City May Lend $500,000 to Auto Dealer

The La Verne redevelopment agency is considering lending as much as $500,000 to Person Ford to keep the dealership, the city’s biggest sales tax producer, from leaving town.

Last week, owner Warren Person asked the City Council, sitting as the redevelopment agency, for a loan of $500,000 in exchange for his commitment to stay in the city for at least five more years.

Person told city officials that the recession and the competition from nearby Colley Ford in Glendora have hurt business and forced him to consider moving outside the city.

In addition, Person said this week, he is worried that Ford will move a Pomona dealership into Claremont, where he has many customers.

Mayor Pro Tem Robert F. Rodriguez said of Person: “He’s the highest tax producer in the city, and this is like the small town with a big factory. We want to do what we can to help.”

Most car dealerships are near freeways, where they are highly visible and easily reached, Rodriguez said, but Person is on Foothill Boulevard, far from the freeway.

Person said he would rather stay in La Verne but needs the city’s help.

“We have a good customer base here, and (relocating) would basically be like starting over,” Person said. “There is a lot of blood, sweat and tears we’ve put in right here.”

The dealership has been in La Verne since the early 1970s, and Person has owned it for more than 12 years. At its peak three years ago, it employed 120 people and sold as many as 2,000 new cars annually.

The firm now has 90 employees, up from a recent low of 80, and is selling about 1,300 new vehicles a year, generating about $350,000 annually in sales tax. Overall, the city expects to take in a total of about $1.8 million in sales tax revenue this year.

The loan request, Person said, “is not something unique,” adding that two of his competitors, in Upland and Glendora, have negotiated similar deals with the redevelopment agencies.

City Manager Martin R. Lomeli said city officials are looking into ways under state redevelopment law to assist Person. They said they are unsure how much, if anything, the city could justify spending to keep the dealership.

It’s not uncommon for city redevelopment agencies to sell land below market value to entice businesses that generate high sales tax revenues to locate in the city, Lomeli said.

“What’s unusual is we’re trying to keep an existing dealership in the community,” he said. “We need a commitment from him to stay because some cities have been burned.”

Lomeli said the city will consider Person’s request for the loan to be forgiven if the dealership produces a certain level of sales tax during the next five to 10 years.

The loan, Person said, would be secured and La Verne taxpayers “would not be taking a risk.” He said the $500,000 would be used as working capital and perhaps for some improvements.

City staff will make a recommendation to the council within two months, Lomeli said.