The Los Angeles City Council on Tuesday approved a SpaceX permit to lease 19 acres of land in the Port of Los Angeles, where the company plans to build a major manufacturing facility.

The lease will begin at $1.7 million a year and then grow on an annual basis, with SpaceX expected to pay $52.8 million over the full 20-year period. The company may be able to offset those costs through $44.1 million in "tenant credits" for improving the property.

SpaceX's new rocket factory will be for its massive, next-generation rocket called Starship. The rocket so far has been developed at SpaceX facilities in Texas and Florida. But the new location adds capacity for SpaceX within driving distance of its headquarters outside the Los Angeles International Airport, where the majority of the company's more than 6,000 employees work.