Pomona Car Dealer Asks City for Private Loan of $750,000

Uncle Sam bailed out Chrysler. But will Pomona’s city fathers do the same for the local Ford dealer?

If Pomona redevelopment official Douglas Dunlap has his way, the city will float a $750,000 loan to car dealer Will Nix, whose dealership generates $255,000 a year in sales tax income for the city.

“The car business,” Dunlap said, “hasn’t been terrific in recent months.”

But Mayor Donna Smith is “uneasy” about the proposed deal, which apparently would be an unprecedented loan for the city.

“The city isn’t in the private loan business,” she said.

Nix, who heads the city’s largest car dealership, Will Nix Ford, asked for the loan to pay off debts and to buy out the interest of his father, Will (Bill) Nix.

The dealer’s collateral includes a 1986 Lamborghini that Nix says is worth $200,000, his stock in the dealership and his house in Upland.

If Nix does not get the loan, Dunlap said, he might get a better offer from another city and move his dealership, and Pomona would lose those sales taxes.

But Smith is unconvinced, saying that if the city agrees to the loan, it ought to require more collateral.

The stock would be worthless if the dealership went out of business, she noted. She also questioned how much equity Nix has in his house. San Bernardino County records show that the home is assessed at $459,000, but the loan agreement said it has a $337,000 mortgage.

And the mayor said she has no idea if the 1986 Lamborghini Countach 5000S offered by Nix is worth the $200,000 he claims. Cars of Particular Interest, a publication catering to the specialty automobile market, said the model goes for between $155,000 and $200,000.

If Pomona ends up with the car, it would hardly make an appropriate addition to the city fleet, Smith said.

“I think we should put it in the lobby of City Hall and let everyone see how their tax money was spent,” she said.

Councilman C. L. (Clay) Bryant, who frequently clashes with Smith, scoffed at her skepticism. “Sure, it’s a good deal,” Bryant said. “He’s the biggest auto dealer in the city.”

Bryant said other cities would offer millions of dollars to lure such a valuable producer of city revenue.

The proposed loan would carry an interest rate of 7% for the first two years, with the interest refundable if the loan were repaid in full within that time. Otherwise, the loan could be extended to five years at a rate of 12% or more. If the dealership were to leave Pomona in the next 10 years, it would have to pay the city a $2.5-million penalty in addition to paying off the loan.

Nix, a political supporter of Bryant, strongly criticized Smith in a newspaper ad a year ago. But the mayor said her stand on the loan has nothing to do with Nix’s criticism.