GILROY
– It was
”
Going once, going twice,
”
and the Indian Motorcycle factory on Tenth Street was sold to a
Hollister developer and vineyard owner for $3.35 million.
GILROY – It was “Going once, going twice,” and the Indian Motorcycle factory on Tenth Street was sold to a Hollister developer and vineyard owner for $3.35 million.
After signing the papers to seal the deal, Ken Gimelli told reporters he planned to rent the building to anyone who is interested. He had no particular tenants in mind, he said, and none had approached him.
Gimelli said he would be open to a new Indian Motorcycle owner occupying the space, but he would not play a role in encouraging a new owner to build bikes in Gilroy.
Gimelli entered the only bid from the floor in an auction for the single piece of real estate Wednesday afternoon at the Historic Strand Theater, in downtown Gilroy.
“I think it’s a buy,” was Gimelli’s only comment afterward.
The only other bid was a written submission for $3.3 million – the “absolute minimum” the auctioneers were willing to accept to clear liens on the property, according to Fred Havens, vice president of marketing for auctioneer Mario Piatelli’s Beverly Hills-based firm.
On top of Gimelli’s bid offer, he paid a 6 percent “buyer’s premium” for the auctioneer’s commission and expenses, bringing his total payment to $3,551,000.
Gimelli is an industrial developer in Hollister and owns a portion of the Hollister Business Park. He also owns Gimelli Vineyards in the Hollister area, which sells grapes to large-scale wine maker Kendall-Jackson, according to Havens, who said he knows this from recently selling a Kendall-Jackson winery in King City.
‘Everything must go’
Meanwhile on Wednesday, at the 200 E. Tenth St. factory Gimelli bought, Michigan retail liquidator Bill Melvin opened a piecemeal sale of the building’s contents, which he now owns: from gaskets to gas tanks, computers to clothing.
Crowds greeted Melvin and his staff, starting more than an hour and a half before the sale’s 9:30 a.m. opening.
“I got here at 8, and there were already quite a few people (waiting outside the door),” said Kim Forest Barbosa, of Gilroy, a receptionist at Indian for four years whom Melvin hired temporarily to welcome customers.
By noon, people were still waiting in lines for more than a half-hour to negotiate prices and pay for the things they wanted. Some pushed racks of fenders and wheels. Others bought tools or industrial equipment. Some carried cases of Indian brand motor oil. Jesse Cruz, of Salinas, was buying a stack of Indian-labeled coveralls and work shirts, like those he used to wear when he worked in the company’s paint shop. He called them “souvenirs.”
“It’s kind of sad to see (the factory) in this state,” Cruz said, looking around as he waited in the long line.
Cruz and Barbosa were among about 380 employees laid off when Indian closed its doors Sept. 19 due to a lack of capital.
Melvin wandered the factory floor Wednesday, negotiating with one customer after another. He said he was satisfied with the sale thus far, although he hadn’t known what to expect. He made a point of apologizing to his customers for the disorganization. He said he was “really happy that so many people showed up” but sorry they had to wait in such long lines.
“We really didn’t have a lot of time to prepare,” Melvin said.
Melvin pulled many items from the sale between Monday’s viewing and Wednesday, including nearly 60 motorcycles and any equipment he thought might be needed if someone tries to restart Indian motorcycle production in Gilroy. Melvin is one of several parties trying to do this.
First, he would have to buy Indian’s collections of trademarks and logos. Officials at Indian and its liquidation broker, the Credit Managers Association of California, say they expect to sell the trademarks sometime in February.
In front of the factory Wednesday, large signs read, “Cheap!” “Make offers” and “Everything must go.” All four shoppers The Dispatch spoke to, however, said that while discounts could be had, the inventory in general was not at bargain prices. For example, a price list showed that all motorcycle parts valued at less than $2,000 would be sold at original wholesale prices, with 10 and 20 percent discounts coming in as the value rose. Among the clothing, a T-shirt had been reduced to $15, a leather jacket to $450 – less than a motorcycle dealer might sell them for but not drastically cut-rate.
“Some of the stuff is pretty high (-priced),” Cruz said. “But some of it doesn’t have a price (tag), so you can just make an offer.”
The sale will continue until Melvin sells all the items he wants to sell, he said.
A quick auction
About a dozen people were present at the Strand Theater for the auction. Conspicuously absent were Melvin and Rey Sotelo, who are leading investment groups committed to buying the Indian brand and restarting motorcycle production in Gilroy.
Piatelli advertised on his Web site that this property was worth $10 million. But he opened the auction by saying, “We think the property is worth $5 million.” He opened the bidding at that amount but got no takers. Hands stayed down as Piatelli dropped the price by $100,000 increments.
When Piatelli got as low as $3.3 million, he announced the written bid and asked for a raise. Gimelli immediately made his offer, which was uncontested.
The auction lasted about 15 minutes.
The 200 E. Tenth St. property consists of a 154,000-square-foot factory on a 274,000-square-foot lot. Gimelli bought it from the Credit Managers Association of California, to which the motorcycle maker assigned the property. CMA will use Gimelli’s $3.35 million to pay Indian’s many creditors, including Manabi Hirasaki, the deed holder for the property, to whom Indian had stopped making mortgage payments. Hirasaki was present at the auction Wednesday but declined comment.
The amount Melvin paid for Indian’s inventory, which neither he nor CMA officials would name, also will go to pay Indian’s creditors.
