By Nick Diamantides
Living up to its reputation as one of the most business-friendly cities in California, Signal Hill has agreed to loan $700,000 to a local automobile dealer to help pay for renovations designed to increase sales. The loan, which will be made to the Boulevard Buick/GMC dealership, will actually come from moneys held by the Signal Hill Redevelopment Agency (RDA), whose funds are separate from the City’s General Fund and other operational funds.
The loan was approved by the members of the RDA (all of whom are also the members of the Signal Hill City Council), during the Tuesday (July 20) meeting of the council and RDA.
“Boulevard Buick/GMC is requesting approval of an Owner Participation Agreement, which would result in a loan for an extensive renovation of the exterior and interior of the dealership to implement General Motors requirements,” said RDA Executive Director (and City Manager) Ken Farfsing. “The agreement (also) provides assistance for moving the Boulevard Collision Center to 2800 Cherry Avenue, including offices, spray booths and a shop building.” Farfsing added that the dealership will also be renovating its signs. “This assistance enhances the viability of Boulevard Buick/GMC in a very distressed auto market and strengthens the Signal Hill Auto Center as well,” he noted.
The RDA and the City began the Signal Hill Auto Center project in 1989 on 42 acres along Cherry Avenue and Spring Street. By 2002, six Long Beach automobile dealerships had relocated to Signal Hill. Among those was the Buick/Pontiac/GMC dealership owned by Jim Willingham that has since dropped the Pontiac brand and added two partners: Brad Willingham and Ron Charron. That dealership was relocated to 2800 Cherry Avenue and has remained there ever since.
Elise McCaleb, redevelopment manager, reminded RDA members that in July 2009, Long Beach Chrysler, adjacent to the Boulevard dealership in the Signal Hill Auto Center, went out of business. Soon thereafter, Boulevard made arrangements with Mike Salta, who had a long-term lease on the Chrysler dealership site, to expand Boulevard’s used-car business there. “Eventually, Boulevard was able to negotiate a long-term lease of 2800 Cherry Avenue (the former Chrysler dealership site) with Mike Salta,” McCaleb noted. “Entering into this lease will allow Boulevard to move the collision center back to its original location and expand its showroom at 2800 Cherry Avenue. The facility will be renovated to comply with General Motors’ new theme for the Buick/GMC franchise.”
McCaleb noted that the RDA will disburse the $700,000 loan in three installments, beginning with a $350,000 installment to be provided on the effective date of the contract Boulevard signs with the contractor who will do the renovation work.
“The timeframe for completing improvements to the collision center is 180 days from the effective date,” McCaleb added. “The timeframe for completing the construction of the improvements to the dealership is two years from the effective date.”
McCaleb noted that the $700,000 loan will not even cover half of the estimated $1.9 million that Boulevard will spend on the renovations, and loaning the money to the dealership is a good way to invest in the future success of the entire Signal Hill Auto Center. “The agency is encouraged by GM’s resurgence back into the marketplace,” she added. In recent months, Buick sales have been attracting younger buyers. In fact, Buick is the fastest growing major brand in the industry.”
Charron backed her up. Speaking briefly to the RDA members, he noted that during the first six months of 2009, Boulevard Buick/GMC had sales totaling $6.5 million. During the first six months of 2010, the company had sales totaling $12.2 million and most of those were of the Buick product.
In a separate action, the city council authorized Chief of Police Tom Sonoff to work with the Signal Hill Honorary Police Officers Association to raise funds for reinstituting the Police Bicycle Patrol Program. The estimated cost of the bike patrol is $7,000 per year, but due to budget restraints city funds are not available for the program. The money would be used to purchase bicycles and train and outfit four police officers and two volunteers.
The next meeting of the city council is scheduled for 7pm, August 3, in the council chamber of Signal Hill City Hall.