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October 17, 2021

Gilroy Motorcycle Center moving into former OSH building

Longtime business eyeing November opening

Gilroy Motorcycle Center is moving into the former Orchard Supply Hardware building on East Tenth Street, bringing life to a blighted corner of town as the business works to keep up with its skyrocketing demand that is showing no signs of slowing down.

Greg Bumb, general manager of Gilroy Motorcycle Center, said the move marks four years of searching for a new spot and about two years of negotiations with the owner of the building.

“It’s huge for us, huge for this shop and that place in particular,” he said.

OSH, 303 East 10th St., closed its 36,000-square-foot store in 2014, a year after the San Jose-based company filed for bankruptcy and was purchased by Lowe’s.

The parking lot most recently housed overflow inventory from the South County auto dealerships, but were removed in early 2020 following the dealerships’ closure.

The area has had some more movement in recent months, after the Gilroy City Council agreed in January to split the property to allow an O’Reilly Auto Parts store to be constructed on the corner of East Tenth and Alexander streets.

The Bumb family took over Gilroy Motorcycle Center, a longtime downtown staple, four years ago. Since day one, Greg Bumb said he’s been searching for a new spot, as the current 14,800-square-foot building at 7661 Monterey St. has been hindering the business’ expansion plans.

Gilroy Motorcycle Center currently carries eight brands, including Honda, Yamaha, KTM, Husqvarna and others, and recently expanded into the e-bike market, carrying products from Specialized and others.

The building once housed three separate motorcycle shops, but over the years it was eventually consolidated into one shop, knocking out the walls to connect each area of the building. 

Despite that expansion, it’s now out of room. The parts department is a tight maze of shelves filled with various equipment, the four service bays are constantly full, and motorcycles are mere inches apart from each other in the showrooms. The narrow parking lot, meanwhile, makes it difficult for more than two customers with trucks and trailers to pick up or drop off their bikes, Bumb added.

Bumb said the business is also storing dozens of motorcycles at a storage facility in Yuba City, only because they won’t fit in the store.

One of Gilroy Motorcycle Center’s showrooms is completely full with inventory. Photo: Erik Chalhoub

The move into the OSH building will more than double its current overall space.

According to the plans submitted to the city, Gilroy Motorcycle Center will have a 22,000-square-foot showroom, with about five times the parts storage and a 48-foot-long customer service counter, in addition to office space.

The service area, located in OSH’s former customer pickup area, is 6,100 square feet in size, enough room for about 10 service bays.

The building, which was constructed in 1984, is undergoing “a lot of patch and repair work” with local contractors LWG Construction leading the renovation, Bumb said. In addition to various ADA upgrades, the building has received a new roof and HVAC system, and the floor will be resurfaced to give it more of a warehouse feel. The service area will also have an exhaust system installed.

Overall, Bumb estimates the renovation will cost $2.5 million, split between the building owner and the business.

The plan is to open in November, Bumb said, adding he was cautiously confident in saying that it will be the largest motorcycle dealership in Northern California.

Inventory struggles in the face of ‘exploding’ demand

The Covid-19 pandemic and related months-long manufacturing facility closures in 2020 have crippled supply for automotive dealerships across the country. In addition, a semiconductor chip shortage has forced countless newly manufactured vehicles to be left in storage as they await those final parts.

It’s no different for the motorcycle industry.

Bumb said his and other dealerships are grappling with cancellations from their manufacturers or indefinite delays. As an example, Bumb said Gilroy Motorcycle Center placed its largest-ever order with Yamaha in late 2020, only to have the manufacturer send a letter a few weeks later stating that it had to cancel half of the purchase because it wouldn’t be able to fulfill it for at least a year.

An “explosion” in demand has further complicated supply, Bumb said.

Shortly after Santa Clara County’s initial shelter-in-place order in March 2020, Bumb said Gilroy Motorcycle Center furloughed most of its staff with two weeks’ pay. The shop, meanwhile, was allowed to stay open as an essential business thanks to its service department.

Sales “nosedived” in early April, according to Bumb. However, by the end of that month “it just exploded,” he said, and May 2020 remains the best sales month on record.

The business brought all of its employees back in June 2020, and has been on a “hiring frenzy” since then, Bumb said, adding that the center plans to increase its current staffing of 22 once it moves into the new building.

Sales have tapered off since then, only because of inventory struggles.

“If I didn’t have as many brands as I have, I would’ve had to furlough or shut down half my shop because of the lack of inventory, not for a lack of interest or demand,” he said. “Having this many brands helped me not just stay afloat but keep all these people employed.”

Bumb points to the fact that people were desperate to get outdoors after being stuck at home for so long as a reason for the increase in demand.

“The safer option to get out of the house was to jump on a bike and go riding,” he said. “The demand from there just exploded.”

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