Santa Clarita / Antelope Valley : Lancaster Will Buy Former Site of Relocated Auto Dealership

City officials have agreed to purchase the former Sierra Highway site of Sierra Toyota/Mercedes-Benz for up to $500,000, granting a sizable cash infusion to the Lancaster dealer who relocated to the city’s auto mall last year.

The City Council, sitting as the city’s Redevelopment Agency, approved the purchase by a 4-1 vote Tuesday night, with Mayor Arnie Rodio dissenting. Rodio said he didn’t think it was the city’s place to bail out Sierra Toyota.

In a separate 5-0 vote, meanwhile, the agency agreed to negotiate reselling the site to Wheeler Racing, a local automotive parts supply business.

The effect of the city’s action is to pay off the outstanding debt Sierra Toyota owner William T. Wright has on his former business location. But the city stands to get much of the money back under a complicated deal aimed at getting Wright to add a Lexus franchise and a used car lot at the mall.

The $500,000 purchase price is about $100,000 higher than the property’s $400,000 appraised value, city officials said. If Wright builds a Lexus dealership at the city’s 45-acre auto mall and sells the first Lexus within four years from now, the $100,000 is forgiven. Otherwise he must repay it.

City officials expect to recoup the $400,000 portion of their expenditure through the sale of the former Sierra Toyota site. According to city documents, Wheeler Racing has offered to pay the $400,000 appraised value, but also is seeking city financing assistance for the purchase.

The former Sierra Toyota site is located at 45134 Sierra Highway near Avenue I. The city approved a similar buyout a year ago of the former home of Johnson Ford on 23rd Street West, also enabling that dealer to relocate to the city’s auto mall east of the Antelope Valley Freeway south of Avenue K.