Tesla Sued Over New Mexico Model S Factory That Never Was

August 13, 2012 12:00 AM

Tesla Sued Over New Mexico Model S Factory That Never Was
" Tesla Motors’ decision to purchase the former NUMMI automotive manufacturing facility in Fremont, California might have been one of its shrewdest business decisions to date.

Not only did Tesla Motors obtain a pre-built facility — complete with the essential machinery it needed to build its 2012 Model S Sedan — at the heavily-discounted fire-sale price of $59 million, but it helped offer skilled jobs to those who had previously been made redundant when the factory closed under General Motors’ bankruptcy.

But now a developer in New Mexico, where Tesla had originally planned to build a factory, is suing the electric automaker for picking California over New Mexico.

According to Gigaom, the claimant in the case, Rio Real Estate Investment Opportunities, filed a law suit back in May against Tesla for fraud, breach of contract, negligent misrepresentation and negotiating in bad faith.

The developer claims it entered into a binding development agreement with Tesla in February 2007 to build a new factory in New Mexico that Tesla would then lease from it for $1.35 million a year for ten years, plus a 2 percent annual increase "

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