Tesla’s lease in August of a warehouse on the East Side is the latest indication of the growing influence of the world’s richest man in San Antonio.
The five-year-lease is for a 440,000-square-foot warehouse, confirmed CoStar Group, a real estate intelligence firm. It will house manufacturing parts for the newly built Tesla “gigafactory” in Austin, according to the San Antonio Business Journal.
“People have talked for so long about the hypothetical downstream effects the gigafactory would have for San Antonio,” said Daniel Khalil, senior analyst at CoStar Group, whose data revealed the investment. “Now it’s real.”
It was the largest industrial lease signed in San Antonio in 2022 by far, said Khalil.
Tesla is one of several companies owned by Elon Musk, often said to be the world’s richest man, with a net worth estimated by Forbes at more than $200 billion. His move to Austin in 2020 has coincided with a growing expansion of his firms in the region.
The Tesla plant in Austin, which began initial production in April, will ultimately cost more than $10 billion and will be the highest-volume U.S. auto plant when it reaches full speed, Musk has said.
The warehouse isn’t Tesla’s only presence in San Antonio.
The electric car company earlier this year filed an application with the Texas Department of Licensing and Regulation for a more than 50,000 square foot Tesla “gallery” and service center near the San Antonio International Airport — so-called because Tesla cannot sell cars directly to consumers in Texas, as state law limits vehicle sales to franchised dealerships.
Instead, “product specialists” at Tesla galleries educate potential owners and offer test drives, while mechanics service Teslas. This is Tesla’s second San Antonio-area gallery and service center; the other is located on I-10 near the Dominion.
Other Musk companies are seeking to enter San Antonio.
The Boring Company has been in talks with the Alamo Regional Mobility Authority (RMA) since March to build an underground tunnel that would connect the airport with downtown. The Boring Company recently upped its proposed investment in the tunnel, whose ultimate price tag the company has estimated as up to $290 million, to be paid for entirely by the company.
Its only project completed to date is the Las Vegas Loop, a 1.7-mile system that circles the city’s convention center.
Local leaders have been mixed on the project. The RMA believes it could be a possible source of revenue, something the agency needs since the San Antonio area lacks the toll roads that fund regional mobility authorities in other parts of Texas. Currently, a majority of the RMA’s revenue comes from local vehicle registrations.
The Boring Company claims it could bring up to $25 million per year in revenue to the RMA, if it was used by a tenth of the airport’s traffic. That money could be crucial, some local officials say.
“It will assist with growth congestion,” Renee Green, Bexar County’s director of public works, told the RMA board of directors in May. Green told the board that the RMA is $20 billion short on money needed to build out transportation to address congestion.
Others, like Mayor Ron Nirenberg, are less convinced. “What I have seen after exploring the Boring Tunnel concept doesn’t suit any of the priorities we’re trying to achieve in transportation,” Nirenberg said in a statement provided by his office.
Concerns have also been raised about how the project would affect the city’s water supply. Texas cave associations have warned it would undoubtedly impact endangered species that call the caves underneath San Antonio home.
While it’s unclear whether the airport to downtown tunnel will ever be built, Musk took to Twitter back in August — before he bought the social media platform — to tease the possibility of one day building much longer tunnel — one connecting Austin to San Antonio.
Now Musk owns Twitter. Mayra Flores, the Republican candidate for Texas’ 34th Congressional District, used the platform Tuesday to urge Musk to move that company’s headquarters to Texas.
Others had a more specific suggestion: the 1.2 million square foot, soon-to-be-vacated Rackspace headquarters.
