Nexolon looking at San Antonio …

October 18, 2012

Nexolon, a Korean maker of solar-panel parts, is in advanced talks to build a manufacturing plant at Brooks City-Base, even as it vets a second location, according to people familiar with the negotiations.

The company is part of the consortium that won a landmark contract earlier this year to supply city-owned CPS Energy with 400 megawatts of solar energy. OCI Solar Power, a U.S. subsidiary of South Korea-based OCI, heads up the group.

Signed in July, the 25-year purchase agreement with CPS calls for Nexolon to move its U.S. headquarters to San Antonio and build a $100 million parts plant here.

Nexolon is expected to locate its manufacturing operation, which will employ more than 400 workers, on the city’s South Side because of the ready availability of land.

While Brooks City-Base — a decommissioned Air Force base — is a prime candidate, Nexolon has scouted other locations in South Bexar County. That includes property near Toyota’s truck plant that the company is said to be currently sizing up.

“They’re looking at a couple of sites, and Brooks City-Base is one of them,” says Councilwoman Elisa Chan, chair of the City Council’s Economic and Community Development Committee.

“I understand Brooks has put together a pretty attractive package. But I don’t think (Nexolon) has made a decision,” Chan adds.

The company apparently has driven a hard bargain with Brooks Development Authority (BDA), which manages Brooks City-Base on the Southeast Side. Indeed, talks came to an impasse earlier this month, observers familiar with the negotiations say, and appeared to be on the verge of collapse.

“Nexolon has been asking for this and this and this,” says one City Hall insider, who asked not to be identified because he is not authorized to discuss the negotiations. “Brooks has gone the extra mile, and now Brooks has said that’s enough.”

The deal-making, he adds, is back on track. But the outcome is anything but certain.

“I thought this was supposed to be resolved by now, but they’re obviously still talking,” Chan says. “So this negotiation must be tough.”

Nexolon officials did not respond to interview requests.

Negotiating terms

Among the concessions Nexolon is said to have won: A reduced lease rate on 70 acres and the BDA’s commitment to spend as much as $10 million to extend to the site drainage infrastructure and roads — durable enough to accommodate heavy truck traffic.

BDA Chairman Manuel Pelaez-Prada acknowledged that negotiations are ongoing, but declined to say how close the two sides are to an agreement.

“Brooks has always been chasing projects like this,” he says. “And the prospect of having Nexolon at Brooks is very exciting. Both sides are engaged in serious discussions.”

Brooks City-Base’s competition is a location near the intersection of Applewhite and Watson roads, close to Toyota’s manufacturing facility. Known as South Port, the 522-acre site was formerly owned by HollyHills Development, a now-bankrupt developer based in California.

Nexolon presumably is conducting due diligence on only a portion of the site.

Big prize

For BDA, landing the facility would be a welcome win. The authority has been working to redevelop the 1,200-acre campus since 2002, when the City of San Antonio assumed control of the property.

Brooks City-Base started as a collaboration between the city and the Air Force. The authority — whose board of directors is appointed by the City Council — is now looking to recast it as a science, technology and renewable energy hub.

While BDA has spent millions on infrastructure, including $8.7 million for improvements in fiscal year 2011, it’s collected few economic development plums. Its biggest project to date is Mission Trail Baptist Hospital, which opened in 2011.

Brooks is also home to the city’s emergency dispatch center and the City-Base Landing retail development. Also, locally based NuStar Energy, Texas A&M University–San Antonio and the Spine and Pain Center of San Antonio lease space from BDA.

Plans under discussion for Nexolon call for the manufacturer to build its plant on 35 acres in the first phase, with another 35 acres available for phase two.

It’s not clear how quickly Nexolon has to have its operation up and running under the agreement with the utility. CPS spokeswoman Lisa Lewis declined to provide the timeline laid out for Nexolon in the contract with CPS.

Bexar County Economic Development Director David Marquez says the company has asked the County to consider incentives for the project, and Chan says the city is considering a $400,000 grant to the parts maker.

Overall, the OCI Solar Power consortium is expected to bring about 800 jobs to San Antonio, including Nexolon’s 400-plus positions, and make an annual economic impact of $700 million. In July, OCI Solar Power said it would deliver the first 50 megawatts under the purchase agreement “around mid-2013.”