Downey, Calif. is one step closer to becoming home to Tesla Motors‘ pricey new assembly plant. The City Council voted earlier this week to approve a memorandum of understanding with the Industrial Realty Group, the company that manages the 80-acre tract of land that Tesla is considering.
Currently used by a film and television production studio, the property would be home to the EV company’s Model S manufacturing facility — a factory that could bring up to $365 million in investment to the local area. That’s how much the company said it would allocate from the $465 million low-interest loan package it received from the U.S. Department of Energy earlier this year.
According to the Downey Council, the plant could result in $20 million in extra tax and utility revenue, on top of 1,200 to 1,500 new jobs. As part of its deal with the Industrial Realty Group, the city will pay the firm $8.7 million to lure Tesla to the area, money that could prove well worth it.
The electric vehicle company has been scouting for a plant site for months now. Its CEO, Elon Musk, had been adamant from the start that he wanted it to be in California — an interesting choice when competitors like Fisker Automotive have located much of their manufacturing operations in cheaper locales, including Asia.
It still hasn’t confirmed that Downey is its choice for the plant. The deal between the realty group and the city — which owns 20 acres of the land in question — would only make it easier for Tesla to choose it. But Downey mayor Mario Guerra insists that it’s pretty much a done deal.
Still, maybe the town shouldn’t get it’s hopes up. The company has previously been in pretty serious talks with San Jose, Calif. and Albuquerque, N.M. So until it actually inks a deal with Downey, no assumptions should be made.
Tesla is running out of time, however, and needs to get production rolling at its new facility fairly quickly to hit its late 2011 deadline for the Model S’s release. The company plans to sell each for $57,400, or about $50,000 after government tax breaks.