Signal Hill Plans Enclosed Auto Mall to Lure Dealers
Car buyers will be able to shop for wheels, have lunch, get their hair cut and purchase seat covers--all in one spot--under a plan to build the country’s first all-enclosed auto mall in Signal Hill.
Officials of the small oil city are forging ahead with plans to begin building by January, 1989, a five-level car-shopping mall, which would feature a promenade with restaurants, a beauty salon, a convenience store, an auto supply shop and possibly a dry cleaner.
Meanwhile, neighboring Long Beach is quickly moving to catch up and build its own, more traditional, auto center.
Committed $100,000 to Study
Last November, the Long Beach City Council committed $100,000 to study the feasibility of forming a redevelopment area for an auto center. At the time, six dealers agreed that they would not talk with any other agency about possible moves.
That agreement will expire May 10, leaving the local dealers free to negotiate with Signal Hill. But dealers said Long Beach officials have asked them to extend the agreement.
Two of the six dealers who signed the agreement said in interviews last week that they are ready to sign another agreement. Three others who had signed expressed optimism about the Long Beach proposal but were noncommittal on whether they will sign a second exclusive contract. Two other Long Beach dealers who did not sign the agreement said they are negotiating with Signal Hill exclusively.
In the end, the two cities may have auto malls less than half a mile apart, representatives from both municipalities say. But whether both cities can garner the millions of dollars in sales taxes they envision, dealers say, depends on a number of variables, including which city completes its project first and whether Signal Hill’s enclosed concept will work.
So far, there is no dispute between city representatives that tiny Signal Hill, a 2.2-square-mile city, is ahead of neighboring Long Beach, which has 50.22 square miles.
Signal Hill has acquired most of the 18 acres it will use around Cherry Avenue and Spring Street through long-term leases or outright purchase, said Robert J. Cristiano, a general partner in the Newport Beach-based Auto Center Group that is developing the project. The city is in escrow for the remaining land, he said. City officials also have tested the soil, hired a contractor to clean the contaminated areas and ordered demolition of buildings on the site, Cristiano said. Drawings of the mall are complete and a model is displayed in a City Hall conference room.
Long Beach, Cristiano said, has “tremendous hurdles to overcome.”
Testing the Land
Officials in Long Beach said they are testing the land for their development to determine how much of the approximately 80 acres is contaminated and what it would cost to clean it.
About half of the land belongs to the city and the other half has various owners, said Roger C. Anderman, Long Beach community development director. The Long Beach mall would generally be bounded by the San Diego Freeway, Willow Street, Walnut Avenue and California Avenue and would be home to about 10 dealerships.
Anderman and City Manager James Hankla declined to release details about the Long Beach project, saying a recommendation will be forwarded to the City Council and the Redevelopment Agency within the next 30 days.
“We wish Signal Hill well with its project. We intend to proceed with our project,” Hankla said.
“Eventually, there will be a mall in Signal Hill and one in Long Beach,” said Hankla, who conceded that “they’re a little bit more advanced than we are.”
Signal Hill officials say they are more than just a little bit ahead.
“We’re probably about a year ahead,” said Ceil Cirillo, city of Signal Hill project manager.
For the string of dealers now operating along Long Beach Boulevard, moving is imperative. The dealers complain of deteriorating neighborhoods that surround them, increasing crime and what they said is the final blow to their businesses: the Los Angeles-to-Long Beach light-rail line being built on the boulevard. They see a mall that brings dealerships together in an attractive setting, much like the successful Cerritos Auto Square, as the solution to their plight.
To Long Beach, keeping the dealers is just as crucial. If the businesses leave the city, they will take with them an estimated $2.8 million in sales taxes, according to a city task force on retail and auto sales. With an auto center of 10 dealerships, the city could expect about $8.4 million in sales taxes a year, the task force reported.
To Signal Hill, a city that relies heavily on sales taxes, getting an auto mall is just as important. Cirillo estimated that the auto mall with a nearby truck center would bring in $2.5 to $3 million annually.
This is not the first auto-mall proposal Signal Hill officials have put together. Originally, they planned a conventional outdoor center in a much larger area. Three years ago, the city even had tentative agreements with six Long Beach dealers.
But officials discovered that some of the land was so badly contaminated with hazardous waste that to clean a one-quarter-acre parcel would cost about $7 million, according to Cristiano. “That dirty spot was an integral part of nine acres,” he explained.
Because the necessary land for a traditional outdoor center was not available, Signal Hill moved ahead with a plan for a multilevel indoor mall.
The Signal Hill plan calls for a $50-million, five-floor mall with 10 new-car dealerships in octagonal-shaped front offices on the ground floor, service facilities underground, storage of new cars on two floors and employee parking on the roof, Cristiano said. Entrance to the mall will be off Cherry Avenue and 29th Street, and the used-car lots will be outside the enclosed mall, Cirillo said.
Inside the mall, customers would be able to walk down a 1,000-foot promenade and stop in at the various dealerships, auto supply stores, a couple of restaurants, a barber shop, beauty salon and possibly other stores, Cristiano said. The mall would employ 600 to 1,000 employees, he said.
If built as planned, the enclosed mall will be the first of its kind in the country, said Cristiano, a partner in the Auto Center Group, which he said has done about 80% of the outdoor auto malls in the state. (California, he added, has most of the auto malls in the country.)
Allan Wilbur, a spokesman for the National Automobile Dealers Assn. in Virginia, said he knew of no mall in the country like the one proposed in Signal Hill. Vanness Auto Plaza in San Francisco, which is owned by one dealer but has four franchises, is the closest to the concept, Wilbur said.
Reaction to the concept of an enclosed mall ranges from curious to optimistic to critical.
“An enclosed mall would be very beneficial where you have poor weather” but not in Southern California, where people are used to being outdoors, said Dan Niedringhaus, owner of Long Beach Honda Cars.
Niedringhaus also said customers would not want to get their hair cut by an unknown stylist nor would they need a restaurant next to a dealership when there are eateries nearby. Niedringhaus is negotiating exclusively with Long Beach.
Other dealers disagreed, noting that an enclosed mall offers better security and more amenities to customers.
“Especially, a woman would enjoy the idea of being able to walk in, go through a safe (promenade) . . . stop and have a glass of wine and lunch if they want to, or have their hair fixed or a manicure done (while) they’re having their car fixed,” said Bob Autrey, who owns BMW and Mazda dealerships in Long Beach. Autrey has been negotiating with Signal Hill.
Van Palmer, owner of Palmer Import Motors in Long Beach, is also negotiating with Signal Hill. He said of that city’s plan: “I’ve looked it over pretty carefully and I think it’s just stunning. It’s innovative.”
Brad A. Willingham, vice president of Boulevard Automotive Group, said the Signal Hill project “definitely has some possibilities and more than likely will be the way to go for dealerships in the future.” Willingham’s group, which owns Boulevard Buick, Lincoln-Mercury, British Saab and GMC trucks, has been negotiating with Long Beach. He called the Signal Hill concept “pretty exciting.”
The dealers noted that a multilevel mall needs less space and thus saves on the cost of land. The Signal Hill project calls for using 18 acres, but when totaling the square footage of all five levels, it amounts to about 35 acres of building, Cirillo explained.
Long Beach is proposing a more conventional outdoor center within blocks of where Signal Hill plans its project. Anderman said he expects ground breaking on the Long Beach project in nine to 12 months.
Cristiano, however, referring to the six dealers who signed the six-month agreement not to talk to other agencies about possible moves, said several of those dealers have been talking with Signal Hill because “the dealers can’t take the risk if Long Beach fails.” He would not name the dealerships.
Of the six, Niedringhaus--the Honda dealer--and Gary Cooper--owner of Long Beach Nissan--said they plan to sign an extension to their original six-month commitment to Long Beach.
Willingham said he did not know what his father, James Willingham, who owns the dealerships, plans to do. “I don’t think anything has been signed at this point.” But he noted that the time factor “is getting to be very important . . . the sooner, the better.”
Bob Davis, general manager of Glenn Thomas Dodge, said that he preferred not to comment until after May 10 but that what will happen “depends on what Long Beach offers us. . . . We’re going to stand by our word and that was to give them six months. When the six months end, then we’ll judge where we are at.”
Lars Eriksson, co-owner of Jim Gray Volvo, said that he did not know whether he will sign another agreement with Long Beach but that his first choice is to stay in the city: “I think that if Long Beach can deliver, they’ll get the dealers.”
“They’ve got to put (together) the numbers for us, and that’s what they’re in the process of doing,” said Eriksson, who called an April 22 gathering of the six dealers and Long Beach city staff members “a very upbeat meeting.”
Mike Salta, owner of Salta Pontiac, AMC Jeep & Renault and Salta Mitsubishi, is the sixth dealer who has an agreement with Long Beach. He could not be reached for comment.
If both cities build auto malls, they will have to compete for the dealers. Some people believe that there are enough to go around. Others disagree.
“Business creates business,” said Cooper of the Nissan dealership. He said that if Signal Hill and Long Beach do build their malls so close together, they should both benefit by attracting each other’s customers.
Niedringhaus, of the Honda dealership, disagreed, saying that if the six dealers who have the agreement with Long Beach stick with the city, there will be hardly anyone left to go to Signal Hill. He pointed out that there is a California law that aims to keep dealers of the same make from locating within 10 miles of each other. Cristiano, who is putting together the Signal Hill project, said there are other dealerships available, including many new franchises not currently in the area.