The City of San Antonio and its local utilities are putting forward a $185.2 million offer to help lure Toyota’s next big assembly line to San Antonio.
On Thursday, council members voted 11-0 to offer the Japanese car manufacturer a combination of tax incentives, grants, infrastructure funding and fee waivers to bring another vehicle assembly line to the South Side.
The city-approved incentives total $147.8 million. The San Antonio Water System and CPS Energy would add $42.5 million in infrastructure support and savings on natural gas usage.
“We’re hopeful if San Antonio is selected, it will be another once-in-a-generation investment,” said Toyota Texas President Frank Voss, who attended the meeting.
It’s not a done deal. Toyota has said it’s considering other sites in the U.S. for its proposed $2 billion facility and the 2,000 jobs that accompany it, but if the company selects San Antonio, it would move quickly.
During the presentation, Assistant City Manager Alex Lopez outlined a construction timeline that would start in September and end in mid-2030. The facility would be 2.5 million square feet and allow Toyota to produce 200,000 vehicles. It would be built to the east of Toyota’s existing vehicle plant.
A complex incentive package
The city’s incentive package is headlined by a 10-year, 100% tax abatement, meaning Toyota would not have to pay taxes on real or personal property between 2031 and 2041. City officials estimated the value of that incentive at around $88 million.
It’s not the only piece of the incentive puzzle, though. City council members also approved $24.5 million for road improvements at the western entrance to Toyota’s campus and for a new eastern entrance and highway connection.
A $9 million grant is being set up to train workers, including new hires from the city’s Ready to Work Program.
The city will waive $500,000 in fees and is recommending CPS Energy include Toyota’s new facility in its economic incentive program — a $16.2 million-valued benefit. SAWS will waive its own $4.5 million in fees.
An additional $20 million in infrastructure support is being offered by both of the city-owned utilities.
Toyota will have to meet a series of obligations on its end, including hiring 2,000 workers and paying them at least $32.46 an hour — the county’s average annual wage. Workers might not be paid that much at face value, but the city will look at bonuses, overtime and shift differentials to calculate the total cash value of Toyota’s pay to workers.
Half of those workers must live in Bexar County. Toyota also has to use 10% of the money they save on the tax abatement for worker training, transportation or childcare. Several approved worker training programs are laid out in the agreement between the city and the car manufacturer.
City staff projected the new assembly line to have a $3.2 billion economic impact during construction, based on the wages and spending generated between 2026 and 2030. The city could still generate $34.7 million in tax revenue from sales taxes
Given its $185.2 million-valued incentive package, the city and its utilities are spending roughly $92,628 per each new job created. Most of the incentives aren’t money that the city will spend directly, though.
“Most of our share is not cash out the door, it is revenue we only forego once the $2 billion is actually built, and in return we gain a permanent expansion of our tax base and a forever revenue stream that continues long after these incentives have ended,” said Councilwoman Ivalis Meza Gonzalez (D8).
But the City of San Antonio is also in need of short-term revenue. A few minutes after approving Toyota’s incentives, council members discussed short-term budget issues.
“We are, as many know, navigating a budget deficit in which our revenues are not keeping pace with our expenses,” said Councilman Jalen McKee-Rodriguez (D2).
The incentives also come with strings attached. If Toyota doesn’t meet its requirements, leaves or stops or slows production, the city can claw back its funds.
It’s part of a wider push from local officials to incentivize Toyota’s expansion. The company also applied to a state program for a 25%, 10-year abatement for taxes that would be paid to Southwest Independent School District.
That application is being considered by Gov. Greg Abbott but already has the support of SWISD’s school board.
It’s also not the first time Toyota has received incentives from local governments at its Southside facility. Most recently, Toyota signed an agreement to build its new rear axle plant across the street from its current vehicle assembly factory.
East-west highway for the South Side
Part of the incentive package includes $20 million from the city to support a new eastern entrance and four-lane roadway connecting Toyota’s campus to U.S. Highway 281, roughly two miles away. There’s also $4.5 million designated for road improvements at the western entrances on Applewhite Road.
That compliments a broader vision for a parkway through the South Side, connecting communities in the area that primarily has north-south running arterials between Loops 410 and 1604. It will also help with traffic congestion around Toyota’s campus.
“That’s really important to help alleviate traffic on Zarzamora, which is near the western gate, and also the future plan that we’re going to build out that parkway,” said Councilman Edward Mungia (D4). “That’s a step in the right direction.”
A finished parkway linking the South Side is still decades away, Mungia said, but the highway spur linking Toyota to U.S. 281 is an important first step and could help residents around Toyota with easier highway access and reduced traffic from large trucks leaving and entering the facility.
This story first appeared in The San Antonio Report.