Council upholds vote for Car Store

Early shoppers get a look at the used car sale in the South

– Gilroy auto dealers showed up at City Hall to continue their
protest Tuesday, but they did not change the minds – or votes – of
divided city leaders about a temporary used-car tent sale.
GILROY – Gilroy auto dealers showed up at City Hall to continue their protest Tuesday, but they did not change the minds – or votes – of divided city leaders about a temporary used-car tent sale.

Despite the continued lobbying by existing Auto Row dealers, the City Council cast another 4-3 vote that allows San Leandro’s The Car Store to hold up to four temporary used-car sales at the South Valley Plaza shopping center.

The controversial sales – already approved in concept by Council earlier this month – were supposed to kick off during the long President’s Day weekend at the center at 10th and Chestnut streets, which once housed the city’s Kmart store.

However, city officials said the new dealers couldn’t open last weekend because under the approval process – made lengthier by an appeal – they couldn’t legally be granted their city permits until another procedural vote by Council.

As officials prepared to do that Tuesday, some existing dealers urged them to scrap the approval and defend their interests from what they said would be unfair and damaging competition.

“We don’t want to damage the reputation we’ve built up,” said Adam Sanchez, president of Al Sanchez Volkswagen-Mazda-Jeep.

But his concerns were questioned and rebutted by Councilman Al Pinheiro, who warned against the nasty precedent and quagmire such a rejection would set.

“If we’re going to do it for the car dealers, we’d have to do it for all (businesses),” he said.

The Car Store officials expect to display up to 150 used cars priced between $3,995 and $8,000 during the four-day sales events, which will now start this weekend and occur three more times through August. The events will also include four days of setup and cleanup for the cars, a 20-by-40-foot sales tent and bathrooms.

But while the events will help fill the relatively empty eastern portion of the old Kmart center’s parking lot, they will also be next-door neighbors to the city’s long-established Auto Row.

Dealers there have said The Car Store’s temporary sales will draw upon their existing appeal while also damaging it with low-cost, potentially trouble-prone inventory and a lack of a permanent presence to answer complaints.

Most of the city’s dealers cooperated and moved when the city wanted them to locate into the 10th Street row, Sanchez said, and dealers now emphasize the location in their advertising. But if customers don’t get a quality car from the new, temporary dealership located in that area, it could have an adverse impact on the reputation of the other nearby dealers, he said.

“If someone has a bad experience one time, they tell 20 people,” he said.

The city could also suffer economically if the dealerships do, he warned. City officials have said the dealerships generate roughly as much revenue for the city as the Gilroy Premium Outlets.

“We do make a big difference in this town,” Sanchez said.

Other new permanent dealers – which would pay taxes and fees and hire full-time local employees – would be fair competition and are even to be encouraged, Sanchez said. It’s nothing personal against The Car Store, he said.

“I have nothing against him – he is a businessman,” Sanchez said. “I’d probably be trying to do the same thing if I was him.”

But Pinheiro – who opened Council discussion on the matter during the last meeting as well – said the new tent sale could have a positive effect for the existing dealers. If an out-of-towner drives all the way to Gilroy and does not find a car at The Car Store, they would be likely to visit other dealerships as well, he said.

“They’re not going to say ‘This is the only place I’m going to shop.’ ” he said.

Pinheiro also warned that protectionism could set a difficult precedent.

The city’s responsibility is to make findings for the tent sale’s permit based on specific criteria, Pinheiro said.

“We have an ordinance that allows this to happen,” he said. “We have to interpret that ordinance.”

He urged Auto Row dealers to channel their concerns into revisiting that ordinance.

“If you have things to disagree with, you have a venue to go about it,” he said.

And if The Car Store violates the conditions of its permit, the city has recourse, he added.

But The Car Store’s Tim Wright said that will be a non-issue – he plans to have a “model” sale.

Wright told Council he’s made the rounds of the shopping center – which has been drawing several new tenants lately after long periods of widespread vacancy – to speak with businesses and urge them to contact him with any complaints.

“I met with my guys and said we’re going to have the best sale ever in Gilroy – the cleanest and the neatest,” he said. “We’re going to have a good clean sale – let’s just give it a whack and try it.”

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