Tesla Model S Factory Deal "99.9% Done": Downey Mayor

Tesla Motors’ long-planned Model S electric sedan may finally get a home — that is, if property negotiations scheduled to take place tonight in Downey, Calif., go as planned. According to the town’s mayor, Mario Guerra, a deal that would see the electric car startup set up an assembly line for the Model S on part of a former NASA site there is “99.9 percent done,” The Downey Patriot reports.

One of the last steps toward locking in the plant (and bringing up to 1,200 jobs to the area) could be completed as early as tonight, when the Downey City Council is scheduled to vote on a memorandum of understanding with the Industrial Realty Group, which owns a portion of the 80-acre property, in a closed session. According to the City Council agenda, the price and terms of payment remain under negotiation for the site currently occupied by Downey Studios. But Guerra tells the Patriot that as of this week, “The deal points have all been agreed to,” by Tesla, the city and IRG. “Now it’s the lawyering stuff.”

Contacted by the Long Beach Press-Telegram late yesterday, Guerra told reporters “it would be premature to call anything a done deal at this point,” although “the city and private parties involved are indeed close to terms.” If remaining negotiations go smoothly, the Guerra told the Press-Telegram that a deal could be secured within 10 days. We reached out to Tesla this morning for confirmation of Guerra’s comments and an update on the site selection process, and spokesperson Ricardo Reyes told us “We have nothing to announce at this point.”

Downey’s chief competitor for the Model S plant is Long Beach, where Tesla has been considering a site formerly owned by Boeing. According to the Press-Telegram, the startup discussed the site with Boeing “as recently as last week,” and the city has not given up on the project.

When it comes to site selection for the Model S factory, it ain’t over ’til it’s over. Tesla initially said it would build an assembly plant for the vehicle in California. It later announced plans to set up shop in New Mexico, and then it was back to California again after the Golden State put together juicier incentives, including a tax break expected to save the company nearly $29 million.

But the clock is ticking for Tesla to stay on track with its production time line — deliveries of the Model S are slated to begin in 2011. The Department of Energy, which has awarded Tesla a $365 million low-interest loan to support the sedan production facility, said when it announced the loan this summer that it expects the vehicle to reach production volumes of 20,000 per year by the end of 2013.

Photo courtesy of Tesla Motors


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