• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

S.J. Weighs Plan to Keep Car Dealers: LOTS RELOCATING HURTS SAN JOSE COFFERS

Posted on: Tuesday, 13 June 2006, 09:00 CDT

By Matt Nauman, San Jose Mercury News, Calif.

Jun. 13--San Jose's City Council will be asked today to approve a $135,000 plan to study how the city could help its new-car dealers handle the pressure of rising land values.

It's an acknowledgment that the city's 32 auto dealers bring in a lot of tax revenue -- more than $11 million in 2005 -- and that some of them have left San Jose or soon might.

Porsche of Stevens Creek moved from San Jose to Santa Clara in February. Piercey Toyota-Scion intends to relocate from North First Street in San Jose to Milpitas in 2007.

"We haven't in the past really focused on our auto dealerships, which we need to do given how much they contribute to the city," said City Councilman Ken Yeager, who supports the plan.

The proposal calls for spending $135,000 to hire an urban designer to improve the look of the 12-dealership Stevens Creek Boulevard auto row in San Jose, as well as a financial analyst for ideas on how to pay for those improvements; creating a committee that includes auto dealers to develop a plan for the area; and, perhaps, stopping home building along a stretch of Stevens Creek Boulevard for a year.

Neighborhoods and car dealers often have conflicts: over traffic, the loading and unloading of car carriers, the volume of dealership loudspeakers and the brightness of lot lights.

Even so, a six-page memo, signed by three of the city's department directors, details the goal to "make clear to the dealerships that San Jose appreciates their business."

New-car dealers account for about 10 percent of the city's annual sales tax revenue, said Nanci Klein, manager of corporate outreach in San Jose's economic development office.

Piercey Toyota-Scion, the last auto dealership on North First Street, is moving because it needs more space.

"It's a done deal," Art Wicker, Piercey's president, said Monday.

Piercey didn't own the land beneath its First Street store. In Milpitas, it will own its building and lease the land from Santa Clara County.

Construction to begin

The ground-breaking for the new showroom, at the intersection of Interstate 880 and Great Mall Parkway near Elmwood Correctional Facility, takes place next month, Wicker said. The new store will open in 10 to 12 months, he said.

Wicker said he was disappointed with efforts to keep his dealership in San Jose. "The city of San Jose just has no sympathy for car dealers," Wicker said. He said he encountered repeated hassles in dealing with San Jose officials and said his plans for the dealership were approved in three months in Milpitas.

Klein said her office worked to find a new site for Piercey but couldn't find a location that met Wicker's requirements.

Nearby Los Gatos has lost three dealerships recently. Auto malls within close proximity, including Fremont and Gilroy, continue to grow.

"There's tremendous pressure for automobile dealerships," Yeager said.

Under the proposed plan, a city team would meet with each of the city's dealers twice a year, starting in July. A working group that includes city staffers, dealers and representatives from the city of Santa Clara would form to begin a review of land-use and operational issues. Another group, which would include area residents and representatives from other local businesses, would review the plan offered by the first group.

If the plan is approved, the city would hire an urban designer who would help enhance the "brand identity" of the Stevens Creek auto row. Klein said the city would look for someone who has worked with car dealers before to examine such issues as signage, trees, medians and sidewalks.

The Capitol Expressway Auto Mall has a more cohesive look. On Stevens Creek, where hundreds of other businesses -- from fast-food restaurants to florists and a blues bar -- fill space between dealerships, it's more of a hodgepodge.

"We want to support the dealers to create their own vision for the look and feel of Stevens Creek," Klein said.

The financial analyst would look at ways to pay for those improvements to the area, including the possibility of creating a Mello Roos district, which would raise money by taxing property owners in the area, or redirecting some sales tax revenue back to the area.

The memo also suggests the city might impose a moratorium on non-auto uses on parts of Stevens Creek Boulevard. But Klein said that's unlikely, at least for now.

No specific housing projects near the Stevens Creek dealers are in the works, said Joseph Horwedel, the city's acting planning director, but the city has had informal talks about residential development with some land owners.

There's increasing pressure to turn commercial land into housing projects, said Horwedel and Klein, as property costs continue to grow.

Visions of condos

Offers of $2 million to $4 million an acre have prompted thoughts of condominiums, apartments and homes, and potential requests for zoning changes along Stevens Creek from commercial to residential, according to the memo. Dealers also are facing increasing rents, the memo said.

Dealers were happy to hear about the city's plans.

"I'm pleased the city is finding out that the franchised new-car dealers are footing the bill from the tax side of it," said Steve Smith, president of the Silicon Valley Auto Dealers Association.

Shaun Del Grande, who owns Mazda dealerships both on Stevens Creek and at the Capitol Expressway Auto Mall, applauded the city's efforts.

"It's a very positive move for San Jose," he said. "It's very timely with the state of the business. It's tough out there."

Contact Matt Nauman at mnauman@mercurynews.com or (408) 920-5701.

-----

Copyright (c) 2006, San Jose Mercury News, Calif.

Distributed by Knight Ridder/Tribune Business News.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

Bombay:523792,

Source: San Jose Mercury News

More News in this Category