Alhambra Auto Row Plan Begins to Worry Small Firms
The Fosselmans have been making and selling ice cream on Main Street since 1940, and the Jay Dee Cafe, across the street, has been serving beer and hamburgers since 1944.
They are firmly established as small businesses, but on city redevelopment maps, Fosselman’s Ice Cream Co. appears as the future home of Bob Wondries Ford, and the cafe is designated for expansion by the neighboring Century Motor Sales.
Both are among 75 to 100 buildings and homes the Alhambra Redevelopment Agency is considering acquiring to create an Alhambra Auto Row on Main Street, from Raymond Avenue east to Atlantic Boulevard.
Project at Early Stage
The project is at an early stage, with costs to the city agency and auto dealers still unknown. Neither dealers nor city councilmen, who also serve as directors of the Redevelopment Agency, have committed themselves to the project, and it would take three years to complete the Auto Row, but those who might be displaced are already worried.
“I feel threatened,” said Jim Fosselman, 63, one of three brothers who run an ice cream business their father founded. Fosselman, two others and the county all filed suit to block the project on grounds that Main Street is not blighted and, therefore, is ineligible for redevelopment. Los Angeles Superior Court Judge Lester Olson ruled in the city’s favor last year, and the county dropped the case, but Fosselman and the other taxpayers are appealing.
Michael Napolitano, deputy director of the Alhambra Redevelopment Agency, said the city is willing to help auto dealers expand, even at the cost of moving other businesses, because the dealers generate so much revenue for the city.
Somewhat of a Landmark
Frank Lima, 36, manager of the Jay Dee Cafe, a cocktail lounge and restaurant that his father and a partner opened more than 40 years ago, said it hurts him to see the city willing to push the cafe aside even though it has become somewhat of an Alhambra landmark. He said he doesn’t want to move, but “if we do move, we want equal to what we have now.” He said “equal” in this case might be difficult to achieve because the property includes ample parking--space for 60 cars--and income-producing rental units.
But both Lima and Fosselman said that, despite their misgivings, they are willing to listen to the Redevelopment Agency’s offers. Redevelopment law requires the agency to pay fair market value for property and relocation expenses of businesses and other tenants.
Napolitano said the redevelopment agency is free to acquire property despite the pending lawsuit.
40% of Sales Taxes
Alhambra’s 14 car dealers sold more than 11,000 new and 3,000 used cars last year, according to a study made for the Redevelopment Agency by Economics Research Associates. In 1983, the last year for which full financial figures were available, the study said, auto-related businesses produced $1.35 million in sales tax revenue for the city--40% of Alhambra’s sales tax total.
City officials estimate that an expanded Auto Row--from the current 12 acres to 25--would produce $500,000 to $750,000 in additional revenue.
Napolitano said Alhambra car dealers are doing so well that they need room to expand. And they produce so much revenue that other cities would like to lure them away, he said, increasing the pressure on Alhambra to offer the dealers financial assistance.
Already Concentrated
Nine of Alhambra’s 14 dealers are already concentrated in the seven-block area of Main Street between Raymond Avenue and Atlantic Boulevard. Plans for the Alhambra Auto Row would permit these dealerships to expand, would move dealerships from Atlantic Boulevard and Valley Boulevard to Main Street and would provide space for two or three additional dealers.
Napolitano said about a fourth of the 75 to 100 pieces of property being appraised for acquisition are residences, mostly homes on side streets at the rear of existing dealerships.
Dealers who need property for expansion have considered buying it themselves.
‘Don’t Want to Sell’
“People don’t want to sell,” said Lee Welinsky, vice president of Century Motor Sales. “And they’re asking all sorts of prices.”
Some property owners are talking about $15 to $20 a square foot as a fair selling price. Dealers are quoting $4 to $8 a square foot as the price they can afford.
The redevelopment agency would have to absorb the difference between what it pays for property and what it gets by reselling it to dealers. Napolitano said that while financial figures are still being developed, he expects the agency to spend about $8 million, including tenant relocation expenses.
No Ready Cash
One hitch in the project is that the R e development Agency does not have a ready source of cash to finance property acquisition.
City Manager Kevin Murphy has suggested that the dealers may have to finance their expansion themselves, with the agency compensating dealers over a period of years for the agency’s share of costs. Dealer reaction to the idea has been mixed.
The Redevelopment Agency currently is netting only $250,000 a year in property tax revenue from the redevelopment area, though this amount could increase greatly with new construction. Murphy said the county owes the agency $750,000, which could be used to improve the appearance of Main Street if dealers accept the Auto Row terms.
Boost in Sales Uncertain
Another uncertainty in the project is whether the auto row can boost car sales.
The Economics Research Associates study points to the success of auto centers in other cities, particularly Irvine and Cerritos. The study says auto sales rose in Cerritos from $18 million in 1980, the year before its auto center opened, to $144 million in 1983. During the same period, Irvine auto sales went from $61 million to $136 million, but Alhambra’s sales rose much more slowly, from $98 million to $135 million.
Jim Marino, who runs Mercedes-Benz and Mitsubishi dealerships on Main Street, said clustering dealerships works well because customers like to do comparison shopping. A continuous string of dealers would enable customers to walk from one dealership to another.
Dealers Are Cramped
Marino said the sales growth of his dealerships depends on being able to acquire more land. “You have to be able to service what you sell,” he said, pointing out that many dealers are cramped both for service facilities and car storage space. Marino said he may have to move if he cannot enlarge his dealerships.
“I’ll stay here if I get the room,” he said. If not, “I’ll move to Monterey Park.”
Monterey Park’s redevelopment agency is planning a 15-acre auto center along the Pomona Freeway as part of a 45-acre commercial project at the Operating Industries landfill. The project depends on the city working out agreements with regulatory agencies to move 158,000 cubic yards of refuse off the site.
Some Dealers From 1920s
Bob Wondries, who owns Toyota and Ford dealerships here, said most Alhambra dealers are so entrenched that he would be surprised if any moved out of the city. Some dealerships date back to the 1920s.
After the redevelopment agency presents financial figures that will show the dealers how much they would have to pay to participate in the Auto Row project, Wondries said, dealers will look at the bottom line and decide whether expansion is worth the money. If it isn’t, he predicted, most dealers will accept the status quo.
Economics Research Associates interviewed all 14 dealers in Alhambra for its study and found that those hoping to participate in the Auto Row project expect the improvements to boost sales significantly. The dealers see new car sales rising from about 11,750 this year to 17,000 by 1990. However, the Economics Research Associates study concludes that the dealers are overly optimistic and says 14,760 would be a more realistic target for new car sales in 1990.
3 Dealers Would Move
Besides enabling existing dealers to expand, the redevelopment project contemplates the relocation of three dealerships, based on requests by the dealers.
Bob Wondries Ford, now on Atlantic Boulevard, would move to the south side of Main Street, at Marengo Avenue. Alhambra Dodge, which now occupies lots on both sides of Main Street, would move all operations to the south side of the street and expand to the entire block, between Electric and Marguerita avenues. Alhambra Motors Inc., a Honda dealer now located on Valley Boulevard, would take over Alhambra Dodge’s facilities on the north side of the street and expand.
The redevelopment agency is negotiating with Chrysler Realty Corp. to establish a Chrysler-Plymouth dealership on two acres to be acquired at Atlantic Boulevard and Main Street. The agency would use $1.37 million in federal funds to help with the project. City officials say these federal funds can be used to establish new businesses but not to expand existing businesses.
One Dealer Would Double
Century Motor Sales, which has BMW and Maserati franchises and is negotiating an agreement to handle Hyundai, a car to be imported from South Korea, is planning the largest expansion project among existing dealers--doubling in size.
The redevelopment agency also is looking at ways to help two auto dealers a mile from Auto Row at the east end of Main Street. Both dealers, Bewley Allen Cadillac and Alhambra Datsun, say they need additional land.
Napolitano said the city should have financial figures by next month to help dealers and city officials decide whether the Auto Row project is feasible. If the figures are favorable, he said, the agency could begin assembling land in January and the project could be completed in three years.
