Duarte Acts to Block Car Dealerships’ Move
City officials have hired an attorney to block a proposed sale and move to Monrovia of two auto dealerships that shut down this year.
Until recently, Duarte officials have not been involved in a legal dispute involving Duarte Nissan Inc., which in March shut down its Nissan, Isuzu and Suzuki dealerships in the 210 Freeway Autoplex after filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Last month, a federal judge ordered Duarte Nissan to liquidate its assets under Chapter 7 bankruptcy and turn the cash over to Tokai Credit Corp., its major creditor. Tokai claims that Duarte Nissan owes it $11 million and has defaulted on payments.
City Manager Jesse Duff said Duarte is entering the legal battle because the company’s court-appointed trustee, David Haberbush, has received an offer from a Monrovia dealer, Sierra Autocars, to buy the Nissan and Isuzu franchises and move them to a spot now occupied by the Lincoln Mercury dealership in Monrovia’s portion of the 210 Freeway Autoplex.
He has not received any offers for the Suzuki franchise.
Haberbush said he would prefer to find a buyer who will stay in Duarte but so far has not received such an offer.
Duff said the relocation would violate agreements signed in 1985 by Robert J. Low, owner of Duarte Nissan, when he paid the city’s Redevelopment Agency about $1.25 million for land for the businesses. The agreements require Low to keep the three dealerships on the property for five years or until they have generated $2.5 million in sales tax revenue.
“Those (conditions) haven’t been met yet,” Duff said Wednesday. “They are substantially short of what they committed to generate before they change the use of the site, at least $1.5 million short.”
The businesses were among Duarte’s largest sales tax producers, generating $300,000 of the city’s $1.65 million in sales tax revenue last year.
Low could not be reached for comment. His son, Bruce Low, who was vice president of Duarte Nissan until the trustee was appointed, said his father is not bound to the terms of the agreement because Duarte has failed to find dealers to fill three vacant spots in Autoplex.
Three franchises--Ford, Acura and Infiniti--have pulled out of plans to move to Duarte, and the City Council is negotiating with an Orange County developer to build a retail center there.
“I’m not so sure we have that obligation (to keep the franchises in Duarte) in light of the change” in land use, Bruce Low said.