Friday, June 3, 2016

Vallejo City Council authorizes negotiations with car manufacturer

Vallejo City Council authorizes negotiations with car manufacturer

Electric car company Faraday Future’s plan to open a manufacturing plant in Vallejo has picked up a boost from the city council.

Councilmembers unanimously approved a resolution Tuesday night authorizing a six-month exclusive negotiating agreement with FF LLC, a special-purpose entity, established by Faraday Future, for the express purpose of purchasing 157 acres of land on the north side of Mare Island.

The company intends to open a second production facility, house business and administrative offices, and offer a pick-up location for customers on Mare Island.

“We love the location,” said Dag Reckhorn, vice president of Global Manufacturing for Faraday Future. “We want to bring to the city of Vallejo, quality long-term jobs to the community.”

The company will create hundreds of million investment dollars for the city, Reckhorn added.

Kathleen Diohep, the city’s economic development manager, said the site can become a “catalyst investment” for Vallejo, drawing in more businesses.

“Jobs are one of our highest priorities for this site,” Diohep said.

She added that the city doesn’t have the resources to invest in infrastructure for the site.

None of the councilmembers asked any questions or offered any responses during the meeting. They swiftly approved the resolution after about 20 individuals addressed the council.

Several speakers expressed cautious optimism for the proposed project, while others expressed concern about the logistics of how the facility will transport items to and from Mare Island.

During the upcoming negotiations, Faraday Future and the city will refine the project concept to address the scale of buildings, number of jobs created and timing of construction, according to a city staff report. The negotiation period also includes two 90-day extensions.

Both the city and Faraday Future confirmed the site would require significant work to prepare it for use.

“Faraday Future recognizes that the site requires backbone infrastructure, demolition of existing buildings, and other site work to address the geotechnical conditions that are estimated to exceed $50 million,” city officials said in a staff report.

If a final agreement is reached, the city is expected to hand over the site to the company “as is,” due to the amount of work needed to rehab the site, according to the same staff report.

The company will supply a $200,000 fee to the city, along with paying for Vallejo’s legal and consultant fees associated with the project. That fee is expected to be at least $372,000, staff said.

The city council is expected to consider a disposition and development agreement in November of this year.

The company’s 3-million-square-foot, $1 billion North Las Vegas manufacturing facility is projected to start producing vehicles in a couple of years.

Contact John Glidden at 707-553-6832.