In the Nevada desert, a tech company aims to be a government

CARSON CITY, Nevada (AP) – In the Nevada desert, a cryptocurrency mogul hopes to turn dreams of a futuristic “smart city” into reality. He does this by asking the state to let companies like his form local governments on land they own, which would give them power over everything from schools to law enforcement.

Jeffrey Berns, CEO of Nevada-based Blockchains LLC, envisions a city where people not only buy goods and services with digital currency, but also record their entire footprint online – financial statements, medical records, and personal data – on the blockchain. Blockchain is a digital ledger known primarily for recording cryptocurrency transactions, but has also been adopted by some local governments for everything from documenting marriage licenses to facilitating elections.

The company aims to innovate by 2022 in rural Storey County, 19 kilometers east of Reno. It proposes to build 15,000 homes and 33 million square feet (3 million square meters) of commercial and industrial space within 75 years. Berns, whose idea is the basis of a bill some lawmakers saw behind closed doors last week, said traditional government did not provide enough flexibility to create a community where people can invent new uses of its technology.

“There has to be a place somewhere on this planet where people are ready to start from scratch and say, ‘We’re not going to do things this way just because that’s the way we have it. done, ”Berns said.

He wants Nevada to change its laws to allow “innovation zones,” where companies have powers like those of a county government, including creating court systems, imposing taxes and building new homes. infrastructure while making land and water management decisions.

The prospect has sparked intrigue and skepticism from lawmakers in Nevada, though the legislation has yet to be formally tabled or discussed in public hearings. Most members of the Democratic-controlled Legislature are keen to diversify Nevada’s economy, dependent on tourism, but many fear backlash against trade incentives as they struggle to fund healthcare and l ‘education.

This proposal differs from the big tax rebates they are wary of offering, such as the $ 1.3 billion given to Tesla to build its battery plant in northern Nevada or the billions that New York and Virginia offered to Amazon. to build a new head office.

But it raises deeper issues about the growing grip of tech companies on daily life at a time when antitrust regulators and Democrats in Congress say tech giants like Facebook and Google are controlling markets and endanger people’s privacy.

Blockchains LLC and so-called Innovation Zones were a key part of Governor Steve Sisolak’s State of the State address in January, when he outlined plans to rebuild a more diverse economy after the coronavirus pandemic. .

Sisolak, whose campaign and affiliated political action committee received $ 60,000 from the company, said the proposal would turn Nevada into “the epicenter of this emerging industry and create the well-paying jobs and incomes that go. with.

The governor’s office declined to comment further on innovation zones. But with Sisolak’s backing, the idea could be seriously considered in the Legislature.

“I don’t know enough yet to say whether I’m comfortable with this as a next step or not. But listen, this is a big idea and Nevada was built on big ideas, so let’s listen to it, ”said Sen. Ben Kieckhefer, a Republican who sponsored blockchain legislation in 2017 and 2019.

If lawmakers back the proposal, tech companies with 50,000 acres of land (200 square kilometers) that promise a billion-dollar investment could create areas ruled by three people like county commissioners. Bill says two of them would initially come from the company itself.

In Storey County, home to the Tesla plant, officials are awaiting more information before giving their opinion, but say questions still need to be answered.

Commissioner Lance Gilman, who owns the Mustang Ranch brothel and bought most of the county’s land for an industrial park decades ago, has supported the attraction of tech companies to the area and its growing population. . But Gilman, who worked in marketing for Blockchains LLC from 2018 to 2019, said there were many unknowns about the transfer of control to a new jurisdiction located within the county’s borders.

“(The bill) wants the host county to let the country form, be successful, not pay them a lot of money and ultimately let them take over the whole county and all the operations, if it is successful,” he said. Gilman said. “If he doesn’t succeed, who takes responsibility for everything that has been built in the meantime?”

County master plan does not allow residential development in the Tahoe-Reno industrial hub, where most of Blockchain LLC’s properties are located, but it does allow 3,500 homes to be built in Painted Rock, a subsection of the 67,000 acres. (271 square kilometers) of the company.

Berns said officials told him in an informal chat two years ago that they were not interested in zoning for more homes, a meeting that former County Director Pat Whitten confirmed. Berns understands that Storey County’s elected leaders may not want an experimental town in their backyard, but thinks the idea should be a state decision because of its potential to “singularly define.” Nevada for the future ”.

“We bought 70,000 acres of land in the county. What did they think we were going to do? he said.

The former consumer protection lawyer said the idea arose out of how he viewed the government as an unnecessary intermediary between people and ideas.

“So that we can take risks and be flexible, nimble and understand things the way you do when you design new products, that’s not the way government works. So why not just create a government that allows us to do these things? Berns said.