The Treasury Department decided to allow a Nevada county to be designated as an “opportunity zone” after initially determining it was too wealthy to get the designation after pressure from state Republicans, according to The Washington Post.
Nevada Gov. Brian Sandoval (R) and Sen. Dean Heller (R) reached out to Treasury Secretary Steve Mnuchin to win the designation for Storey County.
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Behind the scenes, the Post reported that Lance Gilman, a GOP donor, brothel owner and real estate investor, had pushed local officials to press for the designation, which he saw as a way to win investments for the area.
Treasury had initially determined that Storey County’s median income of $65,508 meant it was too wealthy to get the designation, but changed its determination after being presented with new data, according to the Post.
One business owner in Dayton, Nevada, said he was concerned that his area did not win an opportunity zone, even though his county was a lower median income than Storey County.
“That would be a concern to me as a Lyon County resident because Lyon County is definitely impoverished compared with Storey,” business owner John Cassinelli told the Post.
Two parts of Lyon County did get the designation, but not Dayton, the Post reported.
The designation also raised eyebrows because Tesla, Google and Walmart all have offices in Storey.
The Post also noted that Gilman, a Storey County commissioner, gave $5,000 to Heller’s campaign as the designation was being sought. Heller is facing a tough reelection race this fall.
A spokesman for Sandoval told The Post that Nevada initially didn’t nominate Storey County for the designation because it was told it would not quality.
“Nevada originally wanted to nominate the Storey County tract but was told by [Treasury officials] that it did not qualify,” Mary-Sarah Kinner, Sandoval’s communications director, said.
“After continued research, which revealed a discrepancy between Treasury guidance and IRS regulations, Governor Sandoval and Secretary Mnuchin spoke. Based on that conversation, Nevada submitted the revised letter,” she added.
Sandoval did not speak with Heller or Gilman about the issue, she said.
Acting IRS commissioner David Kautter wrote to Sandoval last week, informing him that the green light had been given to change the requirement, The Post reported.
Treasury officials denied the rule change was a special favor.
“The state of Nevada raised an issue relating to data supporting Opportunity Zone nominations,” a Treasury Department spokesman said. “In response to Nevada’s feedback, the (Internal Revenue Service) has clarified its procedures and all future nominations.”