SANTA CRUZ — The Santa Cruz City Council approved a motion at its meeting Tuesday to provide local aeronautical company, Joby Aviation, with a forgivable loan of $500,000 to help establish an employment center and incentivize the company to remain in the city of Santa Cruz until 2038.
Joby Aviation, with its recently established headquarters in the Harvey West area of Santa Cruz and offices and facilities also in Marina and San Carlos, is currently developing electric air taxis for commercial passenger service, which it hopes to launch in 2025, and recently moved closer to that goal after completing another phase in the process to becoming certified by the Federal Aviation Administration.
“It’s going to have ridesharing networks, which is one of the things we are excited about in Santa Cruz, particularly with Highway 17,” said Santa Cruz Economic Development and Housing Director Bonnie Lipscomb at the meeting. “Joby also fits in with our community values of providing sustainable solutions to today’s challenges of congestion and climate change.”
According to the agenda report associated with the motion to approve the $500,000 loan to Joby, the funding would be provided to Joby on a reimbursement basis based on an annual survey of its job generation and employee retention. The agreement is meant to incentivize the hiring of 250 new, full-time employees in the city in total, which includes positions for technicians, engineers, machinists and managers, among others.
“That’s really the crux of what this agreement is about, is the creation of local jobs in our community,” said Lipscomb. “This incentivizes up to 250 jobs.”
The report points out that the loan is taken from the economic development trust fund and does not impact the city’s general fund, and that the loan funds “will be used for testing, manufacturing and safety equipment, including communications, safety, and other advanced specialized manufacturing equipment for the facility, such as CNC machines, lasers, and grinders.”
According to the report, the terms of the employment incentive loan include that it will be disbursed over no more than five years and with installment payments based on the annual employment survey. For each full-time employee that Joby hires, the city would loan the company $2,000. However, Joby cannot claim more than 100 new employees in a year, which means that the maximum loan amount awarded for a year is capped at $200,000.
After Joby provides the annual employment survey, and shows that it has eligible expenses, the loan is forgiven. If the aviation company sees a reduction in employment in the city for five years and not growth, or if it relocates its headquarters outside of the city before 2038, Joby will be obligated to reimburse the city for a percentage of loan funding on a prorated basis.
During the public comment period, Joby Aviation’s Head of State and Local Policy George Kivork called into the meeting to speak to the process of the loan agreement and the company’s commitment to the city.
“We have spent the last year making sure that the agreement and the private partnership that we enter here together would be for the public interest,” said Kivork. “We put a very long range timeline of us not going anywhere for the next 10 years to commit ourselves to Santa Cruz.”
The City Council approved the motion in a vote of 6-1 with Councilmember Sandy Brown voting no.
To read the loan agreement, visit cityofsantacruz.com.
