Tesla Motors is close to finalizing a deal to build the Model S sedan in an old NASA assembly plant in the Los Angeles suburb of Downey, the mayor said.

Tesla Motors has for months been searching for a factory in which to build the car. Downey Mayor Mario Guerra told the Long Beach Press-Telegram the city council will meet Tuesday or Wednesday with International Realty Group, the owners of the site, to broker a memorandum of understanding to facilitate a lease with Tesla. The deal includes 80 acres of land, some of which is owned by the city, and the city is putting together an incentives package to help lure the Silicon Valley automaker.

"We are looking at what we'll be able to give to make the deal happen," Guerra said.

Tesla spokeswoman Rachel Konrad said the company had no comment on the report.

Guerra's announcement suggests Tesla is no longer considering a former Boeing factory in nearby Long Beach, but unnamed officials "close to the negotiations" told the Press-Telegram they have not heard Long Beach is out of the running. The weekly newspaper the District also is reporting that Tesla will choose Downey.

“We’re very close to being able to make an official announcement,” Guerra told the District. “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.”

Tesla has long promised that the four-door, seven-passenger Model S sedan will be on the road by the end of 2011 with a price of $49,900 after the $7,500 federal tax credit on EVs. The Department of Energy is loaning Tesla $464 million to build the car.

Photo: Jim Merithew / Wired.com

See Also: