Hyperloop sparks high-tech hopes for development in North Las Vegas

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Hyperloop hopes to construct a transportation system that could take passengers and freight at high speeds through low-pressure tubes. It plans to build a test track in North Las Vegas.

If Hyperloop Technologies Inc. has its way, North Las Vegas could become one of the few locations for testing the futuristic transportation platform that propels pods down pneumatic tubes.

With city and state officials working to make that happen, the company is expected to receive tax incentives today worth an estimated $9.2 million for a full-scale track. The company’s new commitment expands upon its initial goal to create a smaller open-air test track at the largely vacant Apex Industrial Park.

The full-scale 2-mile track, to be operational at Apex by the end of 2016, is expected to bring the company’s workforce here to more than 100 jobs and give it a permanent presence in Nevada.

Officials see it as a big economic development win. Hyperloop Tech estimates that it will invest more than $121 million, yet the technology remains untested, and experts are unsure about any company’s ability to bring Hyperloop to the market soon.

The Hyperloop idea came from a design floated by Tesla CEO Elon Musk, who has described the levitating pods as a mix between a Concorde supersonic passenger jet, a rail gun and an air hockey table. Los Angeles-based Hyperloop Tech is one of several teams vying to build a working model of the frictionless high-speed pods that can transport people and goods in enclosed tubes.

Hyperloop Tech declined to comment for this story, but in its tax incentive application, an executive wrote that “if selected, Nevada would be poised to compete for future expansions.”

“I think it helps solidify Nevada’s brand as a place where really innovative technology is taking place and where the future of transportation is happening,” said Steve Hill, the governor’s chief economic development officer. “It’s a special opportunity.”

The firm’s investment comes at a time when multiple efforts are underway to stimulate Apex, which, disconnected from utilities, has had difficulty drumming up private investment in past years.

A deal is in the works for a panel that will develop a master plan for Apex. The group will include the city, a nonprofit and the Las Vegas Global Economic Alliance, the economic development authority that prepared Hyperloop Tech’s incentive application.

The city of North Las Vegas also is working to lure Fortune 500 companies to embark on projects in the park, which last year was selected as the site for Faraday Future’s $1 billion factory.

Ryann Juden, deputy city manager, said North Las Vegas was expecting to identify those companies in the next few months. Infrastructure improvements are underway there, and NV Energy, the Southern Nevada Water Authority, Southwest Gas and transportation agencies are at various stages of reviewing designs, he said.

Hyperloop Tech feeds into that momentum. Juden said the company, in addition to electric car startup Faraday, could serve as examples for other companies looking to come into the area.

“They are validators of what we’re doing,” he said.

After Musk first proposed Hyperloop transportation in a white paper on the SpaceX website in August 2013, it sparked a flurry of skepticism and interest. Hyperloop Tech is one of at least two companies aggressively working to bring the platform to life, banking on it being safer and more efficient than the four other modes of transportation — boats, trains, trucks and planes.

In addition to facing competition, Hyperloop Tech is not the only company building a full-scale testing track. Another company is building a track in Quay Valley, north of Bakersfield, Calif.

Musk is not directly involved with the companies, but his firm is still involved with the Hyperloop idea. SpaceX plans to construct a full-scale track for testing near its California headquarters.

Hyperloop Tech is not without advantages.

It is, for one, backed by a strong team. Its CEO is Rob Lloyd, a former president of Cisco, and the company’s board is packed with so much startup expertise that the the Wall Street Journal described it as “a Silicon Valley fantasy-football team.”

The company says it has raised $100 million to date, and it is hiring for dozens of positions, according to its website.

Even so, the firm faces a daunting task. Hyperloop Tech has said it is trying to have a viable commercial track ready by 2021.

While the physics and technology is there to make Hyperloop possible in theory, such a goal did not seem credible to R. John Hansman, a professor for aeronautics and astronautics at MIT.

“There are all kinds of practical issues that will make this extremely difficult,” Hansman said, such as how passengers would be evacuated if the pods broke down inside the pressurized tubes.

The tax incentives, which are expected to be passed today during a meeting of the Governor’s Office of Economic Development, are not tied to the company’s success but to its spending here.

Gina Gavan, the city of North Las Vegas’ economic development director, acknowledged there was some long-term risk, but argued that some risk existed with virtually every business.

The key for the future of Apex, she said, was to find the “right type of balance and mix so (the city) can manage the risk.”