City OKs $150,000 Grant to Help Build Auto Showroom : Finances: Officials say tax revenue from the new dealer will be minimal, but the action will give a psychological lift to the area.

The City Council has approved a $150,000 grant to an auto agency in a move to shore up Downey’s struggling auto row. The grant was made to Simpson Buick to build a showroom for an Oldsmobile dealership at 8400 Firestone Blvd.

Simpson Buick obtained the franchise that was held by Sopp Oldsmobile before it closed a year ago. In the past year and a half the city has also lost Sopp Mitsubishi, Downey Toyota and Paramount Chevrolet.

Assistant City Manager Ken Farsing said the Oldsmobile dealership would be the first to return to the city since the recession began.

He said the grant approved Tuesday “is a good agreement for the dealer and the city. (Simpson Buick) is a viable, profitable dealership.”

The city hopes to recover the cost of the grant with increased sales taxes generated by the new combined dealership.

The $150,000 will provide half of the cost of renovating the Simpson Buick building and constructing a new showroom.

The total cost for the renovation is expected to be about $300,000.

“We took a stance that we are in some tough financial times so (the dealership) should put in some money too,” Farsing said.

“By splitting 50-50, the dealership is also showing faith in the system,” he added.

Gary Simpson, president of Simpson Buick-Oldsmobile, said he is elated by the City Council’s decision.

“I feel in view of what is happening in the auto climate everywhere that cities are concerned and have to become partners with the dealers,” Simpson said.

If the plans for the showroom meet zoning and building requirements, construction would begin in July, 1992, with completion expected by that November.

Simpson Buick promised to operate the franchise for at least 10 years. The agency will hire 10 new employees.

The city may consider a similar deal with Pacific Mitsubishi, formerly Sopp Mitsubishi. Farsing said the facility would need some major renovations.

Downey officials say they are attempting to do what they can, within financial constraints, to keep auto dealerships.

Auto sales taxes generated $2.7 million for the city last year, 10% of the general fund.

Sales-tax revenues from the new Buick-Oldsmobile dealership are not expected to be significant. The benefits are “more psychological,” Farsing said. “They will show that this is a market area for cars. It will also help revitalize Firestone Boulevard,” Downey’s unofficial auto row.

Tuesday’s action was the second time in recent weeks that the City Council has decided to spend public funds to aid Downey’s auto dealerships.

The council voted to pay an advertising consultant $10,000 last month to come up with a group advertising plan to help the city’s dozen dealers.

The Cerritos Auto Square currently uses such a group advertising campaign.

The Downey plan should be completed within the next month, City Manager Gerald M. Caton said.

“Hopefully we’ve hit the bottom with the four franchises leaving, and hopefully we’re on our way back up,” Caton said.