Publication Date: Wednesday, September 21, 2005
Guest Opinion: Time to move forward with an Auto Center along Bayshore
Guest Opinion: Time to move forward with an Auto Center along Bayshore
(September 21, 2005) by Bern Beecham
Some of us on the City Council and city staff have been working for years to keep our automobile dealers in Palo Alto -- and keep them healthy.
From recognition in 2002 of the need to keep our dealership to ongoing face-to-face meetings with dealers beginning in 2003, we have been committed to learning what our dealers need. In 2004, we approved and implemented specific actions to help our dealerships compete more effectively against larger, more modern rivals up and down the Peninsula.
Now the Mayor's Retail Committee is recommending that we work toward an economically vital auto center on 101 frontage, where our city's Municipal Services Center now occupies 17 acres. The council Aug. 8 directed staff to assess the feasibility of locating two or three key auto dealers on that site.
Significantly, rather than being an eyesore or blight, an appropriately designed MSC-based auto center can improve a sensitive baylands interface, offering a major improvement on the city maintenance and construction trucks that park there now.
What's at stake? Converting our MSC to an auto center can mean a difference of nearly $4 million in our budget each year. Given the revenue declines we've suffered in the recent past and the harsh fiscal realities we face, a $4 million change in annual revenue will make a dramatic difference in what we can provide to our residents and businesses.
The question is no longer, "Why should be move forward?" but "How can we afford not to?"
As usual in civic affairs anywhere, but especially it seems in Palo Alto, there are a number of myths floating around that can become real barriers. Here's the reality to some myths I've heard.
Myth 1: Our dealerships won't really move.
Nonsense. Look at Menlo Park. Every one of their El Camino dealerships is either closed or on the brink. Look at Palo Alto. Carlsen Porsche moved to 101 frontage in Redwood City in 2002. Stanford Nissan closed at the end of 2003. Anderson Honda bankrolled the opposition to East Palo Alto's IKEA in a failed attempt to move to freeway frontage there.
It's a fact of life in the auto sector that manufacturers are demanding that dealers find larger locations with better freeway visibility. Plain and simple: Our dealerships will move out if we fail to act.
Myth 2: Let them go; losing them doesn't matter.
Double nonsense. Our dealerships provided more than $2 million in sales tax revenue in 2002 and it's been dropping since Porsche and Nissan departed. Without action, we will lose the rest of this $2 million.
But an intelligently designed, successful auto center on 101 would not only reverse this loss, it could double to $4 million the sales tax revenues we receive from dealerships.
Rather than being forced to suffer successive rounds of cuts to our services, let's consider alternatives that will preserve and generate new revenues. Moreover, if our auto dealers flee to other cities, the sites they now occupy may well be replaced with commercial or housing projects, adding insult to injury by absorbing revenues rather than providing them.
Myth 3: There are other places for auto dealerships besides the MSC. Unfortunately, no. Staff and local real estate experts have looked at sites all along 101. As an example, Loral at 101 and San Antonio has been in bankruptcy and would be an excellent site for dealerships. But rather than putting the site up for sale, they've just announced they are coming out of bankruptcy and will be adding 600 jobs at this Palo Alto site. Given the multiple ownerships of the various locations, it looks impossible to assemble the acreage needed for an auto center without using eminent domain -- and that's something I (and I expect my colleagues) will never do.
Myth 4: Even if the above reasons aren't valid, we just can't put an auto center next to the baylands.
Our MSC maintains, repairs, and services the city's vehicular fleet in large industrial buildings and, for the most part, operates without creating complaints. An environmentally designed auto center could reduce the overall impacts and, moreover, improve the site's interface to the baylands. Under this scenario, the private sector would help fund the new baylands transition.
There are two additional reasons for going forward:
1) Auto experts -- and our dealers themselves -- tell us that the MSC site is the most ideally located site on 101 on the entire Peninsula. It has direct visibility from 101 without the need for overbearing signs (such as IKEA's). It has excellent access from exits north and south. And Palo Alto is the demographic bull's eye for their target customers.
2) Today we put our MSC acreage to a low-value industrial use that could go anywhere else if we had a way to fund it. In reality, there's no reason for this kind of facility to sit on this high-value freeway frontage. We can lease or purchase a less critically located site for our corporation yard needs, at perhaps half of what auto dealers will pay to lease the premier auto dealership location on the Peninsula.
As a community, let's muster the courage to move ahead. We can't afford not to.
Councilman Bern Beecham is chair of the Mayor's Retail Committee, a mix of neighborhood leaders, business persons, developers, other citizens and city staff. He can be e-mailed at bern@beecham.org.
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