Two days after the City Council decided to give auto dealer Pete Ellis $700,000 to prop up his faltering Ford franchise, Ellis' cross-town competitor also demanded help from the city.
Clive Skilton, the president of DON-A-VEE Jeep Eagle Inc., has requested that the city help him buy the property on which his business is located. In a March 14 letter to city Finance Director Linda Manning, Skilton also asked for help in acquiring more land to expand his operation.
Manning said that Skilton has not clearly defined what he wants the city to do. Once he has, she said, city officials can begin discussing if, how and when they will meet those requests. In an interview Thursday, Skilton declined to specify what type of assistance he would like from the city.
The City Council on March 12 voted unanimously to use some of its federal Housing and Urban Development funding to loan Ellis an interest-free $400,000 and give him a $300,000 grant. Ellis, who was forced to close three of his dealerships in South Gate, had informed the city that without the funding he would be forced to close Pete Ellis Ford in Bellflower, his last remaining franchise. In return for financial aid, the city received a $400,000 interest in the dealership as collateral. Pete Ellis Ford has paid the city about $300,000 a year in sales taxes.
City leaders said they were expecting Skilton's request.
"We are going to work with them to come up with the best possible solution. We surely don't want to lose DON-A-VEE," Councilman Bob Stone said. "I understand his (Skilton's) point of view, but at the same time he needs to understand where the council is coming from. We don't have an open checkbook."
In the letter, Skilton reminded city leaders that DON-A-VEE, with more than $47 million in sales last year, is the city's single largest sales-tax producer. The city receives more than $400,000 a year from the auto dealer. If the city cannot help DON-A-VEE, Skilton said in his letter, "the alternative is for us to move our entire operation to one of the three surrounding cities that are offering attractive financial aid packages."
He said in an interview that he did not wish to put city leaders "under the gun," but said he has been waiting for more than two years for the city to fulfill its promises to help him once it forms a redevelopment agency.
With the help of the redevelopment agency, Skilton could acquire much-needed property at low cost or receive agency funds to expand his operation and perhaps add another franchise. In Cerritos, for example, the city redevelopment agency purchased property, paved streets, put in curbs, gutters and landscaping and then sold the property to car dealers at drastically reduced prices to create the Cerritos Auto Square.
DON-A-VEE's stock of 300 to 600 new and used cars is on a three-acre lot at 17308 S. Bellflower Blvd. The site is too small, Skilton said, and requires that another site be rented for storage and service.
However, the city's redevelopment plan has been slowed by problems. Now city leaders estimate that it will take another five months before the plan would be ready to submit to the county for approval.
In the meantime, Skilton said he has grown impatient. The relationship between DON-A-VEE and the city has been good, but he said city officials may have "taken DON-A-VEE for granted."
"(The financial aid to) Pete Ellis prompted us to reevaluate," he said. "We need help just like anybody else." Skilton emphasized that his business is not in the same danger of failure as Ellis' was. In fact, he said, last year DON-A-VEE became the nation's largest retailer of Jeep and Eagle vehicles. Finance Director Manning said that the city does not have HUD money to loan or grant Skilton at this time, and added that his situation is entirely different from Ellis'.
"He is not in a financial crisis, which is part of the guidelines for using HUD money," she said. "It has to be 'necessary and appropriate.' It was necessary for Ellis. He would have had to close."
City Council members said they gave Skilton a HUD grant for about $140,000 in 1989 to help him move the dealership from the corner of Alondra and Bellflower boulevards to 17308 S. Bellflower Blvd.