FULLERTON : City Will Subsidize Acura Dealership
The city’s Redevelopment Agency will provide $45,000 in lease payments over the next four months in an attempt to keep an Acura dealer from moving to a neighboring city.
Council members voted 4 to 1 last week to give the subsidy to the Hansel Automotive Group, which recently bought University Acura at 646 W. Commonwealth Ave.
Auto malls in Buena Park and La Mirada have attempted to lure the dealership, which has suffered a downturn in sales.
The dealership has kept its inventory at low levels.
“If somebody goes in to buy a new car there’s almost no selection,” said Terry Galvin, the city’s redevelopment manager. “It’s almost as if the dealership weren’t there.”
Galvin said only 20 cars have been sold at the site since July.
The Hansel Automotive Group will use the money it saves on lease payments to step up advertising efforts and build inventory, Galvin said.
Under the terms of the lease subsidy, Hansel has agreed to keep the Acura dealership in Fullerton at least a year.
“I’m going to take the gamble that I can make the Acura dealership survive by itself,” said Hansel owner Todd Nowling.
Cities find auto dealerships lucrative because they contribute a substantial share to sales tax revenues. Often, dealership sites are placed within redevelopment areas, allowing city officials to offer incentives such as low-cost land and rent subsidies to lure dealers.
Fullerton has collected as much as $140,000 in annual sales tax revenue from its auto dealerships. But revenues are running about half of that this year because of a sluggish economy.
Councilman A.B. (Buck) Catlin supported the lease subsidy, saying the assistance keeps Acura not only in town but in the hands of Hansel, “which has strong ties to the community.”
Councilman Chris Norby, who voted against the subsidy, said redevelopment money should be used to attract new dealerships. He added that the subsidy seemed like the city was taking a “micro-management” role in auto dealerships. “It seems that we have to spend more and more just to keep the sales tax revenue from leaving town,” Norby said.