South Gate OKs Discount Car Lot Despite Protests
A one-stop auto supermarket offering hundreds of new and late-model cars for sale to members of credit unions has been approved by the City Council, despite objections by some mobile home park residents and business people.
Last week the council approved the agreement with M & E Autoland Properties Inc. of Los Angeles to develop the auto mart on 7.14-acres of vacant city land near the Long Beach Freeway. Autoland’s president is Michael Malamut and his partner is automobile dealer Pete Ellis.
Under the agreement, the city is granting Autoland a $1.5-million loan to develop the lot into an open park-like area with shade trees, seating areas, security lighting and a small office. There will be a paved area for the cars and a parking lot for customers.
Malamut said sales will be conducted only on one Saturday each month plus two other days during the year between the hours of 9 a.m. and 6 p.m. About 1,250 new cars will be on the lot. He said Autoland may open by May.
Malamut said he has been conducting such sales since 1971, but this is the first time he will have a permanent location. Malamut said other locations, such as the Hollywood Bowl, were temporary.
His company buys all makes and models from dealerships at fleet prices. The cars are then sold to credit union members at discount prices because there is no middleman, Malamut said. Customers have their financing approved by their credit unions before they come to the lot.
Malamut said he sets the prices of the cars and there is no bargaining.
Under the agreement with the city, Autoland is required to lease the land for one year with an option to buy. While Autoland is required to pay $500,000 in yearly rents, the firm can earn credits toward the purchase of the land if $12 million in sales taxes is generated over a 15-year period. The city will give the property to Autoland if the $12-million figure is reached within 15 years, city officials said.
The officials said the development is a good deal because it will boost the city’s sales tax income and help pay for city services.
But not everyone is happy with the agreement.
Some residents of the adjoining 20-acre Thunderbird Villa Mobile Home Park have protested since the city started discussing the project more than a year ago. They said the lot will create too much noise, traffic congestion and security problems for the residents, the majority of whom are senior citizens. There are about 400 residents in the mobile home park.
They have been joined in their protest by some businessmen in the heavily industrialized area. The group is circulating a petition to overturn the council’s action. They are receiving support from Councilmen Robert Philipp and Gregory Slaughter, who opposed the project. Philipp and Gregory said the city is taking the financial risk while Ellis, who has Pete Ellis Dodge in South Gate, and Malamut are putting very little money into the project.
Richard Pennington, a park resident and one of the protest leaders, said: “We have got to try and make them rescind this ruling. The noise level will be unbelieveable. Emergency vehicles would not be able to get into the area to attend to handicapped and elderly people because of the congestion.”
Philipp said if the group is able to gather the signatures of 10% of the registered voters within a 30-day period, the council can be asked to rescind its action or place the matter on the ballot. Philipp said the group hopes to turn in the signatures before the council takes a final vote, which is expected Jan. 8.
“It is unfortunate such a controversy has developed. While most communities are fighting to get car dealerships to gain sales taxes, our council has become split,” said Councilman William H. DeWitt, who voted with the majority for the agreement.
Mayor Herbert Cranton and Councilman Del Snavely also voted for the project.
Cranton said: “I’m sympathetic with the residents of the Villa. I have friends at the Villa, but this decision was made to benefit the entire city.”
However, Philipp said he believes “M & E is getting a sweetheart deal. It has absolutely no dollars invested in this.”
But DeWitt and other supporters said the benefits to the city far outweigh the risk.
“Sure there’s some risk. We’re making the loan. But this is a win-win situation. The city will gain with the increase in sales taxes,” DeWitt said.
“If the business goes belly up, the land returns to the city and we can find other uses for it,” he said.
Cranton said the sale taxes could be used for city services, including the hiring of additional police officers for the 91-officer department. Voters turned down a proposition last month to provide more money for police.
Malamut said he does not believe his company is getting something for nothing.
“If we don’t perform, we don’t get the land,” he said.
While Autoland is proposing to conduct sales only on Saturdays, critics said the traffic congestion will be unbearable because the automobiles will be brought in over a two-day period, Thursdays and Fridays, on large trucks, and those that are not sold will be taken away on Sundays and Mondays.
“This will be devastating to this area. The place is already congested because many of the businesses are open six days, some seven days, a week,” said Richard Fiola , president of E & F Forklift Co.
Fiola and other business people have joined the Villa residents in circulating the petition against Autoland.
City officials say they are proposing a number of measures to reduce increased traffic problems, including placing traffic control flagmen at the street entrance of the mobile home park. The flagmen would be placed at the underpass on Frontage Road East, which is the only entrance into both the mobile home park and the Autoland site.
Autoland will also provide private security during and after sales, city officials said.
