrats’ ability to hold all Nevada state constitutional offices and majorities in both houses of the Legislature for the first time since 1938 – the second of President Franklin D. Roosevelt’s four-term Presidency.

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig |  | T: 702.692.8037

Government Affairs – December 2018 Report

“It becomes a gift for one, as opposed to a gift for all.” – the esteemed Jon Leleu, Ladies and Gentlemen

To TIF, or not to TIF, that is the question. For many, many years, almost every state in the US, save Arizona, has had TIF enabling laws on its books. While they all say different things, the goal is the same – to invest in infrastructure and other improvements in blighted areas, to increase and promote neighborhood stability, development, and redevelopment.

So, what is TIF and what does it do? Tax increment financing, or TIF, originated in California in 1952. At the time, it didn’t really take off and over the course of almost 20 years, only 6 other states enacted TIF legislation – Minnesota, Nevada, Ohio, Oregon Washington, and Wyoming. Due to TIF initially being a way of providing matching dollars for federal “urban renewal programs,” and those funds drying up in the 1970’s, cities began looking at TIF funding without federal dollars as an alternative. By the time we were through the 1990’s, the federal role was all but eliminated. In the modern era, TIF dollars typically are pulled from the real property tax base. In certain states, funds are generated from sales tax, personal property, PILOT, or some other revenue stream. Sales tax is a tough sell however, as it is difficult to predict, inferring greater risk.

As with any type of redevelopment incentive, the jury is still out in the court of public opinion. Generally, the decision all comes down to 2 policy arguments. Those who are in favor of economic development incentives will tell you that but for the incentive, development would not occur in certain areas. On the opposite side, you have those that contend it’s a public subsidy for development, where development might have already occurred due to favorable pricing created by a depressed market.  Who’s right?  Both.  We can all point to projects which would not exist without the TIF, as well as projects which would likely have come out of the ground regardless of the public spiff.

Let’s drill down the support and positive side of TIF. To do this, you need look no further than the City of Las Vegas’ Economic and Urban Development Department. Through the years, they have used TIF incentives in their Redevelopment Areas, attracting multiple new businesses to otherwise under-developed and blighted areas. Their process is one of the most transparent and smooth, with a high level of oversight and due diligence mixed in. Projects like the World Market Center Las Vegas have benefited from TIF incentives and have been able to expand operations and announce new development, in part due to TIF incentives over the years. This program can be pointed to as a shining example of the way TIF incentives can benefit a community and city, when done properly.

On the flip side, rampant misuse of TIF incentives in other municipalities have shed light on the issue of what happens when there is little to no transparency and understanding of where the funds are coming from and going to, by the public. In Chicago for instance, taxpayers are incredibly wary of TIF incentives as they are used so frequently, without restriction to blighted areas, and very little public discussion on what they will be used for, until it’s printed in the paper. Many feel like it’s a valuable tool, but only if used with a higher sense of scrutiny, because public dollars are being re-rerouted away from general purpose funds. Projects like revamping skyscrapers, large developer incentives, the renovation of Navy Pier, to the tune of $55 million, and more recently the renovation of a theater in the Uptown neighborhood, have made the public question whether or not TIF incentives are being abused, if their taxes will increase, and whether the subsidies are necessary.

When considering whether a project should receive TIF incentives, municipalities should ensure a very transparent, public process. The public must be able to understand the need for the project and the reason behind the incentive. A mistrust amongst the tax base could lead to trouble for municipalities that rely heavily on this incentive for growth, especially if there’s a chance that property taxes, or other taxes will be raised as a result.

Back in Las Vegas however, as the World Market Center Las Vegas embarks on development and soon-to-be construction of the only downtown convention center, it is clear that TIF incentives bring a lot to the table, and to the benefit of the entire valley.

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig |  | T: 702.692.8037

2018 Election Analysis & 2019 Legislative Update

Voters approach Mid-Term Elections with the same enthusiasm they show when shopping for a new refrigerator; some just grumble and go, and others put it off until the next time an issue arises.  Yet, a variety of factors, most notably the Donald Trump presidency…Click here to Read More


Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig |  | T: 702.692.8037

Government Affairs – October 2018 Report

“The best argument against democracy is a five-minute conversation with the average voter.” – Winston Churchill

Election season is upon us, with only 19 days until early voting begins, 36 days until the general election and 126 until the first day of the 2019 Legislative Session.  528 BDRs are already submitted, and things are moving fast. As is customary in any election these days, there are a never-ending supply of commercials about the ballot questions, demanding that you vote yes on this, and no on that. We’ve all heard them thousands of times, this cycle alone. However, when it comes to ballot questions, there is typically one thing you never hear in any of the commercials: 4 of the 6 questions on November’s ballot amend the Nevada Constitution, the remaining 2 amend or enact statute. While this might not seem like a big deal, voters must be very analytical, educated, diligent, and levelheaded about ballot questions. Does it make sense to amend our Constitution or our statutes in this way, rather than leave it to the individuals we have voted into office, to vet and pass them during a legislative session? Understanding the process to bring an initiative or resolution forward and the effect the ballot question will have on Nevadans once it becomes law, is a critical component before casting your vote.

Nevada offers a couple different ways to enact or amend a statute. Traditionally, the 63 members of both houses of the Nevada Legislature, elected by the voters of Nevada, bring forth a bill, vet it through committee hearings in both houses, and vote on its approval or disapproval. Upon bicameral passage, a bill will go to the Governor and is generally signed into law. This is called “representative democracy.”  Growing in popularity in Nevada is “direct democracy,” where a vote of the people enacts or amends statute. As opposed to legislative action, direct democracy in Nevada begins with a petition describing the amendment or proposed law, which is circulated for signatures among voters statewide. Once 10 percent or greater qualifying signatures from 75 percent of the counties in the state are gathered, the petition is filed with the Secretary of State. It then goes to the next regular legislative session, where it has 40 days to be acted upon. If the Legislature approves the initiative, it will go to the Governor for approval and will become law subject to a referendum petition. Should the Legislature not take any action in 40 days, the Secretary of State shall put the initiative to a vote of the people in the next general election. If approved by the voters, it will become law after a canvass of votes by the Supreme Court, and may not be amended, repealed, or otherwise touched for 3 years.

Similarly, there are a couple of ways to amend the Nevada Constitution, all of which require a vote of the people. Just like a petition may be circulated to amend or enact statute, the same may be done for a constitutional amendment. The process differs somewhat, as the petition does not go to the legislature, but is published by the Secretary of State 3 times in newspapers in every county in the state, with the full text and explanatory matter. It then goes on the ballot at the succeeding general election, where it will be voted on. Should the measure pass, the Secretary of State publishes and resubmits the measure to be voted on again at the next general election. Once the matter passes two general elections, it becomes part of the Constitution upon a canvass vote of the Supreme Court.

A joint resolution is the only way a constitutional amendment may be brought forward by legislators. During the legislative session, the resolution will be heard just as a normal bill is heard before committees in both houses. It must pass out of its committees and out of both houses in two consecutive legislative sessions. Gubernatorial approval is not required. After the resolution receives bicameral passage in two consecutive legislative sessions, it will then go on the ballot at the next general election to be voted on, and upon approval shall become part of the Constitution.

Of critical importance when it comes to direct democracy and constitutional amendments, is understanding in Nevada, amendments take 6 years to implement, and another 6 years to repeal or amend, should there be any issues or unintended consequences. By contrast, a bill brought forward and passed during a legislative session can be amended or repealed during any regular legislative session. Many times, direct democracy and ballot questions come about as a means to getting something passed outside the legislature’s purview. If a representative of an issue does not feel they can get a measure passed during a regular legislative session for any number of reasons, direct democracy now seems to be the answer.

Even more troubling perhaps than the extended timeline for change, when it comes to constitutional amendments, is that most voters only know of the issues what they’re told in ad campaigns, what they were told when they signed the petition, or what they read in their ballots right before going to vote. There is no public debate in direct democracy, and most voters do not realize the issue before them has not been vetted by their elected representatives. Most voters have no idea what the timeframe for amendment or repeal is, should there be problem with the measure; but more importantly, the average voter does not ask themselves if this is something that belongs in the Nevada Constitution, as opposed to its statutes. There is little recognition of the difference between those two things. A Constitution, whether state or federal, should provide the skeleton and backbone of our statutes, it should not be treated like and amended as they are, such that every little thing ends up being amended into the constitution. Lawmakers and constituents alike should have the flexibility to change laws that are outdated, not working, need clarification, or otherwise need to be amended. That process is provided for every two years, for 120 days, during the regular meetings of the Nevada State Legislature, who are elected for precisely this purpose – voting on laws – by the people of the State of Nevada.

Click here for information on all ballot questions you’ll see on the November ballot.


Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig |  | T: 702.692.8037

Government Affairs – September 2018 Report

Click here for the article – NAIOP Source: The Path to Better Infrastructure

Jonathan P. Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig |  | T: 702.692.8037

Government Affairs Report – August 2018

“Change. Isn’t it appropriate that the Chinese word for it is comprised of two symbols—one for danger and another for opportunity? How you perceive and adapt to change makes all the difference.” – Spinditty Blog

Just like everything else in this world, the commercial real estate industry is constantly changing. Trends come and go, prices go up and down, there are boom years and bust years. As we near the fourth quarter of 2018, one of the most interesting trends has been that of the retail market. With the continued proliferation of online retailers, many consumers would simply rather order their goods from the comfort of their couch, in their pajamas. As we watch brick and mortar establishments shut their doors, downsize, or file for bankruptcy, how does the industry adapt? Read more

Government Affairs Report – May 2018

“If you build it, they will come.”

Shoeless Joe Jackson, Field of Dreams

What can Las Vegas’ commercial real estate market expect from a brand new stadium? Does this project promise guaranteed growth, more opportunities for mixed-use developments, sustainable jobs in the form of leases and tenancies? The answer is: probably, however it’s difficult to say. Frankly, there are a lot of articles out there, but there just aren’t a lot of solid numbers. While Las Vegas will certainly see an increase in tourism, which contributes greatly to our economy, what do sports venues truly mean for the commercial real estate market?

In October of last year, Ten-X Research published an article looking at local apartment and retail markets. They studied the correlation between new stadium announcements and openings and net absorption rates, completion rate and NOI growth. Taking a sample from 9 of the newest NFL and MLB stadiums, they found, as it pertains to completion and absorption for the retail market, when they compared the submarket to the overall market, there was no evidence to suggest developers are more inclined to build new retail, and likewise tenants are no more inclined to lease space near a new stadium. Conversely, NOI growth at the submarket level exceeded the broader market by over 65% in both post-announcement and post-opening cases. This strongly suggests vacancy rate improvement and rent growth in areas surrounding new stadiums.

Markets such as Sacramento, Kansas City, and Detroit have seen notable increases in population growth, mixed-use development, and redevelopment, in their downtown areas, since the opening new arenas and stadiums in their downtown cores. In a January New York Times article written about the impact on sports stadiums downtown, it suggests that the recipe for successful growth and development is a stadium surrounded by some sort of mixed-use project, instead of a stand-alone stadium surrounded by a parking lot, in the suburbs.

What does any of this mean for Las Vegas? At this point, no one knows for sure. Las Vegas-based sports venues are unique for multiple reasons, first and foremost, location, location, location. T-Mobile Arena is on the Las Vegas Strip – commercial development on these parcels is an anomaly unto itself, and there is no comparison or quantifiable metric to measure commercial growth on the Strip in traditional parlance. Additionally, the proposed football stadium sits across the I-15 freeway from the Strip, on a small parcel, surrounded by a parking lot and existing industrial properties, with no additional room for mixed-use development absent substantial planning. Yet, development of the football stadium seems most comparable to the development of Petco field in San Diego and redevelopment of the surrounding warehouses into the “Gas Lamp District.” Maybe that’s the recipe for success? Finally, the Las Vegas Ballpark in Summerlin, located in Downtown Summerlin and bordered by existing commercial and retail and a large swath of open land, certainly sets up the pins for a tremendous run on mixed-use development. But what came first – the chicken or the egg? Would any of this land develop without a sports facility project? Did the sports facility spur future development? There is no doubt we have seen and will continue to see increased foot traffic in all of these developments, perhaps a population increase and demographic shifts, and it will no doubt boost tourism, but aside from building the actual facilities themselves, what long-term benefit will commercial real estate in the valley see? While some politicians claim early credit for success due to the sports facilities, and others express concern about the allocation of precious capital and resources, the rest of us will have to wait several years to know whether and how sports facility developments affect the Las Vegas commercial real estate market.

Odds & Ends

Oftentimes, we are asked to describe the most effective piece of lobbying we’ve seen, and although we’ve seen a lot, this gem easily predates us, and everyone who is reading this bulletin. To that end, we give you the following:

While many companies looking to relocate to Nevada often point to favorable corporate laws and tax rates, there exists another, lesser known advantage for Nevada hospitality businesses, restaurants, bars, and now, sports facilities; Nevada has no dram shop laws.

No one knows for sure how this happened, or even when. But, in a state built on excess, allowing those who provide the excess to serve alcohol with impunity seems surprisingly fitting. Actually affording a few drinks these days – particularly at the sports facilities – remains an open question.


Jonathan P. Leleu, Director
Kerrie Kramer, Government Affairs Analyst

Fennemore Craig |  | T: 702.692.8037


Government Affairs Report – April 2018

There’s a storm front coming (mood indigo)
White water running and the pressure is low
Storm front coming (mood indigo)
Small craft warning on the radio

– Billy Joel

Political trends. Fascinating to watch, these patterns of public opinion tend to follow events of historical significance and create mayhem across the political landscape. Although the traditional cliché describing political trends is that of a pendulum, a political trend reacts more like water in a bucket. If outside influences move the bucket side to side, the water splashes back and forth; if the bucket is moved in a circle, the water spins like a whirlpool; if the bucket is shaken, you get wet. Whether the patterns are cyclical or simply repetitive, they – when combined with metrics such as registration advantages and contribution / campaign spending analyses – create predictability in elections and provide endless entertainment or at a minimum, something to talk about between sips of wine at happy hour.

Following passage of the registration deadline for the 2018 election cycle in Nevada, the field of candidates solidified and gave us the first quantifiable indicators of possible results in November. Most significantly, the Nevada State Assembly Democrats, who presently enjoy a 26-16 majority, appear poised to expand their influence to a possible veto-proof supermajority (28-14) due to lop-sided registration advantages and a significant number of uncontested races. Of the 42 Assembly seats, 29 are either uncontested or are located in districts with a registration advantage of greater than 10 points; 20 Democrat and 9 Republican. The Democrats also enjoy a significant registration advantage in an additional 5 districts, while Republicans have a thin advantage in 5 districts. Simply put, all the Democrats need to do is hold all 25 seats with a significant registration advantage, and pick up 3 seats in the districts which slightly lean Republican, and Democrats can seek out a veto-proof majority in the Assembly.

Will trends push Assembly Democrats over the edge? Will Assembly Republicans harness their recent mid-term power and hold the Democrats? Only time will tell, but make no mistake, with stakes this large, each party will be working hard to ensure the other “shakes the bucket” and ends up all wet in November. That said, on March 27, 2018, a major influence on political trends reared its ugly head once again. In the special election called to fill the seat vacated by disgraced Councilman Ricki Barlow, Cedric Crear won the seat last by more than 10 points. This was not a surprise; Crear has been campaigning for the Ward 5 seat for more than a year, and he was nearly $100,000 ahead of the next highest candidate in fundraising. What is shocking is of the more than 38,000 registered voters in Ward 5, there were about 2,300 who voted. This equates to a 6% turnout. Cedric won with 27% of the vote (627 TOTAL votes). Former State Assemblyman Harvey Munford was a distant 3rd with Joe Mitchell (existing Ward 5 liaison) only received 9% of the vote. This, apparently, is what Democracy looks like these days.

Although it did not seem to have much effect here, make no mistake voter apathy can turn an election. Tying this to the numbers noted above, if increased voter apathy is a trend which holds through November, Republicans have a good chance of preventing a Democrat super-majority in the State Assembly.

We hope everyone had a nice weekend!

Jon & Kerrie

Jonathan P. Leleu, Shareholder
Kerrie Kramer, Assistant Director

Greenberg Traurig, LLP
3773 Howard Hughes Parkway | #400 North | Las Vegas, Nevada 89169
Tel 702.599.8070 | Fax 702.925.2316 | |

Government Affairs Report – March 2018

We cannot solve problems by using the same kind of thinking we used when we created them.
               – Albert Einstein

Among the highlights of NAIOP’s 2017 Nevada Legislative Session was working alongside the RTC and local municipalities to push AB 399 (Asm. Irene Bustamante Adams) and SB 517 (Sen. Scott Hammond), commonly known as the “infrastructure bank bills,” through the Legislature. As we’ve written in the past, AB 399 was amended to include the transportation infrastructure provisions of SB 517, received bicameral passage, gubernatorial approval, and Nevada now has the skeletal framework in place to receive funds in the banks, should they become available. Will we receive funding for I-11? Storm drains? How about public transportation? Like a teenager who has just pressed <<SEND>> on a text message which says “I love you,” Nevada now waits impatiently alongside 31 states for the return message, which hopefully has the good news we’re waiting for. Knowingly, time…stands…still…

The phone vibrates. You give it the side-eye. If this is you again, mom, I’ll text back tonight! Yes, I remembered to wash my socks, now stop texting. You look down:


Bingo! This is what we’ve been waiting for, and what we spent 4 months pushing in Carson City! We’ve all heard the reports. The President said in the State of the Union his infrastructure ask is going to be “YUGE.” Some speculate $1.5 trillion, which would catapult Nevada and our country into the stratosphere! Did we get the “I love you” return???

The President’s “Outline” does indeed contemplate $1.5 trillion in infrastructure upgrades, which is the largest suggested infrastructure investment in several generations. Accordingly, the Outline certainly looks YUGE on the surface. However, the Outline is a framework of an incentives program which is broken out as follows: $1.3 trillion in funding from state and local governments, which, following approval of an application by the US Department of Transportation, US Army Corps of Engineers, or the Environmental Protection Agency, may trigger an award of a federal incentive from a pool of $100 billion, less administrative expenses. (The remaining $100 billion is divided between a Rural Infrastructure Program ($50 billion, styled as grants), transformative infrastructure projects ($20 billion styled as grants), $20 billion to increase capacity of existing credit programs to fund infrastructure investments, and other programs.)

Incentive awards would be based on:
• The dollar value of the project (weighted at 10%);
• Evidence supporting how new, non-federal revenue creating long-term funding for infrastructure investments will be secured (50%);
• Evidence supporting how new, non-federal revenue for operations, maintenance, and rehabilitation will be secured (20%);
• Updates on procurement policies to improve efficiency in project delivery and operations (10%);
• Plans to incorporate new and evolving technologies (5%); and
• Evidence supporting how the project will sport economic and social returns on investment (5%).

Incentives would be limited as follows:

• The incentive grant could not exceed 20% of the project;
• No state could receive more than 10% of the total amount available ($10 billion);
• Grant recipients would agree to achieving certain milestones before the grant would be released; and
• Any milestones not reached would result in reallocation of the grant.

The upshot? The $1.5 trillion infrastructure Outline actually contains substantially less than $10 billion in incentivized infrastructure grants, per state. The remaining value of the plan comes from initial investment from the states, local municipalities, and private sources. Indeed, the Outline is an overt message to the states to fund infrastructure locally.

As for infrastructure banks themselves, the Outline simply states the following – and only the following:

State infrastructure banks (SIBs) currently are underutilized.
This underutilization can inhibit State and local governments from best directing Federal funds to infrastructure projects.
Providing incentives to use SIBs, such as reducing federalization requirement on funds lent to SIBs that are deployed locally, could encourage the use of SIBs.
Expanding the legal capabilities of SIBs, in addition to direct appropriations, would allow SIBs to take responsibility for infrastructure funding in an effective manner that may not be possible for the Federal Government, particularly for rural projects or projects of smaller total cost.

In summary; states should use infrastructure banks, and in a more effective manner, whenever federal funds are appropriated. The Outline does not dedicate funds to seed the banks.

After all this, you are certainly asking, “where does this leave Nevada?” The answer is, quite simply, “on the outside, looking in.” The Outline suggests a funding paradigm which either a) does not help some states, or b) hurts others. It would appear Nevada falls into the latter category. Through no fault of the federal government or this (or any other) Administration, Nevada is not in the same position as larger states, which may more freely reallocate or raise revenue to reach the available incentives (if they chose to do so – in the scheme of things, the application process and resulting oversight may outweigh the meager incentive award). By way of contrast, Nevada’s entire economy is dependent on a fragile general fund. Nevada real property taxes are capped, it has no income taxes, and state lotteries, taxes on mining, and toll roads are all unconstitutional (amendments take over 5 years, and a vote of the people to pass). These are just a few of the hurdles which must be overcome to raise revenue substantial enough to fund large-scale infrastructure projects, and all of them are self-inflicted. Given the difficulty Nevada has in raising revenue, qualifying for an infrastructure incentive seems like a pipe dream, and places Nevada at a competitive disadvantage with other states, as the Outline would be applied. Should Congress implement the Outline as-is, Nevada would be on its own.

Here I go, again on my own
Goin’ down the only the road I’ve ever known
Like a drifter, I was born to walk alone
– Whitesnake

Kerrie limited Jon to one song in this edition.

Odds & Ends
In 1855, Secretary of War Jefferson Davis became convinced camels could supplement horses in the transport of military equipment in the harsh deserts of the western United States. Unfortunately, the camels’ hooves split on the rocks, and they kicked, spit, bit, had terrible tempers, threw off their packs, and disturbed nearby livestock by screaming – generally, what you observe when visiting Jon in Carson City. Ultimately, in 1875, the Nevada Legislature passed a bill banning the use of camels on state roadways, which stayed in place until around 1900, when camels were generally outmoded to make room for horses. Preserving and enhancing our infrastructure to allow for advances in transportation and technology has always been of fundamental importance to Nevada.

Have a great day!

Jon & Kerrie

Jonathan P. Leleu, Shareholder
Kerrie Kramer, Assistant Director

Greenberg Traurig, LLP
3773 Howard Hughes Parkway | #400 North | Las Vegas, Nevada 89169
Tel 702.599.8070 | Fax 702.925.2316 | |