California developer cements deals for creation of Carson City Auto Mall

Helped by a healthy financial incentive package from the city, a California development company announced its plans Tuesday to locate a 100-acre auto mall in northern Carson City.

Princeton Development Corp., developers of a successful auto mall in Roseville, Calif., has selected a site along the path of the future freeway bypass at Hot Springs Road and East College Parkway.

The mall, expected to cost nearly $50 million to build, will not open until the completion of the first section of the Carson freeway bypass set for 2006.

So far, the developer has obtained letters of intent from Michael Hohl, Dick Campagni and Jeff Woodward, owners of 12 Carson auto franchises. The letters are not legally binding but signify their intention to vacate existing lots and open new stores in the mall, said Steve Taber, chairman of the board for Princeton.

The stores expected to make up the new site will include Ford, Toyota, Mazda, Hyundai, Honda, Subaru, General Motors, Jeep/Nissan, Buick and Cadillac. Other deals with Chevrolet and Chrysler/Dodge dealers are in the works, Taber said.

Taber and the city expect Carson auto sales to increase dramatically once the mall is in place.

"We think that Carson City is a natural place for an auto mall," Taber said. The city has a strong dealer group, supportive city management, a new freeway with accessible land next to it and a market where there is potential for growth, Taber said.

"We want Carson City to become a major retailer for automobiles."

City consultant Charlie Long said the city began working with Princeton two years ago to find a suitable place for the auto center. Existing auto dealers generate about $3.7 million in sales tax revenue for the city per year and make up nearly 20 percent of the city's total take in sales tax income.

The dealers, already pressured by manufactures to update their facilities, are also facing the fact that the future freeway will redirect traffic away from existing dealerships and force them to move, Long said.

After Gov. Kenny Guinn made public his commitment to finish the freeway in January, the auto mall discussions solidified, Long said. Some dealers were already talking with Douglas County officials to relocate to open land across the border, he said, which hurried the process.

"Suddenly things got real serious," he said.

The city has offered a substantial incentive package to get the project moving. In the offer, the city would contribute $11.2 million toward public improvements -- about $1 million per year -- and $4.2 million to relocate auto dealers to the new site.

The city has also offered to cap its sales tax revenue income from auto sales at pre-auto mall levels, adding in inflation and the cost to finance the public improvements. New sales tax revenues that are realized above that will go back to dealers until the amount paid to dealers reaches $12.1 million.

The city doesn't expect to benefit from revenue increases from the project for seven to 20 years as a result, Long said.

"The purpose of the package is to give auto dealers a little playing field," Taber said.

Letters were sent to 140 property owners in and around the site who were invited to meetings Tuesday and today with city and developer representatives to talk about design issues and concerns.

Tona and Mary Smith, business owners in the area, attended an open meeting Tuesday and were concerned that some of the property poses safety issues for the airport.

The land is made up of several parcels, some managed by the Bureau of Land Management to the north, some owned by the airport to the east, three parcels along the freeway owned by the state and other parcels that are privately owned. The Langston family owns some of the land.

The Smiths said they were worried that successful past plane crash landings might end tragically in the future if an auto mall is built.

The developer said the land will not be fully built out and pieces near the airport might be restricted because of federal aviation restrictions. So far, the site will hold 192,000 square feet of buildings and may expand if other dealers outside the area are drawn into the project later.

Residents are invited to a meeting tonight at 5:30 p.m. in Conference Room 12 at 2621 Northgate, in the University of Nevada, Reno, extension office.

The project will be designed around neighborhood concerns, Taber said.