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May 25, 2010 > A phoenix rises for Fremont

A phoenix rises for Fremont

Following the disappointment of NUMMI's closure at the end of March, behind-the-scenes negotiations have come to fruition with a surprise announcement on Thursday, May 20. An agreement between Toyota Motors Corp and Tesla Motors, Inc. includes the investment of $50 million in Tesla by Toyota and purchase of the NUMMI plant by Tesla to begin manufacturing Tesla Model S electric cars at the idle facility in Fremont.

The City of Fremont recently received a $333,000 grant from the U.S. Dept. of Commerce Economic Development Administration (EDA) to help develop a Recovery Strategy at the NUMMI site and surrounding area encompassing 850 acres. The potential for this large parcel of land is enhanced by construction of a Bay Area Rapid Transit (BART) Station nearby.

According to Fremont Economic Development Director Lori Taylor, "The studies will go forward because we are still looking at an over 800-acre site with a lot of opportunity for job generation." Due to the Toyota-Tesla announcement, interviews for consultants scheduled for this week have been postponed for several weeks to "get a better sense of what is going on and refine our questions and scope."

Taylor noted that although the City of Fremont was previously optimistic that something might happen, many cities have been talking with Tesla and competition for their manufacturing facilities was intense. It appeared that Tesla was concluding an agreement for relocation to the Los Angeles area. Earlier discussions with Tesla regarding smaller and thought-to-be more appropriate facilities in Fremont had not met with success; a partnership between Tesla and Toyota including use of the NUMMI site was not anticipated.

Between Solyndra's $535 million loan guarantee and the $465 million Toyota-Tesla partnership, there is potential of $1 billion of investment in Fremont and the Southeast Bay Area. Taylor commented that Fremont now has two "superstars" of the United States plus many other prominent green-tech companies in the area. "This puts Fremont on the map as the center of green-tech. We also have a great base of biotech as well. The Toyota-Tesla announcement is a great opportunity for Fremont and our area."

She added that the availability of affordable space, a great workforce and the City's ability to meet complex permit needs promptly are critical factors in attracting and retaining high tech industries to Fremont. Although green-tech businesses such as Tesla put a distinct imprint on the area, they may not have an immediate and significant effect on Fremont's budget due to tax exemptions.

Fremont Mayor Bob Wasserman commented, "We anticipate the Tesla operations to serve as a catalyst in revitalizing the area and the economic outlook for the region." He added that production of a affordable electric car in Fremont can lead to consolidation of similar R&D and manufacturing in the local area.

``We're going to create electric cars together,'' Musk told a news conference at Tesla's office in Palo Alto. ``It's a great honor to work with a company like Toyota, one of the automobile leaders of the world and one I've personally long admired.''

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