Potential employer: Lack of tax breaks killing deal

A businessman who says he wants to move companies that would employ more than 1,200 people to northern Nevada claims the state government's unwillingness to exempt him from taxation is hampering his plans.

State and regional development officials say, however, they are forbidden by the Nevada Constitution from giving tax breaks to businesses other than those specifically authorized by state law.

Gary Overman, who identifies himself as the chairman of a company known as CECI U.S.A. Operations, has told state officials he wants to centralize his companies' operations and likes the possibility of locating somewhere with useful geothermal resources.

Overman's companies CECI, RFA Power Products Inc. and Applied Magnetic Sciences Inc. leave no footprints that are detected by a Google search. They also don't appear to have telephone listings in the cities where Overman says they currently are in operation Atlanta; River Falls, Wis.; and Geneva, Switzerland.

The office address provided by Overman in his communications with state executives is in Greenfield, Ind.

Overman said the companies and their parent, a company known as Computational Equipment, are engaged in military contracts that demand a very low profile. He says the parent company has acquired control of 23 major companies in the past year.

He has told state officials that the companies need a 400-acre site to build a 390,000-square-foot office and manufacturing facility. More buildings, he said, would follow the first one.

Employment would begin with at least 200 workers, he said, and might increase to as many as 2,720.

But the sticking point: Overman demands that state and county officials provide big tax incentives.

"I'm not going to pay property taxes," he said in a telephone interview a few days before Christmas. "Why should a major company pay property taxes when 84 percent of major U.S. companies don't?"

Staff members of the Nevada Commission on Economic Development have laid out the incentives available to new employers in the state an abatement of sales tax on some new equipment, for instance, or dollars to help train new workers.

That's not enough, said Overman.

"I've spent a year trying to get something out of them," he said. "In a year, they have done nothing."

New Mexico officials, he said, have offered incentives totaling more than $1.3 billion including exemption from property taxes that would save Overman's company more than $1.2 billion over five years.

Michael Skaggs, who worked in economic development in New Mexico before he became executive director of the Nevada Commission on Economic

Development last year, said the two states have dramatically different approaches to the incentives they provide new companies.

New Mexico, he said, uses the severance tax paid by oil companies to fund education but sets aside the interest earned on the educational fund for use in economic development. And the funds can be used at the discretion of state officials to woo new employers.

"That's really hard for us to compete with," he said.

Nevada provides incentives that are carefully defined by state law, but state economic development executives say Nevada provides the biggest incentive of all no state income tax, either on corporations or their executives.

But executives sometimes get so caught up in the immediate benefits of relocation incentives that they don't think through the implications of doing business in state without an income tax, Skaggs said.

Ron Weisinger, the executive director of Northern Nevada Development Authority, has been fielding questions from Overman and his real estate agent, Brian Des Rochers of Tahoe's Choice Real Estate of South Lake Tahoe.

"We may not be able, as a state, to afford to have this company come here," Weisinger said.

And besides, Weisinger said, he's told Overman's representatives that a totally tax-free environment is unrealistic.

"If you move here, you will want fire and police protection," he has said. "Where do you think the money will come from to pay for the police and the firefighters? There's no such thing as a free lunch."