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Environment | Government

Will Apex need Colorado River water? Probably.

North Las Vegas City Hall as seen on Thursday, March 16, 2017.

With Faraday Future gone, water remains a factor in fully developing the Apex Industrial Park, a vast 21,000-acres stretch of land that North Las Vegas has viewed as its economic lifeline since the recession. Even if North Las Vegas finds an anchor tenant to replace Faraday, some question how it will reconcile attracting new water users to a region with limited water supplies.

Since the 1990s, much of the Apex conversation has centered on how to secure water and deliver it. With the exception of few wells, there is not much water infrastructure at Apex.

North Las Vegas, battered by the recession, started annexing Apex in 2008 as a way to broaden its tax base. It views the development of Apex as crucial to its recovery, and city officials have worked to bring manufacturing and distribution facilities to the park. If a large corporate tenant made infrastructure investments, it could make Apex more attractive to other businesses.

The industrial park came its closest to landing an anchor tenant in 2015 when electric-car startup Faraday Future announced it had chosen the North Las Vegas park for a $1 billion assembly plant. After the 2015 special legislative session, lawmakers tried to ease Apex’s infrastructure problems by allowing the state to issue up to $175 million in bonds, which would be paid off by Apex property owners and new tax revenue. Though Faraday paid about $6 million for the engineering and design of a water system, bonds were never issued, and Faraday Future abandoned the project earlier this year. And Apex remains without water infrastructure.

North Las Vegas Assistant City Manager, Ryann Juden, said that his team is in talks with three large companies that are interested in filling the role that Faraday might have played. He said the state would categorize each potential deal as a “qualified project,” one that invests $1 billion or more. Such projects open up incentives and could revive the possibility of state bonds.

Water was a factor when Faraday came, and it remains a factor in fully developing the site.

Unlike the Tahoe Reno Industrial Center, which houses the Tesla Gigafactory, Apex has no direct surface water source. The $74 million water project that Faraday designed for Apex would have tapped into about 1,700 acre-feet of Southern Nevada Water Authority (SNWA) groundwater (for reference, estimates have suggested the Gigafactory could use up to 2,500 acre-feet). An acre-foot is equal to the annual consumption of about two Las Vegas households.

SNWA has only received permits for 600 acre-feet of Apex groundwater. It would need approval from the state engineer, Nevada’s top water regulator, to tap into the remaining 1,100 acre-feet.

“There is currently no pipeline to Apex that would allow any water from the valley to be used at Apex,” said Steve Hill, executive director of the Governor’s Office of Economic Development.

Hill said the groundwater is a good starting point for developing Apex, and several companies are interested. It would provide enough water to build out about 2,000 acres of the park. But to fully develop Apex for manufacturing and logistics, planners will likely need additional water.

“That’s where this pipeline would come into play,” Hill said.

A pipeline would connect Apex to North Las Vegas’s water utility, which purchases Colorado River water from SNWA. Apex could then draw on Colorado River water stored in Lake Mead.

Hill said it’s hard to predict exactly what demand would be. It depends on a number of variable factors, including conservation efforts, a company’s sustainability standards and importantly, the mix of companies at Apex. Manufacturing plants and data centers tend to use more water than distribution centers. Having a balanced mix of companies at the park could even out water use.

Still, it’s possible that industrial demand at Apex could alter water use projections for Southern Nevada, former water czar and SNWA General Manager Pat Mulroy said in a recent interview.

“We’ve not had a really in-depth conversation about what industrial users use,” Mulroy said in the September interview. “You’re not going to develop Apex without running a water line from this valley to Apex. And the minute you do that, that amount of water is going to start butting up against what we have traditionally used as our calculator to figure out our future water use.”

According to SNWA’s Future Resource Plan, the wholesale water provider does not anticipate needing new resources for Southern Nevada until 2040, even under the most extreme scenario of high population growth and curtailment of Lake Mead deliveries. That date could change if new industrial users come online that use more water. It’s important because SNWA is still trying to determine, as the situation on the Colorado River becomes more uncertain, how to secure its future water. The water authority, which consumes a fraction of the state’s water, is pursuing a 250-mile pipeline to pump billions of gallons of groundwater from rural northern counties.

But the project remains controversial and has been delayed by years of litigation. Opponents are calling for more conservation and desalination agreements with other Colorado River users.

As a result, state and local officials sometimes have to weigh economic development with a company’s projected water demand. Hill said the question becomes: What is appropriate?

There have been two instances, Hill said, in which companies looking at Apex probably would not have been appropriate, given expected water usage. But Juden at North Las Vegas said that basic economics often deter companies from building water-intensive facilities in the desert.

Juden stressed the importance of Apex to the region’s economy. After the recession, a number of experts, including those in the Governor’s Office of Economic Development, identified the Apex park as critical to shielding a largely tourist-dependent economy from the boom-and-bust cycle.

“I think it’s very important you diversify the local economy in Southern Nevada,” Juden said.

Disclosure: Elizabeth Patricia Mulroy has donated to The Nevada Independent. You can see a full list of donors here.

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