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Lodi asks: What to do with idle car dealerships?

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Posted: Saturday, April 9, 2011 12:00 am | Updated: 9:15 am, Sat Apr 9, 2011.

Sitting on a bench outside the Department of Motor Vehicles office on Pixley Parkway, Chris Bedford smoked a cigarette while waiting to register his 2004 Chevrolet Colorado.

From his seat he had a perfect view of the buildings that formerly housed Plummer Automall and Geweke Chrysler Jeep Dodge. Once bustling hubs, the paint is now peeling from the vacant, weathered buildings.

Parking lots once teeming with freshly waxed vehicles are blocked off and have weeds growing through the cracks in the pavement.

"I have no idea what you do with those buildings," Bedford said between drags. "I don't think Lodi can support more dealerships than it already has in this economy."

The nation has lost roughly one-fifth of its new-car and truckdealerships since 2000, according to statistics from the National Automobile Dealers Association.

Lodi has done far worse than the national average, losing half of its major dealerships in the past three years. The community has lost both jobs and sales tax revenue with the closures of Geweke Dodge Chrysler Jeep, Geweke Ford and Plummer Automall. Although not counted in the NADA's official statistics, Geweke Dodge RV also closed its doors in 2009.

The problem is hardly exclusive to Lodi. Lee Gipson was staying at the Holiday Inn Express on East Kettleman Lane as he came through town on business earlier this week.

"I see it all over the place, from Red Bluff to Bakersfield," Gipson said. "There are lots dealerships that popped up in recent years that went under when the economy went south."

The closed businesses are large and highly visible. So what can be done with the former showrooms, service bays and sales lots? The answer varies — from a fitness center, to a business that provides warranty-only service, to a possible church.

Dealerships dwindling

The free market has buried several of Lodi's dealerships, but has not yet produced the entrepreneurs to fill them. Part of the reason dealerships can be left vacant after closing is due to their configuration, said John Giamalvo, of edmunds.com.

"From a real estate standpoint, car dealerships do well as dealerships and not much else," he said. "They tend to be nightmares to knock down."

Typically dealerships have environmental issues developers must address if they want to repurpose the building, such as deposits for oil and transmission fluids, he said. If the property is able to be leased or sold, it will often be along the lines of another automotive operation, he said.

Lodi Park and Sell on East Kettleman Lane is one such example. The former site of Geweke Dodge RV is now home to an independent car lot. The operation works as both a storage center for vehicles and a place where owners can sell their cars.

"It's worked out well," owner Todd Kulberg said of his operation that opened in 2009. "It gives people a safe environment to come and buy; you don't have strangers coming to your house."

Lodi Park and Sell has roughly 100 vehicles in storage and 60 vehicles for sale. About 500 people a week come by the lot just to look, Kulberg said.

However, Kulberg only leased a 3.5-acre lot for his dealership from Geweke. The defunct dealership's automotive service center sits unused behind the lot.

A dealership transformed

On the other side of the country, a group of entrepreneurs has worked to turn an empty Ford dealership in a state pummeled by the recession into a fitness center. Six months ago, Crossfit Sparta in Tampa sprouted up in Florida.

The former dealership features a martial arts center where the its showroom once stood.

In the area that housed the service center, the fitness center's weight equipment is used by its members. The former service bay's metal doors are lifted during the humid summer days to industrial fans can keep people cool as they work out. Co-owner E.J. Diaz said the lot's configuration has been helpful in getting the most out of the business.

"The parking lot is gigantic," Diaz said. "We do relays outside, or have basketball and football games out there. We have a lot of outdoor activities."

However, the transformation from car dealership to fitness center was not without its challenges. Since the building was zoned as a car dealership, the owners needed to change its classification to an assembly. They also needed to add handicapped bathrooms and update the building's fire-suppression system. All told, the repurposing cost about $300,000 for the 10,000-square-foot center, Diaz said.

A location like Plummer Automall, which sits on 14 acres and dwarfs the site of Crossfit Sparta by comparison, could prove difficult to fill. F&M Bank, the owners of the property, are using it for temporary storage, said Stephen Haley, chief financial officer for the bank.

Piles of scaffolding equipment are stacked in Plummer's former service center and can be seen from the street. Despite the bank using it as a temporary storage location, Haley said the goal is to find a tenant.

"Our interest is to sell it; we're not focused on what the use is," Haley said. "We're OK with it as long as the city is."

Plummer has generated interest from investors as a possible family fun center, said city spokesperson Jeff Hood, but nothing has materialized to this point. The idea of turning the dealership into a church has also been floated, he said.

While the city would like to see something that equals or outperforms the sales tax revenue the dealership provided to Lodi, Hood said it isn't their decision to make.

"The owners have the right to do what they want with it, but the city wants something that is tax-generating," he said.

For every million dollars a car dealership in Lodi pays in sales taxes, the city gets $125,000, Hood said.

What could work in Lodi?

While structures that aren't lived in typically show signs of decay, Plummer Automall hasn't come apart at the seams. The letters on the building remain intact, the electrical wires in its pillars haven't been stripped, and graffiti can't be found on the walls.

"We're pretty fortunate," Haley said. "We haven't had much happen to that property."

One window appears to have been broken and boarded up, but Haley would not confirm if it was due to an act of vandalism.

Although empty dealerships can typically be an eyesore, a local tourism advocate said it isn't causing too much of a strain on the nearby hotels — possibly because people are used to seeing them.

"It's a sign of the times and, unfortunately, not out of the ordinary," said Nancy Beckman, president and CEO of Visit Lodi! Conference and Visitors Bureau. "We take groups out on the hotel properties all the time, and people don't seem to comment on it. They are used to seeing it in their own backyard."

What would be ideal for Beckman would be to see the vacant dealerships turned into an event center or shopping center. Not only would it attract guests staying at the hotels, but it would also be highly visible from the freeway, she said.

Another option could be tailor-made for Lodi, according to one expert.

Giamalvo said the trend in car sales today is toward large regional automalls. Even so, Giamalvo said vacant dealerships like the ones in Lodi could serve a niche market in the coming years.

If someone with vision and capital were to open a vehicle service center that performed warranty work, the buildings could be used with their current configuration. The major bonus to a business like this is that it would provide a service to those who lived an inconvenient distance from the automall they purchased their vehicle in, where they would otherwise be forced to take their vehicle to for warranty work, he said.

"There are non-affiliated service centers that can do factory warranty work, and that's where money is," Giamalvo said. "Everybody gives a 100,000 mile warranty these days and most work done on a new car is warranty work."

Contact reporter Jordan Guinn at jordang@lodinews.com.

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5 comments:

  • Kevin Paglia posted at 5:52 pm on Tue, Apr 12, 2011.

    Kevin Paglia Posts: 1879

    Here's an odd thought (or two) about what to do with them:

    I enjoy working on my own car. oil changes, break jobs, replaced a gasket or two and a radiator on my '72 El Camino (first car). But what I lack are the tools and knowledge of some of the things that need to be done for more complicated things. So here's the odd thought. How about using the service bays at the dealership as a do it yourself auto repair center with trained professionals there to help you if you need it. Space can be rented by the hour, help hired (some of the out of work repair guys around town may appreciate some income) on an as needed basis. My son wants an older car which means he would need some help getting it to working order. It would benefit him greatly to actually do as much of the work as he can and this kind of set up would give him that experience/knowledge.

     
  • Darrell Baumbach posted at 11:45 am on Tue, Apr 12, 2011.

    Darrell Baumbach Posts: 9403

    Jackson... I agree with you that F&M would be taking on risk... and I would not even consider such a risky venture...unless the city of Lodi partnered with and eliminated the red tape and expenses associates in meeting city mandates and regulations... I thought the question was "what should "Lodi" do".. with an asset that is worthless and can lead to surrounding businesses having less value. If a farmers market was done correctly, it could generate revenue easily for itself and other businesses... but I agree with you... it will never happen if you follow in box thinking...

     
  • Jackson Scott posted at 8:14 am on Tue, Apr 12, 2011.

    Jackson Scott Posts: 381

    Kevin & Darrell, both sound like great ideas. But put yourself in F&M's shoes: do you want to open this site to the public for a farmers market or flea market type of events? How much revenue can be generated by such events? Then look at the amount of background work associated with producing such an event: site prep, layout design, porta potties, trash, security, Insurance, and much much more. In the long run I dont see this as a business opportunity I would take a chance on if I were the bank bosses.

     
  • Darrell Baumbach posted at 11:13 am on Sat, Apr 9, 2011.

    Darrell Baumbach Posts: 9403

    How about a daily farmers market... with music, cooking, and very inexpensive produce.
    In doors for the winter... outdoors for the summer...

     
  • Kevin Paglia posted at 8:03 am on Sat, Apr 9, 2011.

    Kevin Paglia Posts: 1879

    Just a thought. Why not open them up one weekend a month for central location garage sale. Families who want to sell their stuff can rent a spot for $5, $10 for larger, and then there would be one location for bargain hunters to go picking through the best deals.

    The other option is along the same lines but open up one of the lots to a flea market type place. It would put the lots to use and get some cash flowing to locals while saving other some money.

     

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