City Council approves $8.9 million deal to pave way for Tesla

After months of anticipation, the City Council unanimously approved an $8.9 million deal today, bringing Tesla Motors one step closer to moving to Downey. In a special session this afternoon, the Council approved a memorandum of understanding with Industrial Realty Group granting the Downey Studios owner several economic development incentives to facilitate a Tesla Motors plant on the site. "The City of Downey has been working with IRG for 6 months to bring in this new tenant," said City Manager Gerald Caton. "This memorandum sets forth an economic development package to help make this happen." Under the agreement, the city will waive nearly $6.9 million in future IRG rent payments on the 20 acres of land currently used by the corporation. The city will also relieve IRG of its obligation to provide space for a 40,000-square-foot learning center on its property. IRG will continue to store the city's full-sized Space Shuttle mock-up until October 1, 2010, when the city expects to complete a new $250,000 shelter structure for the mock-up. In order to accommodate Tesla inside the existing buildings on the former NASA property, the roofs must be repaired and improved, a $1.8 million task the city will pay for with federal grant money. Before the vote, Tom Messmer, IRG's vice president of construction and project management, commented on the memorandum, praising the city for its hard work. "It has been a wonderful experience working with Downey," said Messmer. "We hope to work with Tesla for many years to come." Once Tesla Motors moves to Downey, the City Council expects the deal to bring more than $20 million in revenue to the city. "Those are conservative estimates - it could be closer to $25 million," said Councilmember Luis Marquez shortly before the vote. "The direct and indirect benefits that we will receive over time will be incredible." Councilmember David Gafin called the decision, to bring Tesla and its 1,200 jobs here, a no-brainer. "Just take a look at the numbers," said Gafin. "At a time when our nation and state are struggling, Downey is taking the forefront to create these jobs." After the decision, Mayor Mario Guerra thanked city staff and promised the site would become the greenest manufacturing plant in the country. "Proverbs says, "Where there is no vision, the people perish," said Guerra. "This city has had a vision for many years - this is the result of a lot of hard work." Tesla Motors will utilize nearly $365 million in low-interest loans from the U.S. Department of Energy to manufacture and assembly the Model S, an electric sedan that travels up to 300 miles per charge. Caton hailed the prospect of a Tesla Motors manufacturing plant as a return to Downey's innovative history. "For people who live around here - this has a very significant impact," said Caton. "For 70 years, until 1999, Downey has had innovative manufacturing - this is a great opportunity for the city to continue that legacy." The Apollo Space Program and U.S. Space Shuttle Program used the site for the manufacturing and assembly of spacecraft for nearly 50 years. "Stay tuned," said Guerra. "The work has just begun - There are many great things still to happen."

NewsEric Pierce