City and County Approve Incentive Package for Proposed Toyota Plant Growth

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A woman walks out of the Toyota Motor Manufacturing Texas Visitor Center.

Bonnie Arbittier / Rivard Report

A worker passes by the Toyota Motor Manufacturing Texas Visitor Center.

City Council on Thursday credited Toyota for transforming thousands of lives during its 16 years in San Antonio while it unanimously approved an economic incentive package to attract proposed growth to the site.

As announced in March, Toyota company officials are considering which of its North American factories will win millions of dollars in investment in production technology. The City of San Antonio sweetened the deal with a $9.7 million incentive package that would expand the San Antonio plant and secure its future.

The City’s package includes a tax abatement of 100 percent of Toyota’s new property taxes for the next eight years and a Chapter 380 Economic Development Fund (EDIF) grant of up to $621,000 for water infrastructure improvements.

In exchange, Toyota would spend as much as $392 million to expand existing buildings and enhance production lines and equipment during the next three years, commit to using CPS Energy and San Antonio Water Systems exclusively for 14 years, and contribute $1 million to local education and workforce development initiatives during the next five years.

Toyota also would agree to retain its current employees, and pay all of its new and existing employees the City-mandated living wage.

On June 4, county commissioners also approved a 10-year, 80 percent tax abatement on qualified real personal property.

Local Toyota officials anticipate that if the company selects San Antonio for the latest investment in technology, its 23 suppliers likely would expand operations as well.

“From the very beginning, we appreciated the strong partnership with the City of San Antonio and it’s a relationship we value at the highest levels of our company,” Kevin Voelkel, senior vice president of Toyota Motor Manufacturing Texas (TMMTX), told the Council. “It’s because of that relationship we are evaluating a substantial and comprehensive investment to refashion a state-of-the-art line that gives us the flexibility to move into the future.”

The Japanese automaker built a $2.1 billion Tundra assembly plant in San Antonio in 2003 that, along with its suppliers, now employs 7,200 people. In 2010, the City and Bexar County each provided a 10-year, 100-percent property tax abatement as the company invested another $100 million to add a Tacoma production line.

Since opening the plant, Toyota has contributed $45 million to area nonprofits, donated 700 acres to create greenspace along Leon Creek and the Medina River, and had a $50 billion economic impact on the community, as estimated by economist Steve Nivin.

“That single investment transformed San Antonio, particularly the South Side,” Rene Dominguez, director of the City’s Economic Development Department, said of Toyota’s arrival in San Antonio. “It transformed thousands of lives and, as the mayor pointed out, really created a lot of economic momentum, particularly in advanced manufacturing.”

Toyota company officials announced in March that it planned to exceed a 2017 pledge and invest an additional $13 billion in its U.S. manufacturing presence in five states, “with more to come.”

If San Antonio is selected, the proposed project would enhance the TMMTX production line with a total capital investment of $347.8 million in personal property and $44 million in property during the next three years. TMMTX would add next-generation technology that currently does not exist in its North American production lines, creating greater flexibility to produce additional vehicle models.

“This really positions San Antonio for future production investments that are in the pipeline,” Dominguez said. “If we win this project, our residents are going to be trained on the most advanced state-of-the-art assembly equipment in the world. That speaks volumes for our workforce.”

Councilwoman Rebecca Viagran (D3) told Voelkel that San Antonio values its relationship with the company, “and we hope that when you go pitch TMMTX, that they see that as well.

“I’m so excited to see what that potential can bring for all the residents here … and how San Antonio and Texas could be the leader in that technology for the nation and the manufacturing world.”

Councilman Rey Saldana (D4) called it a huge win for San Antonio. “There’s a lot of folks who take credit for the work Toyota is doing,” he said. “But it really is that workforce who is continually impressing upon the standards across Toyota that San Antonio is the place to double down.”

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