GILROY
– An out-of-town used-car dealer has gained the city’s
permission to set up shop in a corner of a south Gilroy shopping
center – much to the chagrin of the long-established dealers along
the city’s auto row, whose lines of shiny inventory lie just a few
yards away as the crow flies.
GILROY – An out-of-town used-car dealer has gained the city’s permission to set up shop in a corner of a south Gilroy shopping center – much to the chagrin of the long-established dealers along the city’s auto row, whose lines of shiny inventory lie just a few yards away as the crow flies.
The City Council voted 4-3 Monday to overturn another close decision by the Planning Commission and allow San Leandro’s The Car Store to hold up to four temporary used-car sales at the South Valley Plaza shopping center.
Councilmembers who approved the new business seemed wary to get involved in private competition – and said they were having a hard time finding other procedural means to reject use permits for the tent sale.
“Competition to me isn’t the answer to denying this,” said Councilman Al Pinheiro, who cast one of the four votes to support The Car Store’s appeal. “There are many other (business) venues that deal with the same thing.”
But Mayor Tom Springer and Councilmen Roland Velasco and Bob Dillon dissented on the vote, citing the value and benefits the hometown dealers provide and concerns over potential parking problems.
“It’s the city’s turn to step up and continue the partnership with auto row,” Velasco said.
After existing auto row dealers cited unfair competition, Planning Commissioners voted 4-3 to reject the San Leandro-based dealer’s plans to hold a series of four tent sales featuring 150 cars in the eastern portion of the center’s parking lot.
They said the outsiders – with relatively inexpensive used cars and no real stake in the community – would threaten Gilroy’s “Drive A Little, Save A Lot” image and reputation that they’d spent a number of years and dollars cultivating. Commissioners also cited concerns about how the tent sales would affect parking for existing businesses in the center, which recently landed several new businesses after a long period of economic struggle.
But in his rebuttal Monday, The Car Store’s Rick Walkewicz told Councilmembers they should not be making decisions about for Gilroyans about where to buy their used cars.
“Let the marketplace compete,” he said.
Walkewicz said cars featured in the tent sales – which could start as early as next weekend – would generally range between $3,995 and $8,000 in price and come with three-month, 3,000-mile warranties that Car Store officials would be responsive in handling.
The series of four extended-weekend sales would also draw new customers to the area who could end up buying from other dealerships, he said, and would fetch an estimated $80,000 to $100,000 in sales tax for the city.
He said the city could yank the tent permit if parking problems surfaced. And The Car Store’s Tim Wright told Council that some Gilroy dealers have actually used his sales in Santa Cruz to dispose of inventory.
“The only complaint seems to be from existing auto dealerships who don’t want additional competition,” Walkewicz said.
But several auto row dealers came to the podium Monday to express similar concerns about their carefully crafted image that Al Sanchez VW president Adam Sanchez had outlined to Planning Commissioners last month.
While auto row dealers are in town permanently and make sure to take care of their customers, the newcomers would be “here today and gone tomorrow,” they said.
Gilroy Toyota’s Murry Shaffron said even used cars that cost over $12,000 and have under 40,000 miles on the odometer still produce some complaints for dealers – let alone the lower-priced vehicles The Car Store would sell.
“You’re gonna have complaints, I guarantee it,” he said. “And they’re not gonna be there (to respond).”
And auto row representatives also complained that a portion of the sales pie would be going to an outsider.
“I have 10 salespeople that live and work in this community, and they are commission only,” said Gavilan Honda’s Vallie Bishop. “It seems unfair to dilute our marketplace for 1 percent or less of the sales tax revenue.”
And according to one longtime dealer, the tent sales would also affect their expansion plans. Sharon Marx of Harry Marx Chevrolet said her company is working to acquire the vacant movie theater adjacent to the area where the tent sales would happen.
“They’ll be taking up most of our parking spaces,” she said.
Dillon backed the established dealers from the dais.
“The problem is ‘we’re us’ and ‘you’re them,’ ” he told Car Store representatives. “We have people that work in this community for their income.”
But Pinheiro said he was having difficulty finding reasons why the city should thwart competition when it appeared the applicants had followed the city regulatory process.
“I’m finding a hard time how we could say no to those folks if they’re going through the (city’s) process,” he said.
He also expressed concerns about precedent.
“If it all comes down to competition, are we all of a sudden going to do this to other (businesses) in Gilroy?” he asked.
Councilman Charles Morales agreed.
“To me, to get into the spirit of micromanaging the enterprise system is against the system itself,” he said.
And Councilman Peter Arellano noted that if parking problems sprouted up, the city could simply amend or pull the used-car dealer’s permits.
“There’s parking all over the place,” he said.
But dissenter Dillon said the sales tax revenues would be “illusory” at best, while the operation seemed “itinerant.”
Councilman Roland Velasco said he’s not concerned about competition, noting that the city’s dealers “can compete with the best of them.” But the city’s finances – which rely heavily on sales taxes – would be in “a world of hurt” without them, he noted.
And Springer also said his dissent had “nothing to do” with competition, but was related to traffic impacts on neighboring businesses. He noted the tent sales would lie in the back of the shopping center and be realistically accessible from only one driveway.
“I’m having great difficulty believing this would not affect the other properties,” he said. “It will create a traffic problem. It will create a parking problem. It will cause damage …
“At this location, in this configuration, it doesn’t work.”
