Electric Car Maker Switching to L.A.

0
Electric Car Maker Switching to L.A.
An electric sedan by Coda. The company is leaving Santa Monica for L.A.

Coda Automotive Inc., the Santa Monica-based company gearing up to launch its first electric car later this year, plans to move its headquarters to Los Angeles, bringing 126 jobs immediately with the promise of up to 600 more within 10 years.

But it will cost taxpayers. The Los Angeles City Council last week approved an $832,000 incentive package to assist Coda in moving to a vacant building in the Mid-City neighborhood, near where Fairfax Avenue meets the Santa Monica (10) Freeway. An additional $600,000 could follow next year.

Coda, which has two facilities in Santa Monica, is still in the final stages of lease negotiations with the family trust that owns the vacant building, so a final decision to move to the site had not been made as of late last week. Also, details of a contract between Coda and the city spelling out how exactly the money must be spent have yet to be finalized.

“We are looking forward to quickly crossing the finish line with the final city contract so that we can remain on track with bringing Coda’s products to market this year,” said Phil Murtaugh, chief executive of Coda Holdings.

Coda Vice President of Government Relations Forrest Beanum said the rapidly expanding company is “bursting at the seams” at its two Santa Monica locations – a design and testing facility at 1601 Wilshire Blvd. and the headquarters building at 820 Broadway – and wants to consolidate operations.

The company looked at locations in Santa Monica, Los Angeles and cities in the South Bay before deciding to start negotiations on the Mid-City site. Beanum noted that finding space large enough within Santa Monica was difficult, especially since the company needs to add staff quickly as the launch date for its electric sedan nears.

The company, which was founded in Santa Monica five years ago, would like to retain a presence there.

“Santa Monica has been very good to us and it’s a great market for electric vehicles,” he said.

L.A. talks

If Coda moves its headquarters to Los Angeles, it would be the seventh major headquarters relocation into the city within the last year.

Santa Monica architectural firm Gensler, Vernon-based Lucky Brand Jeans and Monrovia telecom company Telscape Communications Inc. all moved their headquarters to downtown Los Angeles.

Calabasas software company Blackline Systems Inc. moved to Warner Center and Beverly Hills BMW moved from Beverly Hills to the Miracle Mile section of Wilshire Boulevard. Also, Chinese auto maker BYD established its North American corporate headquarters in Los Angeles.

Those companies also received assistance packages from the city, including tax holidays and Department of Water & Power discounts. The city tailored additional subsidies on a case-per-case basis.

Coda has been in discussions with L.A. officials for more than a year about moving into the city. Last year, the company was considering setting up an assembly plant in the city before deciding last fall to go with a site in Benecia, about 30 miles from the Port of Oakland, at least in the short term. The company has also been considering setting up a battery plant in Columbus, Ohio.

But even after the Benecia decision was made, Coda continued discussions with members of Mayor Antonio Villaraigosa’s business team, this time for a site for its headquarters. Besides the Mid-City building, Coda also considered a site in the downtown L.A. area.

The Mid-City location offered a major advantage: It’s close enough to the facilities in Santa Monica that the commute for most employees would not change significantly.

The building, on the east side of Fairfax just north of the freeway, needs substantial work to accommodate Coda’s operations and the parking lots also need upgrades.

Andrew Westall, chief deputy for Councilman Herb Wesson, whose district covers the site, said the city is putting together a $1.4 million incentive package for infrastructure improvements on and around the site, including the $832,000 that the council approved last week, which was the first phase. Coda could also be eligible for state hiring tax credits because the site is in an enterprise zone. However, those incentives may not come through because Gov. Jerry Brown plans to scale back or eliminate enterprise zones.

The city money, which comes from the general fund, would be used to upgrade the building’s electrical connections, and make other interior and exterior improvements. The landlord would also contribute money for tenant improvements.

Westall said Wesson plans to introduce another motion next year for $600,000 in additional money that would be used to improve the parking lots and make some curb repairs in the area.

Coda also gets the city’s “off-the-shelf” incentives that are available to any company moving to Los Angeles. They include a five-year discount on DWP rates of an average of 25 percent and a three-year business tax holiday.

If the lease negotiations are successfully concluded and details of the contract with the city are ironed out, Beanum said renovation work on the building could begin around July 1, with the move-in date slated later in the summer.

The company plans to hire up to 600 additional people for its new headquarters over the next five to 10 years. Beanum said the staff would handle the company’s three product lines: the electric car sedan, an electric propulsion system that could be sold to other vehicle manufacturers and a battery storage system for industrial use.

The compact electric sedan is slated to go on display next month at a showroom at the Westfield Century City mall. The list price was last reported at $44,900, not including any federal or state incentives for purchasing electric vehicles. With those incentives, the price would drop to about $32,000.

Beanum said the Coda sedan will go on sale late this year, most likely in December, and that the company will accept advance deposits as early as next month.

The Coda electric sedan will compete against the all-electric Nissan Leaf, which sells for a list price of about $35,000 before incentives, and the plug-in hybrid Chevrolet Volt goes for about $40,000. The Coda sedan will have a larger battery with more range than the Leaf and it will be able to seat five compared with four for the Leaf and Volt.

Competition for electric cars expected to heat up next year as Ford Motor Co. and Honda Motor Co. Ltd. are expected to offer their all-electric models for sale in the United States.

The lithium-ion batteries and the chassis for Coda’s electric sedan are being manufactured at plants in China; the cars are being assembled at the Benecia site.

In January, Coda hired Murtaugh. He had spent more than 30 years in various management positions at General Motors Corp., including as chief executive for GM China. He succeeded Kevin Czinger, a former venture capitalist and investment banker who guided the company through its research and development phase.

Previous article The Week’s Big Movers
Next article Macerich Acquires Stake in Two General Growth Malls
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

No posts to display