Municipal government

In the Nevada desert, Blockchains LLC aims to be its own municipal government

In the Nevada desert, a cryptocurrency tycoon 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 the 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 more. personal data – on 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 wants to pave the way 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 behind the bill some lawmakers saw behind closed doors last week, said traditional government does not provide enough flexibility to create a community where people can invent new ones. uses for this technology.

“There must be a place somewhere on this planet where people are willing 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 would have powers like those of a county government, including creating court systems, imposing taxes and building infrastructure all the way. by making land and water management decisions.

The prospect has been met with intrigue and skepticism by lawmakers in Nevada, although 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 tourism-dependent economy, but many fear a backlash against trade incentives as they struggle to fund health care and education.

This proposal differs from big tax breaks they have been reluctant to offer, 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 have offered. to Amazon to build a new headquarters.

But it raises deeper concerns about the growing grip of tech companies on everyday life at a time when antitrust regulators and Congressional Democrats allege tech giants like Facebook and Google are controlling markets and putting the money to work. 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.

Sisolak, whose campaign and affiliate political action committee received a combined $ 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 next step or not. But, look, it’s a big idea and Nevada was built on big ideas, so let’s hear it, ”said State Senator Ben Kieckhefer, a Republican who sponsored blockchain-related legislation in 2017 and 2019.

If lawmakers back the proposal, tech companies with 50,000 acres of land (200 square kilometers) that promise a $ 1 billion investment could create areas governed by three people as county commissioners. The bill indicates that 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 have yet to be answered.

Commissioner Lance Gilman, owner of Mustang Ranch brothel and who bought most of the county’s land for an industrial park decades ago, has supported the attraction of tech companies to the area and the growth of his population. But Gilman, who worked in marketing for Blockchains LLC from 2018 to 2019, said there are many unknowns surrounding the cession of control to a new jurisdiction located within the county lines.

“(The bill) wants the host county to let him train, to be successful, not to pay him a lot of money, and to end up letting them take over the whole county and all the operations, if he is successful, ”Gilman said. “If that doesn’t work, who becomes responsible 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 property is located, but does allow 3,500 homes in Painted Rock, a sub-section 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 former county manager Pat Whitten told 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 in 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.

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