Hyperloop Technologies gets $9.2 million in tax incentives

Courtesy Photo

Hyperloop hopes to construct a transportation system that could take passengers and freight at high speeds through low-pressure tubes. It plans to build a test track in North Las Vegas.

State officials approved tax incentives worth an estimated $9.2 million for Hyperloop Technologies Inc., one of the teams competing to build a transportation platform that shoots pods through miles of enclosed pneumatic tubes.

The company, which is considering a 2-mile test track in North Las Vegas, is expected to spend more than $121 million on the project. The company expects to make a final decision in the coming weeks.

The Hyperloop idea came from a design floated by Tesla CEO Elon Musk, who has described the pods as a mix between a Concorde supersonic passenger jet, a rail gun and an air hockey table. The frictionless, high-speed pods that could transport people and goods are cast as a safer and more efficient alternative to trains and other vehicles.

Brian Gaumer, director of test and development at Hyperloop Technologies, said the company is finalizing contracts and closing agreements.

It has been in talks with NV Energy and the Southern Nevada Water Authority to ensure utilities would be available. In February, the company submitted plans for the full-scale track with North Las Vegas.

Gaumer could not comment on if and what other locations the company was considering.

In a letter to the Nevada Governor’s Office of Economic Development, an executive with the company said the incentives were “a significant factor in the decision to locate in Nevada.”

The company is already building an open-air test track at the Apex Industrial Park in North Las Vegas. It said it originally picked Apex, which would also be the site of the new project, in part because of the topography and the cost-competitive environment.

Apex has long struggled to attract development because of a lack of connected utilities. But Gaumer said that Hyperloop Technologies has been working actively to address those issues.

“We have been having conversations about infrastructure,” Gaumer said. “But right now, we’ve been getting great cooperation with the Southern Nevada Water Authority and NV Energy, so we really do not see any major issues with getting that infrastructure put in.”

In addition to the $9.2 million abatement on sales, business and property taxes, Hyperloop Technologies is eligible for a tax credit tied to employment and worth up to $750,000.

Gov. Brian Sandoval called the new technology “transformational.”

The full-scale track would largely be used for technology development. “We are taking a lot of existing technology and putting it on steroids,” Gaumer said.

Steve Hill, the state’s chief economic development official, applauded the cooperation among different parties, including the city, utilities and the Bureau of Land Management.

The project could create more than 89 jobs over the next two years.

A panel convened by the Governor’s Office of Economic Development also awarded tax abatements to five other companies with Northern Nevada operations during a meeting this afternoon.

A snack company received tax incentives for new operations it’s planning in Northern Nevada. Mary’s Gone Crackers Inc. was granted tax incentives worth an estimated $2 million.

The gluten-free snack manufacturer was considering relocating its company headquarters and manufacturing for North America. Instead, it now plans to invest about $19 million in Nevada over two years, creating more than 220 positions.

Mary’s Gone Crackers already has a presence in Nevada.

It plans to be manufacturing at least some of its gluten-free crackers and cookies here by the start of October.