Lance Gilman’s $43M Tesla payoff has believers, critics

LAS VEGAS — More often than not, Lance Gilman is in a cowboy hat.

“I feel naked without it,” he said. “I’ve always worn a hat, and I always will. Maybe they will bury me in one.”

But Gilman, 70, always takes off his hat for Gov. Brian Sandoval. And for reasons that go well beyond common etiquette, both men have good reason to tip their caps to each other.

The Nevada Department of Transportation board, of which Sandoval is a member, approved $43 million in October for a project that will help reimburse Gilman and his partners for building USA Parkway, the transportation corridor of Gilman’s Tahoe-Reno Industrial Center.

The money will pay for improvements to the existing six-mile stretch of USA Parkway and buy land from Gilman and his partners so NDOT can extend the road by 12.5 miles. When completed, the work will connect Interstate 80 to U.S. Highway 50 and help traffic flow more smoothly in the greater Reno-Sparks area.

In addition, the board approved $70 million for other construction costs related to the project.

Proponents of the project say it’s aimed at reaping Nevada’s economic development potential and was fueled by Tesla’s decision to build its $5 billion battery gigafactory at the TRIC. Gilman played an instrumental role in landing Tesla, which became a political triumph for Sandoval — proof that the state could attract a major employer under his watch.

But critics say the road project is a boon for Gilman and bust for the state.

A BARGAIN FOR TESLA

Gilman is a tenacious Storey County commissioner, a multimillionaire and real estate tycoon known for owning a brothel and developing TRIC, the world’s largest industrial park.

The state’s $1.3 billion deal with Tesla wouldn’t have happened if it weren’t for Gilman and his two partners: Don Roger Norman and William Roger Norman.

Free of charge, they dished Tesla nearly 1,000 acres to build its factory at TRIC. That set off a chain of events that led to the funding from the state, giving Gilman and his partners something they’ve wanted for more than 15 years: a completed, state-funded USA Parkway.

In the early 2000s, Gilman lobbied lawmakers in Washington D.C. and Carson City for it. He lobbied so hard in 2001 that former state Sen. Mark Amodei wrote a resolution urging the state to contribute money to the road.

But Gilman didn’t get it.

Instead, Gilman and his partners invested more than $60 million of their own money to build part of it themselves. More than 5,000 trucks and other vehicles access the six-mile, four-lane road every day. After NDOT finishes its work in 2017, USA Parkway will be a state-maintained road that carries Tesla batteries to the rest of the world.

Gilman got the state payoff because Tesla was a convincing anchor tenant. The company’s namesake and futuristic polish promised the arrival of more blue chip job creators and government revenue generators. Since mid-September, Gilman said he’s lined up at least 10 big-name companies vowing to make a home at the industrial park.

“People are sitting around saying, ‘Good Lord this is something,’” Gilman said. “I’ve been telling them that for 10 years.”

Gilman was willing to give a bargain for the road.

Along with giving Tesla free land, Gilman said he offered a “substandard price” for the land that will be used to extend USA Parkway.

The state granted Gilman and his partners around $4 a foot to extend and improve the existing roadway. Other property at his industrial center is going for up to $12.50, he said.

NDOT Director Rudy Malfabon said the project will collectively benefit Gilman and Nevada.

“We can’t argue the developers from the industrial center are going to have some money in their pockets,” he said. “But they did take the risk at building the center in the first place.”

At the NDOT board meeting in October, Sandoval said there was a “critical need” for the state to finish USA Parkway.

“It will reduce commute times,” Sandoval said. “And I don’t want to underestimate that in any way for the individuals that are going to be working out at TRIC. It means something to be home for dinner.”

STATE “SNOOKERED?”

Supporters of the USA Parkway expansion say the incomplete roadway creates a bottleneck of traffic that permeates throughout the state.

NDOT says the completed project will benefit the 30,000 daily drivers who use I-80 and U.S. 50 by reducing emissions and decongesting arterial roadways. The roadway will save time for employees who work in the industrial center and live in Stagecoach, Yerington, Dayton and Carson City, allowing them to cut I-80 out of their commute, according to NDOT.

Currently, I-80 is the only way to access the industrial center. Without the parkway there’s no direct way to travel north-south on U.S. 95 toward Las Vegas, Los Angeles or Phoenix. Truckers and employees have to drive dozens of miles east or west before entering the roadway. USA Parkway will spit drivers headed south from the center onto U.S 50, which is a few miles from U.S. 95.

“That’s why we’ve been trying since 2000 to get the damn road built,” Gilman said.

Critics of the project don’t doubt Nevada will benefit from the road. But considering the size of his taxpayer-sponsored payoff, they question if Gilman’s play was rooted in altruism.

The state got “snookered” on this deal, said Paul McKenzie, executive secretary-treasurer of the Building and Construction Trades Council of Northern Nevada/AFL-CIO.

He called the $43 million a misuse.

“Normally when you build a road like this, it is primarily for a community benefit,” McKenzie said. “This will make (Gilman’s) industrial park more valuable. It will make the property that he hasn’t sold more valuable. He is the primary benefactor of the road.”

TRANSFORMATION UNDERWAY

GIlman graduated from Sul Ross State University in Texas and has spent the last 40 years in real estate. His first large-scale project in Nevada was the Double Diamond Ranch, a 2,500-acre business park he started developing in 1988. He landed government arms contractor Lockheed Martin as the anchor tenant. A handful of missile and tech companies followed.

A decade later he started the industrial center, which now covers 166 square miles and comprises 65 percent of Storey County. Small portions of the property also sit in Lyon and Washoe Counties.

Before Tesla, there were 166 companies and 14 million square feet of buildings. With the price of the existing portions of USA Parkway included, Gilman and his partners invested $87 million of their own money to start the park.

Satellite images of the industrial center show the transformation of USA Parkway from pavement to unfinished road, to dirt. But It won’t be that way for much longer.

Gilman said money didn’t stop him from finishing the road.

“When you build anything of that magnitude, you build incrementally,” he said.