Nevada Panasonic lessons can help Eudora’s future

This is the third story in a weeklong series examining the pending arrival of Panasonic. We also created a printed newspaper special section that is on sale now. Watch our Facebook page for where and when we will have copies available.

For Reno, Nevada, the construction of a new factory went well beyond bringing new jobs to the region.

“It changed our lives, not only changed our economy,” said Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada.

The $4 billion Panasonic battery plant now under construction – the most significant economic development project in state history –will soon send ripple effects through neighboring communities, including Eudora. 

With it comes a flood of questions that will soon need answers about housing, traffic, employment and long-term impact on the community.

In 2015, similar questions were on the minds of economic development officials and residents in Nevada, where a similar Panasonic plant was being built in the nearby desert town of Sparks as part of a new Tesla electric car factory. 

Nevada officials and development leaders recognize the potential for growth in Eudora and believe lessons taken from the Reno factory will provide a more well-prepared community. 

Housing for workers 

In Nevada, housing emerged as a major concern for areas surrounding what is known as the Gigafactory. The Reno factory was built as the state was recovering from a recession and facing a housing shortage. 

Local Nevada governments were introduced to a large number of new construction workers with no available housing. The housing shortage remained a concern for plant workers even after the plant began production. 

“There was a lot of reticence in the community to accelerate the growth of housing,” Kazmierski said. “When we did not do that, our housing supply continued to grow at a slow pace while the demand grew at a high pace. And that difference in supply and demand caused prices to skyrocket.”

A projected 5,000 new homes per year were needed in the region to house the estimated 6,500 plant workers in Reno and only 2,000 were built in 2016, Kazmierski said. 

At its peak, a single-family home cost on average $620,000 in Nevada when the state struggled to house plant workers, said Brian Bonnenfant, project manager of the Center for Regional Studies at the University of Nevada. 

This year the average cost has decreased to $535,000. However, the 7% mortgage rate has families waiting to sell, leaving not enough inventory. 

During the Nevada plant’s construction, many workers were housed in casinos and university dormitories due to the housing shortage, Bonnenfant said.

“We put them everywhere,” he said. “Wherever there was an empty unit, we put these guys. So that was a major concern.”

The De Soto plant is projected to employ 4,000 workers when it opens, and an influx of suppliers and other businesses is expected to add another 4,000 jobs. In addition, as many as 16,500 construction workers will come in and out of the area. 

The number of construction workers local to Johnson and Douglas counties working on the plant is still unknown. Any workers who live in the surrounding counties will certainly ease the demand for immediate housing. 

However, county officials anticipate high demand. Eudora faces challenges already with planning new housing developments as new homes are limited to areas toward the south.

Reno booms with rebranding

Before the Gigafactory opened, Reno faced a declining economy. The city was losing much of its casino and gaming attraction to other areas such as Las Vegas. The Gigafactory helped usher in a new identity for Reno while also increasing employment.

Reno’s unemployment rate fell from 14.2% in 2011 to 3.9% in 2018, according to a local economic development update. That number continues to drop, Kazmierski said.

The Gigafactory helped “rebrand” the community from tourism and gaming to advanced manufacturing, Kazmierski said.

“When you bring in a Gigafactory, you bring in more than just the building,” he said “A lot of suppliers and providers that support that effort with as many as 20 additional companies, talents and a desire for people to live in that region.”

The economic impact was felt not just in metropolitan locations like Reno and Sparks. Smaller cities, some as far as 50 miles from the factory, including Fernley, Stagecoach, Silver Springs and Dayton, also saw increased business and new jobs. 

Surprisingly, schools did not see a substantial increase in Reno and Sparks. An initiative was planned to build and renovate schools in the area. However, most plant workers were single-family millennials with few children.

“We have not had a problem with school capacity in part because a lot of the people working here tend to be younger or they already live in the community,” Kazmierski said.

“Enrollments have been flat for 10-plus years since the Great Recession,” Bonnenfant said.

Growing pains

Public opinion was a great concern for Nevada’s development. Residents weary of the factory made their voices heard in the community, creating a divide that local governments needed to carefully navigate.

While the Nevada factory was in the production phase, skepticism for the new factory was felt throughout Reno, particularly from those attending city council and zoning meetings. This resulted in residents being reluctant to accept the new manufacturing rebrand of Reno.  

“There is always going to be pushback to change,” Kazmierski said.

“What I say to the naysayers is, ‘Do you want your children to be able to afford to live here?’” Bonnenfant said. 

The objectors to the Gigafactory expressed their dismay at the change occurring in the community, setting back development projects. New affordable living and roads in Reno were major points of contention during city council meetings where Kazmierski was present stressing the need for these projects.

Reno-Sparks is geographically different from the De Soto area with the latter having access to more accessible roads and entryways to the construction site. Traffic is still a major concern among Douglas County residents, and Nevada officials recommend addressing these issues early. 

The Gigafactory has only one entryway for employees to commute to work. Even during the construction process, it was a struggle for workers to get to and from the site, Kazmierski said. 

Reno Vice Mayor Devon Reese shares the same traffic concern. 

 “If you put 4,000 more cars on the roadway from Point A to Point B, there will be congestion. The road on the way to the Gigafactory is I-80, and so I-80 is essentially two lanes of traffic on both sides,” Reese said. “If you have an accident in the canyon, you’re going to have a backup for quite a long time.” 

Bus routes have eased the tension because Panasonic provides workers with rideshare. This has decreased traffic jams en route to the factory, but the interstate can still be subject to unfortunate circumstances in case of accidents. 

Solutions to rectify these issues in Reno have yet to be solved due to the resources needed to create the infrastructure needed for more accessible transit. 

“It needs to be a priority in the state and, right now, the state priorities are all about Vegas and not Reno,” Kazmierski said. 

Lessons for Eudora

In hindsight, Nevadan economic developers agree issues surrounding the factory should have been addressed sooner, particularly in housing and new roads. 

Kazmierski said many of the issues Nevada faced with its factory are not one-to-one when it comes to the Kansas factory. Surrounding cities like Kansas City and Lawrence could ease some of the housing constraints seen in Eudora and De Soto. However, that is not a solution, he said.

“First off, we should have gotten serious sooner,” Kazmierski said. “That means building a community coalition, meeting every month, identifying challenges and building a plan to solve those challenges Even if it’s something as simple as road infrastructure because traffic is what aggravates your anti-growthers.” 

Bonnenfant suggests getting creative with housing solutions, such as building senior-living centers to help free up inventory of single-family units. Higher-wage jobs will provide new opportunities, but it is not certain those new workers will choose to live in Eudora. 

To help maintain a growing population, Bonnenfant believes the economic impact of the plant resulting in new businesses and, in turn, new amenities for better living will help Eudora become more attractive to homebuyers. 

“What are the amenities? Would you want to live there?” Bonnenfant said. “If you don’t have those, then I would be leery of building too much product in Eudora.”

Reese encourages Eudora residents to take advantage of the new plant’s growth potential and use it to make a better future.

“Communities that hold too tightly to the past miss the opportunity to grow,” Reese said. “I think Eudora is a great example of a community that’s going to have to decide: Are we going to change, and are we going to change willingly and go along with the process, knowing the result will be great to us? Or are we going to stick our head in the sand and say, ‘It won’t happen here.’ I don’t think that’s realistic.” 

Reach reporter William Crow at [email protected].

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