Taking Charge?

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After months of negotiations, an industrial site in Downey appears to lead the race to bring an electric car factory to the L.A. area.

Tesla Motors Inc., the San Carlos-based maker of high-end electric cars, is seriously eyeing Downey Studios, a former aerospace plant that in recent years has been the filming location for such movies as “Spider-Man” and “G.I. Joe,” as a site for a manufacturing plant.

Downey is competing with Long Beach for at least 500 jobs that Tesla would bring, along with millions of dollars in sales tax revenue from a possible showroom.

Tesla is still negotiating for a 78-acre defunct airplane manufacturing site owned by Boeing Corp. in Long Beach, but the Downey location has emerged as the frontrunner, according to a source familiar with the company’s search.

Tesla may also still be looking at sites in Northern California and out of state. But Chief Executive Elon Musk has made it clear that his preference is to build the plant in the L.A. area.

It’s unclear when Tesla will make its choice official, and a spokesman for the company declined to comment. But Mario Guerra, the mayor of Downey, said an announcement could come soon.

“We feel we’re the right site and we think they will be coming here to Downey,” Guerra said. “We will have an announcement shortly.”

The plant would be a coup for whoever gets it. The facility will construct the Tesla Model S, an all-electric four-door sedan that the company plans to put into production in 2011.

When Tesla announced in March that it would put the Model S plant in the L.A. area, the Long Beach site was the company’s first choice, sources familiar with the search told the Business Journal at the time. But Tesla and Boeing haven’t been able to agree on terms, a source said.

Downey appears to have an advantage in the competition. The studio site is primarily controlled by Industrial Realty Group LLC, a Downey-based owner of industrial property across the country. But the city is a minority stakeholder in the property. That gives Downey a seat at the negotiating table and city officials have lobbied Tesla aggressively. Guerra said he or someone from the city talks to Tesla representatives almost daily.

Meanwhile, Long Beach officials are staying on the sidelines while Tesla negotiates with Boeing, which is the sole landlord of the property. A Boeing spokeswoman declined to comment on the negotiations.

Storied history

Downey Studios has a history rooted in manufacturing.

During World War II, Vultee Aircraft built bombers and training planes there. In the 1960s, North American Aviation, predecessor of Rockwell International Corp., built some of the modules for the Apollo lunar program in the site’s cavernous interiors.

Later, workers there built space shuttle components, and a full-scale wooden model of the original shuttle still sits behind tarps in one of the studio buildings.

The plant was shut down in 1999, and soon afterwards was converted into one of the largest movie production spaces in North America. The property comprises several buildings, the largest of which is 1 million square feet, and a back lot that includes a street scene.

If Tesla moves to Downey, the studio – which is owned and operated by IRG – would shut down. Tesla has negotiated to use at least 50 acres of the 80-acre site, and any remaining land would be put up for redevelopment, said Tom Messmer, vice president at IRG.

The complex’s history could be a selling point to Musk, who seems drawn to L.A.’s rich past as a mecca of the aerospace industry. Musk has based another of his companies, a rocket manufacturer called Space Exploration Technologies Inc., in a former airplane plant in Hawthorne that built some of the first 747 aircraft.

But the studio’s past also recently came back to haunt it when more than two dozen film production workers filed compensation claims alleging that chemicals in the ground caused them ailments including chest pains, headaches and respiratory problems. Several of the workers filed a class-action lawsuit against IRG and Downey Studios; the suit has since been dropped, Messmer said.

Ricardo Reyes, a Tesla spokesman, declined to address the allegations about the Downey site specifically. But, he said, “whatever site we decide to move into will be a safe one.”

Securing Tesla as a tenant would be a significant step for city officials, who have worked for a decade to redevelop the land surrounding Downey Studios. Since 1999, a mall, a learning center and a hospital have been built on property bordering the complex. The Model S plant would be the best addition yet, Guerra said.

“This land was an open canvas back in 1999,” Guerra said while giving a tour of the facility last week. “And Tesla completes the picture.”

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