General Motors' plans to build a Menlo Park auto mall have been put on hold.
A GM spokesperson said the automaker is still committed to building an auto mall on Bayfront Expressway at Willow Road, but due to slumping auto sales and an uncertain economy, the project isn't going anywhere quickly.
"We're still in discussions with the city, but the market's changed," said Susan Garontakos, dealer and field communications manager for GM. "We don't have any definitive plans for the site right now."
In October 2006, GM came forward with its proposal to build an auto mall at the property, which was then part of the Tyco Electronics campus. The project includes plans for 8.5 acres of the property to be allotted for GM dealerships, and the other 13.5 acres designated for non-GM dealerships or other retail uses.
GM officials said if all went well, the GM dealerships would be up and running by late 2008, but that doesn't look likely.
"It's a completely different environment in the industry and the economy right now compared (with) several years ago," Ms. Garontakos said. "We want to make sure [the auto mall is successful, and that means doing this right." She said GM currently has no timeline for the project.
Last year, GM officially purchased the property from Tyco for "in excess of $20 million," according to Menlo Park Business Development Manager David Johnson.
He said planning an auto mall is no easy feat, as GM has to draw independent dealers (both GM, and non-GM) to the site. But he said he's still confident the automaker will make its plans a reality.
"I fully expect them to see this project through," Mr. Johnson said. He noted that GM has "bigger issues" to take care of at the moment, including reports of a multi-billion dollar deficit for its 2007 fiscal year, and possible production cuts due to striking workers at auto part factories.
Tax sharing deal
The previous City Council voted unanimously in November 2006 to approve an agreement with GM that would evenly split -- between the city and GM -- the sales tax revenue generated from GM auto sales at the auto mall.
Under the deal, the city would share sales tax revenues for 15 years, or until GM receives $10 million. At the time, GM estimated first-year sales tax revenue from its dealerships at $1.5 million, meaning the city would get $750,000.
The auto mall project still requires environmental review and approval by the City Council.