You Are Now Entering…The Innovation Zone!

(Chuck Muth) –  In his State of the State address, Nevada Gov. Steve Sisolak announced a proposal to create an “Innovation Zone” for a large parcel of land in rural Storey County.

The proposal was met with much reflexive opposition from some conservatives and Republicans (not necessarily the same thing) for no reason other than Gov. Sisolak proposed it.  Which is understandable considering how badly he’s fouled up handling of the COVID crisis.

But is it really a bad idea?

I don’t know.  Which is why I’m starting to look into the project more deeply.  And lemme tell you…it’s confusing!

Let’s start with the fact that the project is being proposed by a company called Blockchains.  And what exactly is Blockchains?  Oh, that’s easy…

     “This Blockchains subsidiary develops products for Web3, with an emphasis on digital asset custody and management, digital identity and reputation and connecting devices to blockchains.”

I mean, can it be any clearer than THAT?!!

OK, before your techno-troglodyte head starts to hurt, let’s move from what Blockchains is to what it wants to do with this 67,000 acres of undeveloped, barren desert.

In short, the company wants to build a “smart city” – including residential homes and commercial businesses – that would be governed independently of the Storey County Commission.

Laws, ordinances and taxes being determined by elected representatives closest to the people?  Sounds like a small-government philosophy conservatives would heartily embrace.  But change isn’t easy for many people to accept, especially for a new, untested concept.

However…

Blockchains’ Painted Rock Smart City and Innovation Park isn’t a completely new and untested concept in the U.S.  There’s actually a very successful, widely-recognized similar project that’s been around for more than 50 years.

Back in the 1960’s, a well-known corporation proposed developing a large, 27,000-acre swath of land in Florida that would be governed privately and independently from the local county and municipal governments.

The proposal was originally named “Project Winter.”  Later it was referred to alternately as “Project Future,” “Project Florida,” “Project X” and the “Reedy Creek Improvement District” – before settling on the household name you’ll immediately recognize when we get to it.

The project sought status from the Legislature as a “special district” governed independently from the county government in which it was located, as explained by Chad Emerson of Florida State University in a report published in 2009…

     “This autonomy and actual legislative capacity, elevates a special district from merely an advisory board (such as a zoning board) to the level of the parent government (such as a city council) serving in an actual legislative capacity.”

OK, fine.  But what exactly were the practical considerations and effects of this “special district” designation?

Most importantly, it allowed the company to “control (its) own destiny” and prevent the county from approving a “jungle of signs, lights and fly-by-night operations” that would otherwise spring up hoping to feed off the project’s success.

The Reedy Creek Improvement District would also be able to control the development of private residences within its borders, as well as the power to control “land reclamation, water and flood control, waste collection and disposal, pest control, fire protection, issuance of bonds, land use and building regulations.”

But here’s what I found most intriguing about the proposed “privatization of governance” from Mr. Emerson’s report…

     “For governing purposes, the legislation created a five-person Board of Supervisors, all of whom had to own land within the District.  To elect the Board, the legislation provided that ‘each landowner shall be entitled to one (1) vote…for every acre of land and for every major fraction of an acre owned by him in the District.’

     “This interesting provision meant that prospective nonlandowner residents of the District, such as renters, or landowners owning less than one-half acre would not be entitled to vote in Board elections.”

Now, I don’t know if Blockchains intends to pursue such a voting limitation for residents of its Painted Rock Smart City and Innovation Park, but it’s a concept that was considered and ultimately embraced by our Founding Fathers.

Indeed, James Madison observed that if you extend voting “equally to all, the rights of property [owners] may be overruled by a majority without property.”

But, as Mr. Emerson notes, Reedy Creek “sought private powers not to govern and enforce its will on other landowners” outside of the project, “but instead to strictly limit this governance to its own land holdings.”

You see, the developer had painfully learned an important lesson from an earlier project in California where the company had “failed to acquire much of the surrounding area” for its project there.

As a result, after the project became popular “a slew of cheap motels and shops” sprang up in the surrounding area that “created a visual blight.”

To avoid that problem, the company sought control over a “buffer” area around its Florida development that would keep undesirable businesses away from the project and protect its image and appearance.

Without that power, such decisions would be made by “county commissioners, building departments, fire chiefs and other regulators,” not the investors in the project.

Two final points from Mr. Emerson’s report…

1.)  The company “sought increased control over a project that would never have existed but for (the company’s) investment in the effort.”

Ditto the Blockchains project.  If it doesn’t develop that land, that land is likely to remain undeveloped.

2.)  If the Florida Legislature decided the Reedy Creek Improvement District “was not governing in an effective manner, it could have repealed the District’s authority at any time and reassigned it to existing public governance entities.”

That didn’t happen.

Instead, Reedy Creek has been “wildly successful” and is “one of the world’s largest development projects” that has demonstrated “how unique allocations of public and private governance can promote visionary efforts.”

Is the Blockchains project akin to the Reedy Creek project?  We’ll see.  The devil, as you know, is always in the details.

And that’s what the Nevada Legislature will be deciding over the next few months as it reviews, discusses and debates the proposed legislation which declares, in part…

     “The traditional forms and functions of local government political subdivisions existent under Nevada statute are inadequate alone to provide the flexibility and resources conducive to making the State a leader in attracting and retaining new forms and types of businesses and fostering economic development in emerging technologies and innovative industries.

     “To accomplish the objective of diversifying the State’s economy and providing for new and alternative sources of revenue for the fiscal support of the State, an alternative form of local government political subdivision with the powers and authority prescribed by this act is an appropriate means and necessary measure to further economic development within the State and to benefit the property, persons and private enterprises located in such political subdivision, all of which is a valid public purpose.”

Oh, yeah, I almost forgot: You don’t know the name of the Florida project as Reedy Creek.  You know it by its far more famous name…

Disney World!

FAMOUS LAST WORDS

“The big difference between Disney World and Disneyland in California is that this is a real estate venture for us.  The amusement park is just a catalyst that will draw other investments here.” – Roy Disney, 1970

“I don’t understand much about politics…” – Blubber-blogger Jon Ralston, 1/2/20

Mr. Muth is president of Citizen Outreach, publisher of Nevada News & Views and blogs at MuthsTruths.com

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