San Antonio City Council voted unanimously Thursday to award a performance-based incentive worth $562,500 to a startup seeking to design and sell electric vehicles.

DeLorean Motor Company, a new venture seeking to revive the iconic 1980s sports coupe as an electric car, will receive $1,250 per job upon meeting set benchmarks for creating 450 jobs by 2026. Council members and local leaders touted the structure — the first of its kind — as a risk-free investment to encourage economic mobility and boost the city’s growing status as a hub for automotive manufacturing.

Councilwoman Adriana Rocha Garcia (D4) said the incentive approved by City Council was shaped in part by past economic incentive programs that didn’t deliver for the city. “This performance contract is a way to show folks that we are working on the future of incentives.”

Rather than give DeLorean incentive payments first and wait for the company to create jobs, the incentive is to be paid out as the company meets job creation benchmarks over a 10-year period. The city will give DeLorean $1,250 per job after it creates 150 jobs. The remaining incentive money would pay out at 300 and 450 jobs.

DeLorean CEO Joost de Vries, speaking before the council, said the decision to locate in San Antonio was not based on money.

“Other states offered a lot more zeroes than you do,” he said. “What you offer is people. What you offer to us is the willingness to say yes. What you offered — as an organization, as a group — was making us feel welcome and say, ‘We might not have it, but we have a way to get there.’”

De Vries said Rocha Garcia and economic development representatives from Greater:SATX and Port San Antonio showed the company a “vision for what this area will be.”

The San Antonio area has in recent years emerged as a growing hub for automotive manufacturing. Last month Navistar opened its new truck factory on the city’s far South Side, joining Toyota, Caterpillar, Aisin Corp.’s AW Texas and a myriad of other automotive suppliers.

DeLorean comes as the latest automotive company to enter the region, though it does so without the established history of those other giants, and without their financial heft.

Business details about the company, including its finances and size, have not been disclosed. De Vries’ résumé includes a six-year executive position at a luxury electric car producer, Karma Automotive, as well as a two-year executive position at Tesla. He took the helm of the DeLorean venture in December.

DeLorean has no connection to the original DeLorean Motor Company, which went bankrupt and closed in 1985, the same year the car gained cultural prominence in the movie Back to the Future. The brand was bought in 1995 by Stephen Wynne, a mechanic in a Houston-area town who is now an investor in the startup.

The new company announced plans in February to locate its corporate headquarters in San Antonio, where it would seek to revive the iconic brand as a new line of electric cars. It has told city leaders it plans to create engineering jobs here and to invest $18.5 million into its San Antonio facilities at Port San Antonio. The cars, however, will be manufactured elsewhere.

The job creation incentive is contingent on DeLorean paying an average annual salary of at least $145,600, with a minimum salary of $50,000. The agreement would commit the company to creating a set number of engineering internships and to participating in the city’s workforce development program, SA Ready to Work.         

Councilman John Courage (D9) cited the structure as the reason for his support despite some skepticism about the venture’s prospects.

Councilman Clayton Perry (D10) also voiced concerns about potential risks — referencing his unease over the city’s forgiveness of Petco after it failed to meet some incentive targets — but was assuaged by staff assurances that clawback provisions are in place, even if the business later fails.

The city anticipates the company’s entrance to San Antonio to bring in $2.7 million in revenue from property and sales taxes, according to staff estimates. Subtracting the cost of city services and the incentives leaves a net benefit of $507,280 to city coffers.

Proponents said this estimate doesn’t take into account indirect financial gains to the city — like tax revenue from the private purchases of employees or the possibility that the company will attract others to follow it.

“I wish you could put a dollar value on what this is going to mean to the community,” said Phyllis Viagran (D3), referring to the southwest part of the city. “We are investing in a community that was long not invested in,” she continued, “these are opportunities for an area that was long redlined by the city.”

Waylon Cunningham

Waylon Cunningham writes about business and technology. Contact him at waylon@sareport.org.