Nevada’s Board of Finance, led by Gov. Steve Sisolak, today unanimously voted to allocate $200 million in tax-exempt private activity bonds to a high-speed train between Victorville and Las Vegas.
The vote allows Xpress West to parlay the $200 million and $600 million in bonds from California by four to one. An additional $1 billion allocated by the U.S. Department of Transportation will give the company the ability to sell $4.2 billion in bonds.
“My father and I have been working on this project for over 15 years,” said Anthony Marnell III, who said an agreement has been reached to extend the train from Victorville to Cucamonga, near San Diego.
“This plan creates jobs without using taxpayer dollars and without impacting our State’s ability to finance future projects, and will allow a new, convenient mode of transportation between Nevada and California,” Governor Steve Sisolak said in a statement issued by Brightline, an affiliated company owned by Richard Branson.
The total cost of the project is $5 billion, according to Brightline. The company’s Florida passenger trains have been derailed by COVID-19 since March.
“The pandemic simply shows us additional need for good high-paying jobs in other fields,” says State Treasurer Zach Conine, who motioned to approve the allocation.
Brightline projects ridership at 5.5 million one-way trips in 2024, increasing to 11.6 million by 2035. The company expects to eventually capture 19 percent of the market.
While Nevada is not contributing tax dollars and bears no risk from the bond sales, the $200 million allocation is about 62 percent of the state’s annual allotment of private activity bonds, according to Christine Hess, the executive director of the Nevada Housing Coalition.
Hess voiced support for the project but asked that the state dedicate its upcoming allotment to housing. The bonds are a primary source of financing incentive for housing development. She also suggested that future “job creation projects” require a housing component.”
“We began 2020 with the smallest amount of carryover in history,” Hess told the Board of Finance.
“We just wanted to make sure everyone recognizes the importance of private activity bonds in affordable housing production,” she said in an interview.
Marnell promised the Board of Finance the project would include a housing component.
“That was a new update and we were particularly pleased to hear that,” Hess said. “One of our requests is that large scale job creation projects with requisitions for bond have a housing component, so it was really an exciting update.”
Conine said the housing project’s details are “still up in the air” but it’s slated to be on the Las Vegas parcel that will include the train’s station.
Conine says one of the ways to address Nevada’s low-income and affordable housing gap is to “create good paying jobs” such as the 10,000 projected to be generated in Southern Nevada by the train’s construction.
Nevada receives $320 million in private activity bonding capacity a year. The state gets half and the remainder is divided among local governments.
“We’ve done more affordable housing work since Jan 2019 than has been done historically and we wanted to make sure this project wasn’t going to take away from that,” Conine said in an interview.
The state’s bond allocation is tied to population, according to Conine, who said the bonds are another reason Nevadans should complete the U.S. Census.