September 2, 2010

In November of 2007, Gulf States Toyota announced its selection of Temple as the site for a new multi-million dollar Toyota and Scion Vehicle Processing Center to be built in Temple’s Rail Park at Central Pointe with direct service from the Burlington Northern Santa Fe main rail yard. The Vehicle Processing Center will serve as a centralized location for receiving, accessorizing and distributing Toyota and Scion vehicles in the five-state Gulf States Toyota region, including Texas, Louisiana, Oklahoma, Arkansas and Mississippi. At the time, GST’s capacity at their current Houston Vehicle Processing Center was becoming constricted. An additional location in Central Texas fit into their business plan as they neared the capacity of physical space in the facility and also the capacity of rail in Houston to deliver more vehicles to that location.

Two years ago, the City of Temple and the Temple Economic Development Corporation (TEDC) entered into an Economic Development Agreement (EDA) with Gulf States Toyota (GST). In the 2008 EDA, the City committed to the construction of a number of infrastructure improvements in the Rail Park at Central Pointe and GST indicated its intent to build a vehicle processing center for Toyota and Scion Vehicles. The City and TEDC also conveyed a 300 acre tract to GST as an additional incentive for them to build the vehicle processing center.

Under the 2008 EDA, GST projected that they would commence construction of the vehicle processing center in Temple by July 2009 and complete construction by December 2011.

The City and Gulf States Toyota have recognized for some time now that the turmoil in the overall U.S. economy the past two years has dramatically and negatively impacted the sale of cars and trucks in the United States. Toyota sales have also been negatively impacted in the past twenty four months by several product recalls. The combined impact of these events has led to negotiations between the City and GST to allow GST some flexibility to delay construction and operation of their vehicle processing center. “As we continue to work through the challenges of this current economic environment we live in today, we continue to be excited about opportunities to grow the Toyota business in our region and having Temple play a key role in that growth,” Michael Owen, vice president vehicle processing for Gulf States Toyota, said.

At its regularly scheduled City Council meeting this evening, the City of Temple City Council adopted a resolution authorizing an amendment to the 2008 Economic Development Agreement. The amendment to the 2008 EDA provides for a three year extension of the projected times for GST to complete and begin operations of their vehicle processing center, while also giving them the option to further postpone construction and operation for up to two additional one year periods, or a total of up to five years.

GST recognizes that a delay in construction and the commencement of operations of a Toyota / Scion vehicle processing center impacts the City, and as part of the amendment, GST has agreed to compensate the City for that impact by making annual payments totaling $4.6 million in a three year installment period.

Should GST desire to exercise either or both additional one year extensions, they agree to pay the City an additional $2.25 million for each one year extension.

The amendment also allows GST to make some interim beneficial use of the 300 acre tract.

“From the first interactions with the City of Temple, they have proven to be a valued partner to GST and the work our collective groups put into addressing how the economy has impacted our collective plans is definite proof of that fact,” Owen said.

“Temple and Gulf States Toyota have faced challenges during these difficult economic times, but both of us have remained committed to seeing this great opportunity through to completion,” Mayor Bill Jones, III said. “I know that with such a commitment, the partnership cannot be anything but a huge success for GST and our community in the years to come.”

“We support GST and their efforts to stay on track with their plan to bring this facility and additional jobs to Temple,” Lee Peterson, president of the Temple Economic Development Corporation said. “While the economy has been especially tough on the auto industry, GST is an excellent company to work with and all the reasons they chose Temple in the first place are still valid. However, like many economic development deals, this is all a matter of timing and the TEDC stands ready to provide whatever support is needed when the climate is right to begin construction on the VPC.”

“I am very pleased that Gulf States Toyota remains committed to coming to Temple, and this amended agreement truly demonstrates the level of that commitment,” states Blackburn. “I want to thank Gulf States Toyota for what they have done, and for what they will do. They are going to be a great addition to this community.”

About Temple:
Temple, Texas is a community with a diverse economic base that includes healthcare, distribution and warehousing, and manufacturing as the foundation. Within 180 miles of a population of 17.8 million, Temple is in a strategic location that is central within the southwest U.S. marketplace.