THERE are still a few Milpitans who can recall the heady days about 55 years ago when Ford was getting ready to roll its assembly line here in a freshly-minted city of Milpitas. That same kind of excitement must have charged up San Jose's officials as they savored the news that Tesla Motors, the electric carmaker, has been landed.

The auto startup will be given a generous lease (no rent for the first 10 years) for 90 acres of buffer land belonging to the San Jose-Santa Clara Water Treatment Plant just a whisker from the Milpitas border. The sewage plant serves those cities as well as Milpitas, and several West Valley communities that have bought capacity in it.

In a week that saw some of the most astonishingly bad economic news in many years, this was a rare upbeat moment. San Jose's Mayor Chuck Reed praised his economic development team and could well have reflected some of the glory onto the state government, which will own the first $100 million of equipment, lease it to Tesla and in effect waive about $8 million in sales tax. Governor Schwarzenegger, despite his multiple Humvees, seems very bullish on Tesla and said it ought to be built in the innovative high-tech Silicon Valley rather than in Albuquerque, N.M. which is just a wanna-be Silicon Valley. Vacaville was a California runner-up.

The U.S. Department of Energy came through with a $150 million loan guarantee to top off a $100 million the company hopes to raise in a next round of venture capital

By and large it would appear that the taxpayers at all three levels have been quite generous to the fledgling maker of cars that are targeted currently to the rarified $100,000 per vehicle club. But for the masses, the company says by the end of 2010 it should be ready to offer a four-door sedan in the $50,000 to $60,000 range. It hopes to sell 20,000 of that model and its batteries should run for about 230 miles before there's a need for another electric charge.

The $250 million auto plant and headquarters will require an estimated 400 factory workers and an even larger staff might be required in the business offices and the white collar design and technical end of the business.

The San Carlos company's chairman, Elon Musk (a co-founder of PayPal) knows the value of sticking close to where lots of brainpower and executive talent calls home, even though the new blue collar force might find our local home prices a lot higher than Vacaville. It's quite likely Toyota's New United Motors Manufacturing Inc. plant in Fremont, having trained thousands of workers over the years in high quality auto assembly, will prove a plus as well.

If Tesla proves successful, San Jose and Santa Clara will one day get some impressive tax benefits. The entire South Bay region will benefit from its positive effect as a general economic stimulus and Tesla could also generate some specialized suppliers who would occupy some of those vacant Milpitas industrial buildings not far from the Zanker Road site which abuts the Milpitas city limits along Coyote Creek.

With San Jose sprawled all over the valley floor and some of its hills, there will undoubtedly be a need to pin-point the plant's location more precisely. Should it be called the Tesla Plant at Alviso? Not really upscale enough to match the target audience. Maybe the San Jose Tesla Plant at Milpitas might have a nice ring to it.

Oldtimers might recall that the early official name of our local Ford assembly plant, now the site of GreatMall, was "The San Jose Ford Plant at Milpitas." San Jose got that consolation prize for refusing to spend any money to extend utilities in order to get the auto giant to build within its city limits even before there was a city of Milpitas.

Times have changed.