Writing Shotgun

TESLA CHOOSES DOWNEY OVER LONG BEACH TO MAKE ELECTRIC CARS

 

Tesla Motors has selected the City of Downey over the City of Long Beach as the manufacturing site for its new Model S, a four-door all-electric family sedan, The District Weekly learned early this afternoon—apparently, we discovered about 5 p.m., at about the same time as The Downey Patriot was learning the same thing.

“We’re very close to being able to make an official announcement,” Downey Mayor Mario Guerra confirmed during a brief telephone interview this afternoon. “I’m about to call a special meeting of the city council, and we’ll likely have an official announcement next week. Cars ought to be rolling off the line in 2011.”

Telephone and e-mail requests for comment were left this morning at Tesla Motors headquarters in San Carlos, CA. So far, no response.

Long Beach and Downey became finalists for the automobile plant because both cities have vast manufacturing sites that were abandoned by the aerospace industry—the former Boeing 717 location in Long Beach and the former NASA production facility in Downey. In fact, the two sites are located only a few miles apart on Lakewood Blvd.

But while Downey’s city officials were united and aggressive in their pursuit of Tesla’s enigmatic CEO Elon Musk, the City of Long Beach—particularly Mayor Bob Foster and city management—was accused of being difficult and nearly indifferent toward the possibility of a manufacturing plant that is expected to bring between 1,000 and 1,200 jobs to the area.

In fact, it was Musk who most strongly voiced that criticism, telling LBReport.com in an August 16 interview that “if the behavior of city management and the Mayor were the deciding factor, Long Beach would definitely not win.”

In that same interview, Musk said Councilwoman Gerrie Schipske was “the first and only call” to him personally and confirmed her internet journal (blog) dispatch to the effect that his company’s staff came away from meetings with other Long Beach officials “thinking that Long Beach actually didn’t really want us there and would much prefer the movie studio.”

A telephoned request for comment to Mayor Foster’s office this afternoon has so far not been returned.

“The movie studio” Musk referred to is the long-proposed and oft-delayed Long Beach Studios. The project, announced more than a year ago, encountered financial problems and fell out of escrow in March, although chairman Jack O’Halloran keeps insisting it hasn’t died.

O’Halloran most most-recently hyped Long Beach Studios as a done deal in an Oct. 10 story in the Press-Telegram that was headlined “Long Beach Studios deal with Boeing to be signed Monday, chairman says.”

But when that Monday came, The District Weekly’s Theo Douglas contacted O’Halloran at 10 a.m., and the one-day-maybe studio chief began to fudge.

“We really can’t comment on this until it’s signed. I’ve been trying to tell these guys,” O’Halloran said, and by “these guys” he meant the other anxious media he’d been talking to. “Today is Columbus Day.”

O’Halloran said that again when Douglas reached him shortly after 7 p.m. that night.

“Nobody works on Columbus Day,” O’Halloran said.

When informed that, actually, lots of people had worked on Columbus Day, O’Halloran countered, “Lawyers don’t,” and there was the rub.

“We need a contract to ink,” O’Halloran said. “All we need is a contract.”

O’Halloran asked for another 48 hours, which would mean we might have expected some results by late Tuesday? Or early Wednesday?

“It could be,” he said.

Nearly two months later, nothing.

Meanwhile, Downey, which already has a movie studio—the eponymous Downey Studios—now seems to nearly have a car company, too.

What’s the secret?

“We’ve worked hard for this for many, many months, and we’ve come a long, long way,” says Guerra. “This is something we’ve been very united about. It’s one of the few things this city council has been 5-0 on.”

For example, in September the entire Downey City Council took a field trip to the Tesla plant in Hawthorne.

“Our goal is to bring jobs to Downey, and we’ve been doing it—with the recent expansion of Kaiser Permanente, the restoration of the Bob’s Big Boy and the arrival of Kohl’s department store and Porto’s Cuban Bakery. The most-recent figures show our unemployment rate is 10.2 percent—not good, but much better than the average around here.”

Guerra says the city’s efforts were also based on civic tradition.

“A manufacturing plant like Tesla belong in those historic aerospace buildings,” he says. “And we’re going to make them into the greenest manufacturing plan in North America.

“We’re getting so close. We worked all through the weekend. We’re working today. We can’t wait to call that special session. I can’t, anyway. I’m tired.”

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  • Investing 101
    Dear City of Long Beach,

    This morning, news broke that two Eastern states are suing Standard and Poors, and Moody's, for Negligence Bond ratings.

    During the Chamber of Commerce interviews, one candidate responded that if elected, he would 'Aggressively Litigate' the Lehman Brothers Bond losses.

    Of course, Mr DeLong failed to suggest that this investment was ill timed, and risky. As an MBA, and a supposed businessman, he should have noticed what others had last year.

    Lehman stock had been falling, and falling, and falling all year. A novice investor knows to avoid the Bonds in a Corporation where the common stock is telegraphing insolvency, and severe capital risk.

    We lost 20 Million dollars due to a gross investment error. Any investor with any experience knew that wall street was in a death spiral, but we were distracted again.

    A prominent politician recently attempted to smooth this matter over by stating that it was the Bond Rating Agencies fault. That these AA, and AAA ratings were legitimate, and adequate insurance for such a huge investment. This attempt to deflect blame is naive at best.

    Long Beach got defrauded, made serious mistakes, and was misled. We were sold junk paper by a brokerage, and we received negligent advice from every idiot in the chain of sale here.

    Long Beach needs to prioritize an aggressive, pro active, high profile Class Action suit. We need to attract and use National Media to join in suing S&P, Moody's, the Brokers, the Investment house, the people who pulled the trigger on this purchase, and each and every other person who looked the other way.

    Also, it is Negligent, to FAIL TO DIVERSIFY any investment of our money.

    First time investors know this rule. Generally, one is not wise to invest more thatn 4% of their capital in any one investment. This Bond buy should have been a porfolio of Bonds, split across 25 kinds of paper, from diversified issuers. Caution could have at least had us buy 10 kinds of paper.

    To attempt to cover some behinds Politically, by saying.....Nobody could have known this, we all were shocked, this was wholly unforseeable, wholly out of the dark.......is thin....really really thin.

    We were reaching out the risk ladder for a little more interest yield, and we got burned. Big time.

    Taking a large chunk of money, and buying any one kind of asset, shows EGO, or HUBRIS, or SOLID, overly aggressive risk the farm conviction by a professional investor. It is rarely done by the pro's, unless you are really willing to bet the farm, or roll the dice, Vegas Style. People get fired, and sued for failing to spread their bets, among a range of investments, in the real world.

    We need to depose every person in the decision making process here, the Brokers, the Brokerages, the Salesmen, the Wall Street advisors, and everybody else. And, we need to press the envelope, be in the front of the line, and file against the Bond Rating agencies.

    We need representatives downtown who make getting this money back a day and night quest. A passion. A driving force.

    Thus far, we are way too quiet on this one. Way too lethargic. Way too distracted. Classic signs of the need for fresh faces and realigned priorities.

    Join the Pension systems back East, sue the rating Agencies. Now.

    We bungled Tesla, we bungled this Wetlands Buddy Bailout, and we flushed 20 Million. Something has to change.
  • howardx
    great post.
  • Ethics Refrom
    You do good work Hx. What about the Craig Beck, Mike Murchinson scandel in the Press Tele ?

    Old Mr Beck got caught accepting Gratuities?

    And Mr West is supposedly quite concerned?

    Beck should be demoted, put on probation, and Murchinson should be barred from City Business for 1 year.

    Mr Shannon is right, we need Lobbyist Reform, Ethics rules, Lobbyist Registration, and more.


    Mr DeLong accepted the most money from this clique, and one doubts that he will help drain the swamp. Look at all of the dirty tricks surrounding those Wetlands deals ?

    Mr Foster spent years as a Lobbyist, he let Murchinson be the featured guest at his recent fundraisers. Hope that this stops.

    Influence Peddling affects us all in many negative ways. Other towns enforce rules. We should too.

    Special interests own too much of this town and too many outcomes are pre ordained, or in essence, purchased.

    Makes you ill the closer you look.

    For every time that they get caught with their hand in the cookie jar, how many times do they get away with it ?
  • Janis Populi
    Seems to me that the property belongs to Boeing Real Estate not the City of Long Beach. Maybe Boeing thought they could get a better return on investment working with someone else than Tesla. Is that Bob Foster's fault? What bothers me about this article and most posts is the confused ideal that government's purpose is to subsidize private enterprise. Take a look at the loud angry dialogue about a public health plan which would benefit many many Americans. Yet there is almost silence from the media about a public dollar bailout of investment/banks to protect their profits and outrageous bonuses or the trillions spent on the war in Iraq.
  • HighHat
    Excellent! And nobody here seems to understand that the City of Downey OWNS the property that Tesla is about to lease. Big Difference. Nobody here knows what was going on in the mind of the Boeing poeple . . .
  • Dave Wielenga
    Does Downey own it? I thought it was owned by the Industrial Realty Group.
  • HighHat
    I was lead to believe that the City of Downey owns a large chunk of the land and that's why City officials were actually "at the table" during negotiations. Check it out and prove me wrong, but that seems to be the CW on this.
  • downey resident
    they own about 1/3 of the property. IRG owns the rest.
  • Re-Call Boob Foster
    I really can't believe the arrogance of Bob Foster. What was he thinking? What an embarrassment to lose out to Downey. We really should be looking to get his dissapointing ass out of office. Maybe we can get a letter writing campaign to Obama in support of an administration appointment. At least then we wouldn't have to worry about Foster sleeping on Long Beach anymore. He's gotta go!
  • lbresident
    Nobody is even running against Foster. That is a problem.
  • Wrong Again
    Oh contrare Moose Breath. Stay tuned. There are rumors all over Sacramento and elsewhere. We shall see. Who would you have run ?

    A few people are kicking around names. Have any ?

    Some ask, who would the Republican front runners be ?

    Is Alan Lowenthal truly a possibilty ?

    Does Mr Foster have some higher plan ?

    Who is truly on the short list ? Some people still wish Mr Jensen might consider it, a few people wish that somebody like John Morris should have a chance.
  • lbresident
    I don't care what party they are from as long as they reform pensions, come up with a plan to fix our infrastructure (even if it is a new tax as long as everyone pays not just property owners), and aggressively move the breakwater reconfiguration forward. Those are the issues I care most about. Foster has failed at the first two and paid only lip service to the third.
  • Gschipske
    Well, unless the Mayor of Downey was pulling my leg when he called me personally to tell me they were getting ready to schedule a special meeting of the Downey City Council to sign the MOU with Tesla...an official press conference with the Gov of California is coming soon too.
  • JuanPardell
    Gerrie - Your city is full of sacred cows. This is a historical fact. For some reason, someone pulled the plug on the Tesla deal. The answer lies somewhere along the corridors of 333 W. Ocean Blvd.
  • howardx
    im not sure why ms schipske wouldnt already know who scuttled the deal, this "i have no idea what my fellow council members are up to" act is just that, an act. the incumbency protection racket these pols run requires her to keep their secrets in return for her own being kept.
  • The Toad
    Hello, Juan--I was very pleased to see your comments appear here again; I have long found them well-reasoned and insightful. You sort-of disappeared for a while. Welcome back!
  • Name
    Way to go long beach city council.. thanks for another blown opportunity! At least you have all your pot dispensaries.
  • r u kidding foster? resign!
    Yeah! Maybe the downtown demolition committee can acquire the property, raze it, and hand it over to a connected developer who'll do nothing with the property...
  • The Toad
    .....who will in turn lease it out for CONTAINER STORAGE!
  • Mike Ruehle
    Or possibly a soccer field.
  • Huey D. Long
    The latest is that Mr Dean is talking to people about selling the crane business. Again, he is apparently asking too much. A highly credible source's partner, and others, walked away from the package with the distinct impression that the Sellers need money. Fast.

    Fascinating. Sounds like a Pain in the Assets.

    Also, upon review of the Attorney letters sent to the City concerning the Wetlands Buddy Bailout, by the Wetlands sellers, they again are in a hurry to close the deal.


    None of the contents seemed slightly persuasive, nor legally compelling.

    Most importantly, none of these letters spoke to, or resolved, or even acknowledged the far larger issues. The actual soil condition, is far worse than claimed, and there are other material issues that need to be confronted, honestly, or sources say that the concerned will simply ask a Judge to intervene.

    Feigned Due Diligence is a long way away from actual Due Diligence. The ultimate Buyer, the State of California, needs to be included as well. They have asserted that they desire a Full Soil Study, Full Disclosure, and meaningful testing. Stakeholders share these concerns.

    It was quite telling, to see Gary DidRong attempting to hurry up, and push this deal again. HE tried and tried to again streamline this bloated, Buddy enriching farse of a deal, as expected.

    Seemed as somebody was just doing what they were essentially 'hired' to do. Print money for the clique. Screw the Residents, our Municipal Balance Sheet, the actual Coastal Resources, Habitat Values and the State.

    Ever read the biography of Huey P. Long ? That shyster, pork barrel, inside dealing Southern politician who was a real operator?

    Thanks Huey D. Long
  • Business Unusual
    Ask around City Hall. Few people can understand why so many people have tried so hard to make huge profits for Dean Berger ?? To some, it is as if they have some vested right to drain our coffers, here and there ? Had it not been for the hard work of the activists, and the media, we would have learned about it years down the road.

    Something is really wrong downtown. State, and Local experts are investigating, and there are too many odd connections. They all seem to funnel through this or that Councilperson and too many things do not add up.


    City Hall has spent way too much time and money trying to keep DeLong, Dean and Berger happy, and we deserve an explanation. Something is broken and in need of repair.

    This election cycle will be a dicey referendum on all of this and more. It should get really juicy. for 3 1/2 years, the powers that be have feigned damage control fairly well, but now the spotlight is on and the questions, and new evidence, is poised and ready to trot out.

    There are too many highly unusual things to discuss. If certain powers that be are Fiducuaries, and Trustee's of our Municipal Assets, we need some new Trustee's. When rich people, feather other rich people's nests, almost exclusively, we might as well be jolly old England of old. Kings, Queen's, and peasants.

    Something has to change. Soon.

    It's as if people are doing dumb things because others have the goods on them or something ??? Uh huh. Stay tuned.
  • Mike Ruehle
    How can this be? Did someone forget to tell Telsa and Elon Musk that Long Beach is the #1 most "business friendly" city in LA County? Didn't someone tell them Long Beach would build them their own green bike lane to their facility? Didn't someone tell them Long Beach taxpayers would sponsor a bond for Telsa they would never have to pay off?

    Did Long Beach allow Telsa to get away? Or, did it drive it away by its neglect and harsh treatment? Meanwhile, Long Beach GIVES $500,000 to the Vault night club, GIVES $500,000 to Legends bar and GIVES $900,000 to Smooth's bar. Furthermore, rather than WOOing Telsa, Long Beach is focusing its energy on shutting down med-pot dispensaries. Has Long Beach confused its priorities or is Long Beach tired of being a 2nd class city and now aspires to be 3rd class? If we had a Mayor who wished to serve the public, maybe we could get some answers.
  • Bone Heads
    Long Beach just an Award....most business friendly City....but somehow, when Councilwoman Schipske tried to build a Red Team to lure, lobby annd attract Tesla, here colleagues were not interested?

    And somehow this DeLong Gang of 5, also blew the chance to attract the new Lakewood Costco to Douglas Park ?

    But hey....we have a new ''Chick Fil A'' in Marina Pacifica......LOL

    We need change from the Top down, and people that know how to do business, and attract business, not posers who fail repeatedly.

    Maybe we can put 5 more wide open bars on 2nd street ?? To drive even more taxpayer's crazy ??
  • Dan
    Congratulations Downey! This is well deserved. Downey is business friendly and knows how to seal a deal.
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