Duarte Ends Up With Lemon in Autoplex
This end of the 210 Freeway Autoplex is running out of gas.
Three franchises have shut down after filing for bankruptcy, three others have abandoned plans to move to the auto row, and the opening of a two-dealership franchise has been indefinitely postponed.
Adding insult to Duarte’s injury, its civic neighbor in the Autoplex continues to thrive. Eight Autoplex franchises in Monrovia generated $600,000 in sales-tax revenue last year, two more are on the way, and the city expects to recoup the $12 million it spent on the auto mall in less than 10 years.
But on the eastern half of the two-city, 47-acre complex, only two franchises are up and running--Mitsubishi and Toyota. Duarte officials--who had hoped to reap $2 million to $3 million in tax revenues from the Autoplex each year--have witnessed one automotive setback after another:
* The bankruptcy and closure in March of the financially strapped Nissan, Suzuki and Isuzu dealerships.
* A bid to move two of those dealerships--Nissan and Isuzu--to Monrovia.
* A city dispute with a Monrovia dealer over Volkswagen and Subaru franchises that were to have opened in 1988.
* Dealers’ cancellations of plans to open three franchises on a 13-acre lot in the auto strip.
Duarte has a huge stake in the sprawling Autoplex along the Foothill Freeway. When city planners in 1987 first envisioned a nine-dealer auto row, the Duarte Redevelopment Agency went to great lengths to make the project possible.
The agency spent more than $15 million to put the project together. Using powers of eminent domain, it bought land along the Foothill Freeway and sold it to auto dealers at bargain prices.
It also took over the old Northview Middle School site for the project, and built a new middle school, administration building and auditorium down the street. Duarte had hoped to recoup the costs from hefty tax revenue from auto sales and increased property values brought on by the development.
Those expectations gradually dwindled this year as dealers dropped plans to build Ford, Acura and Infiniti dealerships on the school site.
Officials in both cities said Monrovia has fared better with its side of the auto mall because Duarte was delayed for more than two years while it purchased land for the school site and built the new facilities.
“Had they not had to build another school, the timing would have been better for them, and they would have gotten those spaces filled,” Monrovia Community Development Director Don Hopper said.
Still, Duarte officials insist all is not lost, pointing to newly hatched plans for retail shops and restaurants on the site where the three dealerships were supposed to go.
A month ago, the City Council entered into an exclusive negotiating agreement with an Orange County-based developer to build a commercial center there, including preservation of an old school building still on the property. In addition, City Manager Jesse Duff said, seven other developers are lined up with proposals if the deal falls through.
Duff said Duarte can sell the land at a much higher price to commercial developers and will have to wait only seven years to recoup the millions it spent on land for the Autoplex. With auto dealerships, it would have taken 15 years to break even, Duff said, because the city took a loss on its land sales to the car dealers.
“This will be a much better financial deal,” Duff said.
Mayor John Fasana agreed. “Given the current real estate conditions, the appreciation of the market value of the land, it makes more sense to view it as a retail site,” he said.
But across the city line in Monrovia, officials are concerned that breaking up the long strip of auto dealerships may cripple what was envisioned as a multimillion-dollar cash cow for both cities.
“Both cities together could have (had) 15-20 franchises over 50 acres,” Monrovia Community Development Director Hopper said. “If Duarte abandons those plans, it does have some diminishing impact on the auto center complex for our city. It significantly fragments the auto center.”
There may be other problems on the horizon. Dennis Assael, who owns four franchises in Monrovia--Mazda, Hyundai, Subaru and BMW--is backing away from an agreement with Duarte’s Redevelopment Agency to open Volkswagen and Subaru franchises on three vacant acres in the Autoplex. Duff said the new business was supposed to open two years ago, and construction hasn’t even started.
Jim Wilfong, vice president of Assael’s dealerships, acknowledged the delays. However, he believes the agreement is not binding because the Autoplex has never become a full-fledged auto mall. But Duff said the 1987 agreement makes no specific mention of an auto mall.
Wilfong said the plans were indefinitely postponed because a slump in the automobile market, coupled with the city’s plans to convert part of the auto mall to a retail center, makes the business venture riskier.
“In today’s auto industry climate it doesn’t make sense to build right now,” Wilfong said, adding, “If we had the right price, I’m sure we would sell the land.”
Duff said the city is considering bringing legal action against Assael for breach of contract.
The city also may try to block a possible plan to sell the Nissan and Isuzu franchises on the east end of Duarte’s Autoplex and move them to Monrovia. The two businesses and an adjacent Suzuki dealership closed their doors in March, shortly after filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code. In May, a bankruptcy court judge ordered the dealerships to liquidate their assets.
Sierra Autocars Inc., which owns four franchises in Monrovia’s Autoplex, is offering to buy Nissan and Isuzu and move them to the spot now occupied by Lincoln-Mercury, on the Monrovia side of the complex. Duarte officials claim a move across the border would violate an agreement to keep the businesses in the city for five years or until they generate $1.5 million in sales tax revenue.
David Haberbush, a court-appointed trustee overseeing the sale of the closed dealerships, said he would prefer to keep the businesses in Duarte but hasn’t received other offers.
210 FREEWAY AUTOPLEX TENANTS Who’s in
Now operating in Duarte: Mitsubishi, Toyota
Now operating in Monrovia: BMW, Daihatsu, Honda, Hyundai, Lincoln-Mercury, Mazda, Pontiac, Subaru
Who’s out
Closed their Duarte dealerships in March: Isuzu, Nissan, Suzuki
Indefinitely postponed plans to open in Duarte: Subaru, Volkswagen
