New Car Dealer at Pete Ellis Site Likely by April : Auto sales: City officials are excited about the prospect of replacing the sales tax revenue lost by the closure of Ellis’ dealership last June.
The Pete Ellis Bellflower auto dealership that closed abruptly last June after an attempt by the city to bail it out of financial difficulty is expected to be reopened in April by a Midwestern Ford dealer.
Richard Basile, market representation manager for the Ford Motor Division’s Los Angeles Region, said a new dealership for the 5.5-acre site alongside the 91 Freeway at Artesia Boulevard and Downey Avenue has been recommended by the Ford region. He expects Ford’s Detroit headquarters to give its approval by April 1.
“He should be in business in April,” said Basile, who declined to name the dealer but said he is part-owner of an existing dealership.
Leonard Raynor, who operated Hensley-Anderson Ford for 19 years before leasing the business to Ellis in 1985, said the new dealer is from Milwaukee.
He said the deal is “between 80% and 90% certain,” adding that terms of the lease will be decided at a meeting with the dealer and Ford officials on Feb. 14. Raynor would not say how much rent he will receive.
Bellflower officials, who saw $400,000 in annual sales tax disappear last year when two big auto dealers failed, were elated about the prospects of new life at the Ellis site.
“It’s a . . . must,” said Mayor Bill Pendleton. “We have to have some revenue to keep the boat going. The tank is getting low.”
Linda Lowry, assistant city administrator and finance director, said the city has been trying to lure a new dealer since Ellis failed less than three months after being given $700,000 in grants and loans from federal Housing and Urban Development funds to keep afloat. “The timetable is urgent,” she said.
Basile described the new dealer as “someone with a good track record in customer satisfaction and sales.”
After spending a year and a half rebuilding the business, he said, the dealer should equal Ellis’ annual volume of 1,200 to 1,500 new car sales a year. Despite the gloom surrounding the American automobile business, Ford considers the Bellflower site viable because of freeway visibility and easy access from Downey Avenue freeway ramps. “Ellis did sell quite a few vehicles,” Basile said.
Joe Cefaratti, the city’s auto consultant who helped bring the new dealer to Bellflower, said the proprietor is receiving substantial funding from Ford under its dealer development program. “In essence,” he said in a letter to the city, “this means the dealer will be well-financed and able to handle the high volume of sales anticipated.”
Basile would not discuss financial arrangements of the new dealership. But Cefaratti said he believes that it will take $2 million to reopen the dealership.
Cefaratti called the revival of the Ellis site a sign that the car business is coming back and that American cars are increasing in popularity. “Part of my sales pitch is that the survivors of this (downturn), two years from now, will be on easy street,” he said.
According to Basile, Ford’s Los Angeles Region, which encompasses the lower third of the state as well as Arizona and southern Nevada, saw a 12% increase in car sales, and a 16% jump in truck sales, in January compared to the same month a year ago.
In other good news for Bellflower, Cefaratti said that in about 30 days he expects to have a dealer to recommend for the onetime Carmen Koosa Toyota site across Downey Avenue from Ellis. The dealership closed five months before Ellis called it quits.
Cefaratti said the dealership may not be Toyota because the company doesn’t want to reopen a Bellflower location. Mike Mahoney, assistant Los Angeles regional manager of Toyota Motor Distributor Inc., said the company does not want to cut into the profitability of other dealers by reopening the Bellflower site. “Maybe in a year we’ll decide the market is right,” he said.
Meanwhile, Bellflower--shocked by Ellis’ unexpected closure last June--is trying to recover the $300,000 grant and $400,000 no-interest loan it gave to the once-high-flying auto dealer. The city sued Ellis in September, contending that Ellis misrepresented his financial condition and that the closure deprived the city of any economic benefit from the deal.
City officials said last fall that instead of continuing to provide financing to Ellis as promised, Ford Motor Credit Co. took $430,000 of the city funds for back debts and said it was stopping his credit. He was unable to obtain financing elsewhere.
Attorney David Haberbush, who is handling the city’s case, said this week that Bellflower may expand the suit to include Ford Motor Credit.
Ellis, meanwhile, said he is trying to untangle his financial affairs so as to make full restitution to the city.
At one time, Ellis operated three dealerships in South Gate and one in Bellflower. All of the dealerships failed last year within five months.
