Tesla moves forward with plans to occupy nearly 1M square feet in Kyle — here's what we know

shells of cars in Tesla's general assembly department at Giga Texas, its major manufacturing plant in eastern Travis County.
Feb 15, 2024
Justin Sayer, Austin Business Journal

Tesla Inc.'s plans to lease nearly 1 million square feet in Kyle sent ripples through the regional economy when it was announced last year, even though specific details of what the Austin-based electric vehicle maker had in store were not available at the time.

Recent filings with both the city and state — plus job listings on the company's website — begin to bring those plans into focus.

Kyle Mayor Travis Mitchell revealed last year that Tesla was expected to lease three buildings at the Kyle/35 Logistics Park, about 20 miles south of downtown Austin, for warehousing and light assembly.

It now appears that Tesla has done just that. Tesla is tied to the roughly 350,000-square-foot Building 3 at the site for "an office/warehouse with light manufacturing within an existing shell building," according to a Feb. 8 filing with the Texas Department of Licensing and Regulation. That $600,000 project is scheduled to start at the end of this month and wrap up in April.

A representative of CoStar Group, which tracks real estate data throughout the country, confirmed that Tesla leased Building 3 at the site, along with Buildings 2 and 5. That would add up to roughly 962,000 square feet of space, correlating with Mitchell's announcement last year.

Also, the company recently filed a slew of documents with both the state and the city of Kyle under the codename "Project Tiger," which the Austin Business Journal has confirmed is tied to Tesla's project at the business park. The use of the code name underscores the lengths that Tesla goes to hide its business activities around the metro. Musk's company has a reputation for being pretty tight-lipped — it even disbanded its media relations department in 2020.

While code names are typically used to mask a company while negotiating incentives from a city or county, Kyle officials have said in the past that Tesla is not seeking incentives for this project.

The scope of Project Tiger includes a slew of improvements to the logistics park building, including its lighting, HVAC system and water heater, according to documents filed with the city of Kyle. Almost 340,000 square feet of space is portioned for warehouse use, while the remaining 7,000 square feet is slated for offices and other purposes. The documents also note that the "total occupant load" for the space is estimated to be 718, including 35 in the offices and 682 in the warehouse, although its unclear if that refers to the number of employees expected there.

The Elon Musk-led company has also listed a couple Kyle-based job openings on its website, which suggest both manufacturing and supply chain operations will take place in the city. The openings are for an incoming quality supervisor for cell manufacturing, an incoming quality technician for "cell battery" and a supervisor of supply quality engineering, and they state that both production and quality control will happen in Kyle.

The facility would presumably support Tesla's gigafactory in eastern Travis County, which already has more than 20,000 employees — a figure that could triple in the coming years.

Houston-based Alliance Industrial Co. is developing the site, which includes five buildings and in the past was framed as a $115 million capital investment that could create roughly 1,500 jobs. Sources have previously told the ABJ that Tesla might eventually take up the entirety of the 1.4 million-square-foot park.

Representatives of both Tesla and Alliance did not immediately respond to requests for comment. A representative of Jones Lang LaSalle Inc., which is handling leasing for the site, declined to comment.

Other companies listed in project documents include Houston-based Seeberger Architecture, Donna-based VME Engineering LLC, Houston-based EFX Industrial and Houston-based HTX Engineering LLC.

EV giant is getting even bigger

Tesla's footprint continues to expand across Central Texas and the state as a whole. Its headquarters is based at its massive gigafactory in eastern Travis County about 35 miles from Kyle, and it is already the region's second-largest employer.

Tesla produces its Model Y SUVs and the futuristic Cybertruck at the Austin factory that spans more than 10 million square feet of floor space.

But Tesla doesn't just build cars at the Austin factory. It also manufactures driving units, battery packs and its own 4680 cells for its batteries. Tesla makes its own castings as well, and its factory includes plastic injection molding, stamping press lines, general assembly, a body shop and paint shop as part of the company's goal to become more vertically integrated.

Tesla also has filed plans to build a "Project Cathode" facility next to the main factory. And, near Corpus Christi, Tesla broke ground last year on a lithium refining plant. That doesn't include the roughly 36,000 square feet Tesla has in Hutto, northeast of Austin, for purposes that haven't been made public, and the 440,000 square feet of warehouse space in San Antonio. The company also utilizes the auto ramp at the RCR Taylor Logistics Park in Taylor to ship its vehicles.

The company's footprint doesn't include the suppliers that are flocking to the region to be close to it. This month, the ABJ reported on two big projects in Georgetown that may have connections to Tesla: US Farathane Corp. and Hanwha Advanced Materials LLC.

Kyle itself has landed Simwon North America Corp., an automotive body manufacturer that's reportedly a Tesla supplier; Plastikon Industries Inc., a plastic parts manufacturer that supplies Tesla and Toyota Motor Corp.; and XCharge North America, a manufacturer of electric vehicle charging equipment that has conformed to the standards of Tesla charging equipment.

With whatever Musk has up his sleeve, Tesla is poised to become a major employer in Kyle. The city's largest private-sector employers currently include Ascension Seton, FedEx Corp., Lowe's Companies Inc. and Amazon.com Inc., the latter three of which operate fulfillment and distribution sites there.

Mitchell, who revealed Tesla's plans to lease space during his 2023 State of the City address, said at the time that Tesla's presence will help "provide credibility to the city of Kyle as a potential location for employment."

"Any time a major employer and a top-tier company shows interest in your community, it's almost always a good thing," he said. "It's one of our core pursuits. The cultivation of employment centers and primary jobs in the city is an important goal that we have."

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