Holdouts on Boulevard Look to Signal Hill : Auto Row Dealers Plan L. B. Exodus

James Willingham remembers well the heyday of Auto Row in Long Beach. Dozens of car dealerships lined a 20-block stretch of Long Beach Boulevard. Customers flocked to the area, eager to snap up a new Buick or Ford.

It’s different today. The neighborhoods surrounding the boulevard have deteriorated since the 1950s. Most of the dealers have fled. For the half dozen that remain, the high crime rate and other problems in the area have hurt business.

“It’s a problem,” said Willingham, who has owned a boulevard dealership since 1954. “We’re flying, we’re just not flying as high as we should be.”

That may change soon. Discouraged by the situation, Willingham and a handful of other Long Beach auto dealers are completing plans to uproot their businesses and move to nearby Signal Hill.

On Tuesday, the Signal Hill City Council will consider authorizing the city’s Redevelopment Agency to begin buying land as part of a $24-million deal to develop an auto mall adjacent to the San Diego Freeway.

General Understanding

After 15 months of tedious negotiations, the city and the auto dealers earlier this month reached an understanding that outlines the general terms of the deal.

A more complex development agreement should be hammered out by the end of March, but ratification of the document by the council will have to wait until an environmental review of the project is completed, probably by June, 1986.

In Long Beach, the rush of the car dealers to speed out of town has city officials understandably disappointed, but they maintain the exodus will have only a marginal effect on the city’s hefty budget.

The harshest critics of the auto mall are in Signal Hill itself, where owners of businesses that would be displaced fear financial ruin.

Plans call for a 26-acre auto mall bounded by Cherry and Junipero avenues and Spring and 28th streets. Four dealers have agreed to move to the mall and four other area dealers are still considering joining. If more than four dealers take part in the project, the city will consider buying additional land.

Dealerships to Move

The dealers that plan to move are Willingham, owner of Boulevard Buick, Lincoln-Mercury, British Saab and GMC Trucks; Long Beach Honda Car; Robert Autrey, owner of a C. Bob Autrey Mazda and Long Beach BMW; and Mike Salta, who owns M. F. Salta AMC, Mitsubishi and Pontiac. Each of the dealerships except Long Beach BMW is on Long Beach Boulevard.

Officials have refused to reveal who the other four dealers are or where they do business until negotiations are complete.

Signal Hill officials predict the city will pay about $24 million to buy land for the mall, finance relocation of the existing businesses and fund improvements such as street paving and lighting. The dealers would in turn pay about $10.5 million, spread over seven years, for the land, city officials said.

If all goes according to plan, the dealers will be happily settled in Signal Hill by the middle of 1987.

That’s none too soon, Signal Hill leaders say. They are eager to attract the auto dealers to help boost the city’s sagging sales tax revenues, which have slumped with the decline of the oil industry.

Signal Hill’s Lifeblood

For decades, oil has been the lifeblood of Signal Hill. But as reserves of crude have dwindled in recent years, municipal leaders have begun to look for ways to diversify the city’s economic base by attracting new businesses.

“The city could be faced with an economic crisis in about 10 years if something isn’t done,” Councilman Gerard Goedhart said. “We’re a growing city with more demands for service, but our economic situation is decreasing. We have the responsibility to ensure the city’s financial future and that’s what we’re doing.”

Officials say the auto mall could eventually pour about $2 million a year in sales taxes and business-license fees into city coffers. That would be quite a boon to Signal Hill. In recent years, about $3 million of the city’s $8-million budget has come from sales taxes.

The majority of the businesses that would be displaced are service firms that are not subject to sales taxes, said Louis Shepard, Signal Hill city manager. The city collects about $100,000 a year in sales taxes from the two dozen businesses in the area, Shepard said.

There are obstacles, however. Chief among them is opposition to the project from the owners of land the city covets for the auto mall.

“I don’t think it’s the American way to allow them to come in and take someone’s property,” said Velma Robinett, property manager of 20 acres being eyed by city officials. “I don’t think that an auto mall is the best business in the world. There’s already too many of them around. And I have successful businesses on my property right now.”

Oil-Related Industries

Many of the businesses scheduled to be moved to make way for the auto mall are oil-related industries leasing land from people like Robinett. Owners of those firms worry that they will be forced out of the Long Beach-Signal Hill area or will have to pay much higher rents in a new location.

Edgar Wellbaum, president of Republic Drilling Co., said he pays 2 cents a square foot for property he leases in Signal Hill. But if the firm is forced to move, Wellbaum said, he will probably have to pay about 7 cents a square foot for land to store drilling pipe and machinery.

“We’re already strapped as it is,” Wellbaum said. “But this could be the straw that breaks the camel’s back.”

Shepard said the city is eager to help businessmen like Wellbaum. City officials want the business to stay in Signal Hill and will help in relocation and the funding of building projects at a new site, Shepard said. But only so much can be done.

“Maybe the reality is we’re not going to be able to accommodate him if he expects to find another 2-cent lease,” Shepard said. “But we’re going to do the best we can in that kind of situation.”

Shepard said the auto mall would help to improve the community’s appearance by replacing the blighted stretch of rickety buildings and unsightly lots now occupying the site.

“That’s the front window to the city of Signal Hill,” he said. “But the people who live here cannot take pride in that.”

Wellbaum complained, however, that it is an “atrocious misdirection of power” for the city to “move out tenants of long standing” in order to increase sales tax revenue from the property.

“They seem to have made up their mind what they want to do and are working frantically to it,” he said.

City officials in Long Beach, meanwhile, say they are upset to see the auto dealers moving to Signal Hill.

“Obviously we’re disappointed to see any business leave, but we’re not willing to subsidize them to the extent they want,” Mayor Ernie Kell said.

During the past decade, the city has worked with the dealers on several occasions to put together an auto mall project adjacent to San Diego Freeway or along Long Beach Boulevard, but each of the attempts failed. The city also spent about $600,000 this year to plant trees and provide street improvements along Long Beach Boulevard in hopes of improving the appearance of Auto Row.

“There’s not much we could do,” Kell said. “They want a lot of land and cheap rent. It just doesn’t pencil out.”

Kell acknowledged that the boulevard would be hurt if the auto dealers leave, but stressed that other businesses would “come in to fill that void.”

May Be ‘a Better Boulevard’

“It might end up being a better boulevard,” he said, noting that everything from small storefront businesses to high-rises could be built.

The economic effect, while important, would not prove devastating, officials said. “We never like to lose tax revenue,” said Roger Anderman, city redevelopment director. “But Long Beach has a broad enough tax base that it wouldn’t have a significant impact on the city.”

For the auto dealers, the move to Signal Hill would be nothing short of an economic bonanza.

Willingham, for example, expects that within three years he could double his volume from the 3,500 cars and trucks he sold in 1984. Dan Niedringhaus, co-owner of Long Beach Honda Car, predicted his business could eventually triple with the move to Signal Hill.

“We would expect our volume to jump significantly,” Niedringhaus said, noting how the dealership is strapped for space on a 1 1/2-acre lot.

To Signal Hill leaders like Goedhart, the coming of the auto mall is a signal that the city is moving forward.

“It’s a matter of change,” he said. “Signal Hill has changed a lot through the years and it must continue to change. Eventually we won’t have the oil. We have an opportunity now and we have to take it.”