Boeckmann Sells Burbank on Dealership Incentives

The City Council has given a Ford dealership the land, loans and tax rebates it demanded before constructing a “superdealership” in the city.

By a vote of 4 to 1 on Tuesday night, the council granted Bert Boeckmann--owner of the highly successful Galpin Ford dealership in North Hills--the incentive package that includes 12 acres of land and a $3-million loan.

Boeckmann had told city officials in previous meetings that the project, which he estimated would cost $40 million, was dependent on the city’s willingness to participate.

Supporters said the project would generate tax revenues for the city and create 150 jobs.

Councilwoman Stacey Murphy argued that the dealership would help diversify Burbank’s economy. “We’re relying very heavily on the entertainment industry,” she said. “But we can’t put all of our eggs in one basket; we need to diversify.”

The lone dissenter, Councilman Ted McConkey, said the deal was a subsidy for not only Galpin, but also Ford Motor Co.

“This is a perversion in terms of what I believe is capitalism,” he said at the meeting.

The deal was also criticized in recent weeks by Community Chevrolet, the city’s only new-automobile dealership.

“Burbank hasn’t offered us $3, much less $3 million, to build a new store and bring in more tax dollars,” said Ken Hastings, general manager of Community Chevrolet.

“We’ve supported the city for over 30 years with our sales tax revenue. What has Bert Boeckmann done for the city of Burbank over that time?”

The deal as approved by the council includes:

* The loan of $3 million for construction. Galpin will have to pay it back, plus 7% interest per year.

* Approximately 12 acres of land, valued at $2.4 million.

* The dealership receiving one-fourth of the sales tax generated by his dealership each year for 10 years, up to $9 million. The dealership’s cut of the taxes goes up to one-half when the loan is repaid.

Supporters cited city figures showing the city and its Redevelopment Agency stood to gain roughly $54.3 million in tax revenues over the next 25 years--far more than the city will give the dealership in incentives and loans.

City officials said the high cost of land and construction for the multistory facility, including showrooms and a service center, would leave the dealer with an estimated $12.5-million deficit.

“Most people don’t realize that the average dealer is operating on a 1% profit margin after taxes,” Boeckmann said last week. Many dealers lose money on new cars, he said, making back the losses in service and used-vehicle sales.