Alhambra Agency Wins Court Approval of Plan to Buy Site for Auto Dealership

The Redevelopment Agency has won court approval of its plan to buy a site for a car dealership, ending controversy over an alternate proposal that would have uprooted a home for the blind, a church, a veterinary clinic and nine other businesses.

The action clears the way for the Barry Frey car dealership, one of the largest in the San Gabriel Valley, to move from Monterey Park to Alhambra next summer.

The agency will spend about $6.7 million to buy property for the dealership on the north side of Main Street, west of Raymond Avenue. The offices of Progressive Savings & Loan Assn., which now occupy part of the site, will be remodeled into an auto showroom. The Redevelopment Agency is arranging for the savings and loan to acquire a new office on the east side of Raymond Avenue.

City officials said they can now drop an alternative plan that would have put the car dealership on the south side of Main Street and would have displaced a row of businesses, a storefront church and about 40 residents of the Center for Living Independence for the Multi-Handicapped Blind.

City Atty. Leland Dolley said the agency needed court approval to buy the Progressive Savings property because three members of the City Council, which acts as the Redevelopment Agency board, own stock in the savings and loan. Los Angeles Superior Court Commissioner Herbert Klein last week approved the sale and set the price at $5.3 million. In addition to the Progressive Savings property, the agency will acquire a small adjoining piece of vacant land and two apartment buildings with 14 units, bringing the total estimated cost to $6.7 million.

The agency will resell the 3.5-acre site to the car dealer for $1,836,000, about $4.9 million below cost, city officials said.

The dealership, which sells new Pontiacs, GMC trucks and Subarus, is expected to generate more than $300,000 a year in sales tax revenue for the city, based on sales in excess of $30 million a year. That would make it Alhambra’s largest car dealer and the city’s second largest source of sales tax revenue, trailing the Price Club but ahead of Sears.

Michael Martin, deputy executive director of the Redevelopment Agency, said it will take 11 years for the city and the agency to derive enough revenue to offset the agency’s costs.

But Barry Frey, the owner of the dealership, formerly known as Superior Pontiac, said his business is doing so well that tax payments could offset costs in as little as seven years. He said he just signed an agreement to sell a fleet of 2,300 cars to a corporation in a deal that is worth $36 million. Most of the sales tax revenue from that transaction will go to Monterey Park, Frey said, but the scope of the deal suggests what Alhambra can expect in the future.

Frey said he hopes to move his car agency from Monterey Park to Alhambra by August or early September.

Although he will benefit from what amounts to a Redevelopment Agency subsidy on land acquisition, Frey said the agreement also requires a large commitment by him. “I’m taking a major gamble in the free enterprise system,” he said.

In luring another car dealer to Alhambra, the Redevelopment Agency has bolstered its Auto Row along Main Street, west of Atlantic Boulevard. Martin said Frey and two other new dealerships, for Acura and Chrysler automobiles, will give Alhambra 17 car dealers. Automobile sales provide 30% of the city’s sales tax revenue.

The Redevelopment Agency last week awarded a $2.1-million contract to Moulder Brothers, a Glendale construction company, for public improvements along Auto Row. The project will include repaving, replacement of street lights, landscaping and other work to enhance the appearance of the area.

The Redevelopment Agency’s success in obtaining the Progressive Savings site was greeted with relief by owners of businesses in the alternative site on the south side of Main Street.

“I’m glad things worked out the way they did,” said Dr. L. A. Frics, who runs a veterinary clinic that would have been displaced.

But Frics said he is still worried that his property could be taken later if the city needs a site for another car dealer.

“We are not out of the woods altogether,” he said, adding that he would like his land to be removed from the redevelopment area.

Martin said exclusion of property from the redevelopment project area would defeat the purpose of the redevelopment plan. While the agency no longer needs land on the south side of Main Street for Frey’s dealership, Martin said, it cannot promise to never seek the property for redevelopment.

The agency turned to the south side of Main Street for the Frey dealership in August after its original plan to acquire the Progressive Savings property encountered legal difficulties. Progressive Savings had sold the property to a group of investors but retained an option to buy it back, and there was a dispute over how proceeds from sale of the land would be split. To further complicate matters, two of the investors had died, tying up their interests in probate court. City officials said they began looking for an alternative site when it appeared that obtaining the Progressive property would be extremely difficult.

But the alternative raised a storm of protest from business owners at a hearing in September, and the agency returned to the Progressive site after the savings and loan and property owners resolved their differences and agreed to sell the property at a price to be set in court.

The price of $5.3 million established by Commissioner Klein includes land, buildings and other costs involved in relocating Progressive Savings. The commissioner set the amount after considering appraisal reports submitted by the city and the property owners. The city appraisal estimated the value at $4.6 million, while the property owners submitted a value of $6.2 million.