Norco Trying to Lure Nissan Out of Corona : Cities in Tug of War for New-Car Dealerships as Both Push Ahead With Plans for Auto Malls

Fighting to lure dealerships to their respective auto malls, the cities of Corona and Norco now are in a tug of war.

Corona Nissan, the highest volume new-car dealer in the area and an important source of income for Corona, now sits on Main Street.

But Norco officials want to lure it to Hamner Avenue--same thoroughfare, different name--the site of the new Norco Auto Mall, which they have touted as the antidote to a tax-starved future.

Norco makes no secret of the fact that it wants to lure the Nissan dealership up the street and into its sales-tax base. The city’s redevelopment agency has offered to subsidize the purchase of a site in the Norco Auto Mall, cutting the cost of land from $12 a square foot down to about $4, according to Corona officials.

It seemed that deal would leave Corona at the starting line because its auto center project has been held up by a lawsuit challenging the city’s redevelopment procedures and the environmental impact review for a 27-acre site on the west side of town.

‘Must Decided’

And the Nissan dealership, according to a report by Corona’s redevelopment staff, “has reached the point at which it must decide where to move,” because of pressure from its landlord.

Corona Nissan “has three choices,” the report said. “It can remain at its Main Street location, purchasing its present (leased) site and adjacent land. . . . It can move to the Corona Auto Center. . . . Or, it can relocate to the Norco Auto Mall, about a mile north of its current address.”

That third alternative would not only cost Corona at least $225,000 a year in current sales-tax revenue, but also deprive its auto center of a high-volume “anchor” that could increase the business for all its dealers, City Manager James Wheaton said.

“Corona Nissan is pretty important to Corona,” Wheaton conceded.

So the city offered to help Corona Nissan buy its present site now, if it will agree to move into the Corona Auto Center, off the Riverside Freeway at Serfas Club Drive, later.

Buy Main Street Site

Under the proposal, Corona’s Redevelopment Agency would buy the Main Street site, then sell it to the dealership, lending Corona Nissan the money to lower its effective cost from $12 per square foot to about $5--close to the price Norco is offering.

The loan would be “repaid” by the increases in sales-tax revenue over the next seven years. Corona Nissan would pay the balance after seven years, or when it moved to the auto center, where it would get a similar land-subsidy deal.

The City Council, acting as the city’s redevelopment board, gave the deal preliminary approval last week by setting a public hearing. Corona Nissan is expected to respond at that Dec. 29 hearing; its owner, Glenna Maguire, could not be reached for comment.

But Norco “is not conceding,” City Manager Ronald E. Cano said. “Our offer is still on the table. . . . We haven’t given up on that yet. It makes more sense for her (Maguire) to be with us.” And Norco is hoping to sew up deals next week, Cano said, that would put two more dealerships, Phillips Pontiac-Mazda of Corona and a new Mitsubishi dealer, alongside the Ford showroom it already has lured from Corona to its mall.

“We’re still going to prevail as the region’s premier auto center,” Cano predicted, with or without the Nissan dealer.

Some Question Plan

Some residents are questioning the realism of Cano’s plan to attract as many as 11 new-car dealers to Norco, which until now has had none. The completed auto mall would boost the city’s annual sales-tax income by $1.5 to $2 million, city officials estimated, helping to pay for expensive services in the rural-residential community.

“We got the best architects and the best hype,” Councilman Steve Nathan said in an interview earlier this year. “We touted the virtues of coming into Norco in the auto mall . . . (but) nobody’s signed up.”

Since then, construction has begun on the city’s first dealership, but progress on signing others has been disappointingly slow, he said.

The Norco City Council voted last week to remove a one-acre parcel, already developed with a Great Western realty office, from the auto mall project and to allow a restaurant to be built on another site that was reserved for an auto dealership.

“It is diluting the grand plan, but the plan was too ambitious,” Nathan said last week. “. . . It’s an indication that the scheme was overambitious.”

Marketable Size

Cano disagreed, saying the council’s action “doesn’t at all compromise the plan.” Removing the Great Western parcel from the auto mall reduces the adjacent dealership site to 4.6 acres, a more marketable size than its original 5.6 acres, Cano said.

The restaurant will be built at the north end of the auto mall, on “probably one of the last sites to go,” Cano said. The property owner, Bob Kennec, agreed to sell it to the city when it has a dealer lined up for the site.

The auto mall, Nathan said, “was touted as the way that property values were going to go up . . . but they (Hamner Avenue landowners) can’t sell their property except to auto dealers. And there aren’t that many auto dealers that are interested. . . .

“I don’t think the buildup is going to be as quick as everyone thinks. I think if we get three or four (dealers), we’ll have done good.”