Utopia on the Truckee

innovation zones/smart city campaign heats up

IMAGE/BLOCKCHAINS LLC: An artist's conception gives a glimpse of the environment imagined for Painted Rock Smart City.

The road to building a high-tech, smart city in the desert east of Reno has so far been paved with cash and propaganda, and will soon reach a crossroads as the Nevada Legislature lurches past the half-way point in the 2021 session.

Nevada lawmakers soon are expected to consider a proposal for the creation of Innovation Zones that would allow a tech company to carve a new political jurisdiction out of the desert hills and valleys of Storey County for its Painted Rock Smart City. The official bill had yet to be introduced as of April 5, but the concept has been promoted by Gov. Steve Sisolak and others who say it is the Silver State’s best shot at a golden future. Critics, meanwhile, see the measure as a stew of potential pitfalls and boondoggles wrapped in a thin layer of shiny promises.

In a legislative session in the grip of a pandemic, person-to-person lobbying is limited. At the beginning of the session in February, Blockchains LLC, the company behind the smart-city scheme, floated its bill draft among the lawmakers. Since then, the company launched a media campaign of positive messages about the Innovation Zones concept. The first phase of the battle for public support is winding down, but is about to advance to the next level.

A multi-platform effort

Since late February, social media ads steered by algorithms have followed some web surfers from click-to-click, the governor hosted a virtual media event to tout the idea, and guest opinion pieces in favor (and some against) the plan have popped up in local newspapers and on websites. Blockchains also has been the beneficiary of what is called “earned media” – articles and television reports appearing everywhere from the BBC to CNN to the Wall Street Journal.

“These times call for a more urgent pace. Confronting the reality of this pandemic, moving forward boldly in rebuilding our economy, getting people back to work. We cannot wait for economic recovery to come to us.” 

— Gov. Steve Sisolak, Feb. 26, speaking in support of the Innovation Zones proposal.

Television commercials have aired regularly in the Reno and Las Vegas markets. The TV spot features drone-camera shots of clear water rushing down the Truckee River and wild horses racing through the sagebrush. The voiceover says: Innovation Zones can provide “124,000 jobs and $16 billion in economic impact with no financial risk to the state and accelerate the path to recovery” from the pandemic.

The message is simple and positive; for some viewers it has the whiff of snake oil.

Promises made of ‘vapor’

Sheila Parker of Reno said it’s ironic that the ad uses the wide-open spaces and iconic mustangs of Northern Nevada as a backdrop to sell an idea that, if approved, is sure to threaten those things.

“I feel strongly about this and have informed my neighbors and friends as well,” Parker said. “Selling out our present and future for the vapor of Innovation Zones is so short sighted. I am very concerned about self-governing zones, where the resources, such as water, air quality, density of population, and effect on wild horses and wildlife are issues… I have no doubt major (impacts) will happen if Innovation Zones happen.”

She’s not alone in her skepticism. Critics, both inside and outside of the state’s halls of government, have derided the self-governance part of Blockchains’ proposal. Those naysayers, as well as people who haven’t yet formed an opinion, are the targets of the ad campaign.

“Gov. Sisolak is asking that we take this scheme seriously. Fine. Let’s start with some (independent) analysis…  And then, in the unlikely event independent objective analysis indicates it is in fact a reasonable idea to give some libertarian tech bro his own town just because he made a cryptocurrency killing that one time, let’s acknowledge that seriously examining the ‘mechanics and consequences’ of the proposal is not something that is going to happen in the confines of a time-constrained pandemic-era legislative session. Take Blockchainsville seriously? You first, governor.”

—  Hugh Jackson, Nevada Current, Feb. 28, 2021.

Propaganda, then specifics

Todd Felts, an associate professor who teaches classes on public relations and advertising at the Reynolds School of Journalism at the University of Nevada, Reno, said the early stage of Blockchains’ marketing effort introduces Nevadans to the Innovation Zones idea. He compared the campaign to initial ads for a presidential hopeful, which focus on the candidate’s positive attributes.

“Then if the candidate wins a few primaries, the ads start getting more meaningful and offering some ideas,” he said. “The early ads increase public perception.”

The commercials offer vague promises, he said, and so qualify as propaganda. “Propaganda can be lies, but that’s not the only definition. In this case, they paint a beautiful picture, but there’s not a lot of there, there. (The spots) are meant to grip the emotions of the viewer… They will have to be backed with some solid information at some point.”

All ink is good ink

The Innovation Zones proposal has gotten a lot of attention around the nation and some of it has been as skeptical as Parker’s comments. Late-night talk show host Stephen Colbert, for example, devoted a segment of his show to mocking the Nevada plan as feudalism. He compared the idea to something hatched by a James Bond movie villain. Yet, Felts said, even negative mentions can help Blockchains get its positive message out to the public.

“Historically speaking, as long as people are having a conversation about what you are offering — as long as you aren’t harming people —  you are in a good place, whether they are saying good or bad things,” Felts said. Blockchains is “talking to people multiple times in multiple ways, and that’s what’s needed. Attention spans are short and the audience is fragmented across multiple platforms. The awareness stage of a campaign is critical.”

A textbook campaign

Don Vetter, a Reno marketing and advertising consultant, agreed that even non-flattering mentions of Innovation Zones can assist Blockchains’ effort to swing public opinion. “The mention on Cobert’s show is incredible earned media,” he said. “Things like that keep the issue front and center.”

“The tax structure’s already business-friendly. The problem is our education system, and healthcare system, and the services we give people are abysmal. So, if you want to attract the businesses here that will actually contribute to the economy the way to do that is to actually invest in education, in health care and mental health to bring good businesses to Nevada and keep them here.”

— Annette Magnus, director of Battle Born Progress, quoted in the Nevada Independent.

Blockchains’ campaign “checks all the boxes” for a political issue, he said, “It’s a quality campaign.”

Vetter said the association of  the project with a tech magnate cuts both ways. While some people may be wary of a millionaire who claims to have a path to prosperity, others will see that as a selling point. Tech tycoons like Bill Gates, Elon Musk and others have big ideas that can change the world. “There’s a cachet associated with them,” he said. “…They are seen as riding the wave of the future.”

The campaign has a way to go to change some hearts and minds. Aside from members of the public and some state lawmakers, “I know that many of our local officials throughout this region are very nervous about this.” Vetter said.

Shooing away ‘boogiemen

Pete Ernaut, a former Nevada legislator who is president of government affairs at R&R Partners advertising and public relations firm, is at the helm of Blockchains’ campaign. The effort soon will move from an awareness phase to public education, he said.

“There will eventually be a call to action,” he said. “…This is such an unprecedented idea that getting people comfortable with what it doesn’t do is as important as getting them comfortable with what it does do. We’re trying to eliminate bogeymen as much as possible.”

The claim of big benefits to the state at no cost to its taxpayers will be backed up, he said, and fears that creating a self-governing district will mean the return to a company-town model will be allayed. He understands that those objections may be “instinctive,” he said, but they aren’t valid.

No public price tag?

“Other big projects have had tax incentives and this has none,” Ernaut said. “There is no investment from the state or counties.” He agreed that such a large development will have impacts on surrounding cities and counties, but said the proposed tax on Blockchains’ transactions built into the Innovation Zone proposal will mitigate them. That revenue “will be distributed to the county, the state general fund, and also a higher share goes to the most impacted counties, Storey, Lyon and Washoe.”

The new county carved out of Storey County would be governed by a panel of three appointed commissioners during the building stage, but by the time services are needed the residents of the new jurisdiction will be voting in elections, he said. The Innovation Zone, rather than being a “company town,” will start off like a general improvement district, a common mechanism used by developers to make improvements during the early stages of large projects.

A game-changer

In the smart city, up to 35,000 residents will live and work within the new county’s borders. “It will be a fully-integrated community between work and living. That’s a selling point that nobody else at this point can make. It will be the second actual smart city in the world, after Songdo, South Korea.”

“People need to understand the magnitude of this, the total environment; people will live and work in this community… It’s a big dream. Lots of big dreams seemed like pie in the sky (when proposed), but now they have become integral for life. That includes the Internet itself. Blockchains’ technology has that range of possibilities, that effect on people’s lives. It’s not something you can build out one building at a time.”

Pete Ernaut, R&R Partners.

Ernaut noted that the new county would be subject to all state laws that govern Nevada’s 17 existing counties. Blockchains would build the city, but wouldn’t run it. “It’s really more like a (general improvement district), which is common when developers take on all the risk at the front end.”

IMAGE/BLOCKCHAINS LLC: An artist’s concept of a version of Blockchains’ proposed Painted Rock Smart City.

A pivot to democracy

By the time taxes would be levied and services would be needed, governance would be in the hands of elected officials. “There would be an elected board by the time they need to spend public money,” he said. “There would be hundreds if not thousands of individual businesses within the zone. The residents who live there will not be Blockchains’ employees across the board. The idea that Blockchains would control the city is sort of ridiculous… They build it, but those who live there, who operate businesses there, are completely independent.”

Still, even if state lawmakers pass the Innovation Zones measure into law, there are mountains of obstacles in the way of constructing the utopia on the Truckee. Civil libertarians worry that smart cities pose a threat to privacy, and attempts to create smart cities elsewhere have failed.

Blockchains has about 66% of the water rights needed to support the city, but the water is 100 miles away. Past efforts to transport water to Storey County via a pipeline fell to overwhelming opposition from environmental groups and the Pyramid Lake Paiute Tribe. Other regional water battles have spawned decades of litigation.

Some local governments oppose the plan, including the Storey County commissioners, who on March 2 voted to “oppose separatist governing control” within their county. Tens of thousands more vehicles would eventually be using the Interstate-80 corridor through a narrow river canyon where the highway can’t be widened.

Forging ahead

Those concerns, and many more, could stymie the smart city even if the measure clears the Legislature this session. Ernaut said Blockchains will meet any challenges.

“We’re going to keep putting our best foot forward; we’re very passionate about it,” he said. “… The rewards exponentially outweigh any perceived risk. If it doesn’t happen, there’s nothing to claw back, no public dollars will have been lost. It would be a lost opportunity for the state, but no massive financial loss except for the developer itself. If it does happen, it’s transformative.”

When the bill is introduced, all efforts will be made to get it passed, Ernaut said, and to keep informing Nevadans about Innovation Zones and their benefits.

As people become educated about the concept, he said, “some of those bogeymen will disappear.”

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