Hopes for Burbank Auto Superstore Dealt Blow
The much-anticipated deal to establish a Ford auto superstore in Burbank suffered a potentially fatal blow Thursday. City officials said the auto company has abandoned plans to build a network of such mega-dealerships in the San Fernando Valley, and the auto maker said it was never committed to such a plan to begin with.
Earlier this year, Galpin Ford owner Herbert F. Boeckmann Jr. and Ford Motor Co. reached an agreement with the city of Burbank to build a giant dealership on 12 1/2 acres on Front Street, a site prized for its accessibility from the Golden State Freeway.
City leaders predicted the project would create 300 jobs and boost sales tax revenues by $55 million over 25 years. The City Council voted in January to provide Boeckmann and Ford with a $12-million subsidy, including a $3-million loan and the ability to recoup $9 million in sales taxes over 12 years.
But this week, after what seemed to be a relatively smooth ride, Boeckmann surprised city officials when he informed them that Ford had scrapped plans to build a network of up to four auto supermarket outlets in the Valley.
Burbank City Manager Bud Ovrom said the change in direction did not necessarily signal an end to Boeckmann’s efforts to locate a dealership in the city.
“The FRN [Ford Retail Network] was a factory sponsored marketing plan,” Ovrom wrote in a memo to the City Council on Thursday. “Without it, Boeckmann could still go forward with an independent dealership, exactly the way he operates Galpin Ford [in North Hills], the largest Ford dealership in the United States.”
But Burbank Councilman Ted McConkey said despite the city’s efforts to grab a share of the auto-retailing pie, no new project is expected to approach the scale of the original “revolutionary” Ford deal.
The Ford superstore would have consolidated many Ford brands under one roof, providing economic benefits to the dealers themselves and greater variety for customers, he said.
“Now I don’t think we will get anything remotely similar to that,” McConkey said.
But another source familiar with the deal said those involved were fooling themselves from the start. “I’m not sure there ever was a real chance of the deal going through because of the high expectations of the dealers involved,” the source said. “Any time large companies are in negotiations, individuals who hope to make quick profits should realize the deal is not over until it’s over.”
Ford spokesman John Ochs confirmed the company had been studying the possibility of establishing large, company-owned sales agencies in a number of markets across the country, but said Ford had never confirmed plans to establish any in California, “other than in San Diego, which we will be launching shortly.”
Ford’s purchase of the 12 1/2-acre site in Burbank was never meant to be a commitment to build the superstore, Ochs said.
He said Ford routinely buys land whenever the company looks into establishing its own sales outlets, but added the purchase did not necessarily mean that such an outlet would be built.
Ford now has title to the land, which the auto maker bought from Zero Corp. Under an agreement, Boeckmann has the option to purchase the property from Ford, Ovrom said. Ford and Boeckmann together have sunk $13 million into the venture and the city has no obligation to either unless a dealership is built, Ovrom said.
Burbank also is in negotiations with General Motors and the Lockheed Martin Corp. for a new GM dealership on as much as 17 acres at the “five points” intersection of Victory and Burbank boulevards. The land is owned by Burbank and Lockheed.
