The City Council voted Thursday to grant Toyota an economic development incentive package valued at over $16.5 million after a similar move by county leaders earlier in the week.

On Friday morning, the company announced it would follow through with its $531 million plant expansion, adding an estimated 400 jobs, as city officials continue to wrestle with how to plan for future development in the area surrounding the $4 billion Southside facility.

Toyota’s plan for capital improvements at the 2 million-square-foot factory came to light in May through documents prepared for Bexar County commissioners after the company made its request for support earlier that month.

The company plans to add a 500,000-square-foot facility to the plant, according to city documents, and bring what is currently a third-party source under its roof in order to broaden the automaker’s capabilities and give the company more control over its manufacturing operations.

On Tuesday, county commissioners approved an economic development incentive package for Toyota that includes a 10-year, 100% abatement of county ad valorem taxes on qualified real and personal property. The abatements provide an estimated $14 million in tax relief to the company.

Because the abatement does not extend to other taxing entities, the project will for instance bring in an estimated $1 million for the road and flood fund and $14 million for University Health over 10 years.

The county’s package also provides a skills development grant of up to $250,000.

“This potential investment and job growth demonstrates our steadfast commitment to job stability, long-term employment and reinvesting our profits into North America’s market and the success of our operational communities,” said Susann Kuzanas, president of Toyota Motor Manufacturing Texas (TMMTX).

“Bexar County’s commitment to manufacturing, particularly around workforce development and infrastructure, lays the foundation for our success, as demonstrated today,” she said.

City incentives

The city’s incentive package includes a 10-year agreement with a 65% abatement of real and personal ad valorem taxes and a Chapter 380 Economic Development Grant Agreement of $1 million for project-related infrastructure and site work.

It also provides city and San Antonio Water System fee waivers totaling $800,000.

The agreement calls for Toyota to invest $531,720,000 in its plant and create 411 jobs by the end of 2028. The jobs must pay all new, full-time employees at the site an hourly wage of at least $20.54.

Along with the incentive package, Council members approved a resolution nominating TMMTX to be designated a qualified business under the state’s Texas Enterprise Zone (TEZ) program. The program is intended to spur job creation and capital investment in economically distressed areas.

A “Double Jumbo” TEZ designation, if approved by the governor’s office, would make TMMTX eligible for state sales and use tax refunds on qualified expenditures. The estimated value of the incentive is over $2 million.

Industrial zone

Open since 2006, the plant produces Toyota’s Tundra and Sequoia truck models, employing more than 3,800 people. Another 5,600 workers are employed by Toyota’s 20 on-site suppliers.

At a May 21 meeting of the San Antonio Zoning Commission, commissioners delayed voting on a request to add an industrial overlay zone to almost 20,000 acres of land surrounding the 2,678-acre Toyota plant.

Though a city spokesman said the zoning change and Toyota’s potential plant expansion are unrelated, the rezoning would have restricted development in the area for the sake of public safety concerns, according to city staff.

The Industrial Compatibility Overlay District (ICOD), similar to overlays that buffer military installations and the airport, would be the first of its kind in San Antonio.

After the ICOD proposal raised the ire of residents living in the Texas A&M-San Antonio Area Regional Center, who were concerned they could be affected by the rezoning, commissioners asked for city staff to host a public input session, which is now scheduled for July 2.

But during a presentation to the Planning Commission on June 12, Planning Department Assistant Director Rudy Niño proposed that the city “consider” an industrial overlay. The plan, revised following the zoning hearing, also suggests downsizing the transition area between the heavy industrial-zoned area and residential areas from a 3-mile radius of the Toyota plant to 2 miles.

The proposed new regional plan also downplayed mentions of Toyota, reducing language in the plan that names the company directly in favor of describing the separation of areas for heavy industrial use and residential development.

Niño said the proposal would not affect existing landowners and their properties because it is a future land use map, “so that down the road we don’t have a situation where folks are living right next door to heavy industrial.”

But John Whitsett, a zoning commissioner appointed by District 10, has told his colleagues and others in City Hall that the proposed overlay reflects “undue influence” by Toyota on thousands of acres of land and is an effort by the city to comply with the controversial 2002 Starbright Agreement.

Toyota did not formally participate in developing the plan, Niño said, but, as a stakeholder in the area, has been consulted throughout the planning process, including the most recent revised proposal.

“Their input was they thought that they were comfortable with that, and they said as long as there are some transitional [land] uses, that we’re not going to have a big subdivision hugging our property line, then we would have no concerns,” Niño said.

As with the earlier zoning hearing, planning commissioners ultimately voted to postpone the agenda item until its next hearing, which is scheduled for June 26. City Council has the final say on all zoning and planning requests.