A decade ago, state lawmakers touted inland ports as a path to boosting economic diversification in Nevada. But the legislation they passed to support that ambition bore no fruit.
This year, lawmakers are taking another swing at it.
A proposed inland ports bill making its way through the Nevada State Legislature has already drawn ample support from businesses, but some lawmakers are concerned the bill gives too much power to private industry in the name of economic diversification.
Senate Bill 298 would revamp the state’s existing laws on inland ports. Inland ports are logistics and distribution hubs where cargo can be processed, stored and transferred. As the name implies, inland ports are non-coastal but they have direct access to highway, railway or air transport facilities.
State Sen. Ben Kieckhefer (R-Carson City) is sponsoring the bill. He told members on the Senate Government Affairs committee that the bill would ensure that statute “reflects the reality on the ground.”
And that reality is: No inland ports have been established since 2011 when lawmakers passed legislation allowing for their creation.
In 2012, a study mandated by the inland ports bill the prior year found that “an inland port in Nevada was not viable in the near- and intermediate-terms.” Among that study’s conclusions were that Nevada’s urban areas were, contrary to popular belief, not the ideal distance from California ports and that the state was better off focusing on other aspects of the supply chain.
But the prospect of inland ports is now getting renewed attention in the wake of a pandemic that has reminded lawmakers the state is still largely a one-trick pony economically. Inland ports are mentioned in the state’s 93-page Plan for Recovery & Resilience, which singles out supply chain and logistics as a potential growth spot.
The Northern Nevada Development Authority, which helped draft some of the language in SB298, is proposing the establishment of two inland ports along the state’s western front. One would be in the Fernley area in Northern Nevada. The other would be in Jean-Ivanpah Valley in Southern Nevada. The ports would connect through a 400-mile stretch of existing freight rail and trucking networks.
As part of their efforts, NNDA recently partnered with the Nevada Department of Transportation to conduct a Fernley Multimodal Freight Facility Feasibility Study. A representative from NNDA said the findings support the prospect of a Fernley inland port.
NNDA has identified the Alliance Global Logistics Hub in Texas and the KC SmartPort in Missouri as templates for Nevada to follow. Both of those inland ports are more than 20 years old and operated by private entities.
Borrowing from the laws governing those two inland ports, SB298 proposes that inland port zones be allowed to be non-contiguous. Existing law requires inland ports to have contiguous boundaries. SB298 also proposed that residential properties be allowed to exist within the boundaries of inland port zones. Existing law does not allow for residential properties to be included.
Those proposed changes drew bipartisan concerns from lawmakers.
“We’re talking about freight; we’re talking about truck routes,” said state Sen. Dina Neal (D-Las Vegas). “Now you’re including the residential areas as being part of the inland port zone. I have a huge problem with that.”
Neal said she saw no protections for residents who might object and want to appeal their inclusion within a planned inland port zone. Exacerbating that concern is another provision within SB298 that would allow for public-private entities and private entities to create inland port zones with the approval of the executive director of the Governor’s Office of Economic Development.
“Creating an inland port, to me, is a government function, not a private company function,” she added.
In remarks prepared for the committee, Lynn O’Mara from NNDA said requiring contiguous boundaries is prohibitive because much of the infrastructure they need already exists and is spread out. For example, the location of airports, freight rails and logistics companies.
Similarly, people live in homes between these key components of an inland port zone.
As for the embracing of private business, O’Mara said private companies were better equipped.
SB298 would create inland port authority boards to oversee fiscal responsibility for the port. Board members would include representatives of private companies, representatives of local jurisdictions and the catchall “key stakeholders.”
Justin Lichter, vice president of Industrial Realty Group, in written testimony submitted to the senate committee that his company recently purchased 224-acres of land east of Fernley: “Our goal is to develop the property into a thriving commercial center, as an inland port with heavy rail service.”
Other supporters included the Las Vegas Chamber of Commerce, the Reno-Sparks Chamber of Commerce and Fernley Mayor Roy Edgington, Jr.
The Center for Biological Diversity is opposing the bill; Nevada State Director Patrick Donnelly called inland port zones “sweetheart deals for industry that can have negative environmental impacts.”
“Can you imagine waking up one day and a board of industry insiders has nominated your house to be a shipping and logistics center? And that it was approved by an unelected political appointee? That is not how we want to do business in Nevada.”
The Center for Biological Diversity is also opposed to a planned inland port project in Utah. That project has resulted in a legal challenge that is now headed to the state’s highest court.
An amended version of SB298 passed the Senate Government Affairs Committee on April 9.