Mayor says Downey, Calif., close to deal for Tesla to build electric sedan at former NASA site

Mayor: Tesla to build Model S in Downey, Calif.

DOWNEY, Calif. — Tesla Motors is close to a deal to build an electric car factory at the site of a former NASA manufacturing plant in this blue-collar city south of Los Angeles, Mayor Mario Guerra said Tuesday.

Guerra said he has called an emergency City Council meeting to approve a memorandum of understanding with Industrial Realty Group, the private owners of the complex. If approved Wednesday, the memorandum could facilitate a lease agreement with the automaker.

“We’re excited by the possibility of Tesla coming here,” Guerra said. “We feel this could become the greenest manufacturing plant in North America.”

The city is involved in the negotiations because it owns 20 acres of the 80-acre complex. Guerra declined to discuss terms of the deal before the council meeting.

Tesla spokesman Ricardo Reyes declined to comment. A call to an IRG official was not immediately returned.

San Carlos-based Tesla, which makes the $109,000 Roadster electric sports car, has been looking for a factory to build its next-generation Model S sedan.

The company in June was approved for $465 million in loans from the U.S. Department of Energy to help build the Model S, which could travel as far as 300 miles on a charge. The car is slated to go into production by late 2011 with a base price of $57,400, although a federal tax credit for battery-powered cars will bring the cost to less than $50,000.

Tesla said close to 2,000 people have paid a refundable $5,000 fee to reserve one of the vehicles.

Downey was known as an aerospace hub before the sprawling NASA complex, 20 miles southeast of Los Angeles, closed in 1999. The facility was primarily involved in aircraft manufacturing and missile design. During the space race, it played a key role in development of the Apollo program and later, the space shuttle fleet.

At its height there were some 30,000 aerospace engineers and scientists on the complex.

IRG purchased the property in 2004 and converted it into a movie studio and business park.

(This version CORRECTS that Model S production is slated for late 2011, not 2012.)