Menlo Park could lose auto dealer, consultant's report says Menlo Park could lose auto dealer, consultant's report says (December 01, 2004)

** With a lease expiring at Cadillac Buick Pontiac GMC of Menlo Park, city officials face a challenge to keep dealer in town.

By Rebecca Wallace

Almanac Staff Writer

A consultant's report says the need to find a new home within the city limits for Menlo Park's auto dealers has grown more urgent, as one dealer has been looking at moving to another city.

The November 23 report by Keyser Marston Associates Inc. of San Francisco focuses on Cadillac Buick Pontiac GMC of Menlo Park, saying, "The timing for the relocation has become even more pressing as one of the leases on the auto dealership property is near expiration."

The report says dealership officials "have informed the city that, unless they are able to secure another site relatively soon, they may consider the possibility of closing their current Menlo Park operation."

The report adds that they are "exploring potential relocations to sites outside of Menlo Park" and have had discussions with Redwood City officials.

According to the report and to the statements of several Menlo Park city officials, all of the city's four dealerships have voiced concern about their lots on El Camino Real, saying they offer limited storage space and are difficult for customers to find.

The dealers are among the city of Menlo Park's top nine revenue producers because of the sales-tax revenue they bring in, city business development manager David Johnson has said. But sales have been on the decline in the weak economy, and location could also be a factor.

Phil Dirickson, the acting general manager of Cadillac Buick Pontiac GMC of Menlo Park, said he could not comment on the dealership's leases or plans to move out of the city, but stated that General Motors Corp. is "committed" to staying in the southern San Mateo County-northern Santa Clara County area.

A Keyser Marston official did not return a phone call for comment on the report.

Cadillac of Menlo Park at 1300 El Camino combined with the Menlo Park Buick Pontiac GMC dealership at 550 El Camino early last year, when Cadillac of Menlo Park owner Richard Mugnolo expanded his business. He has since retired, Mr. Dirickson said.
Not surprised

Despite the urgency contained in the consultant's report commissioned by the Menlo Park City Council, Mayor Lee Duboc said nothing in the report was surprising and that she was already aware of the danger of losing dealerships to another city.

"We've got competition," she said. "That's why we have made this a priority for David Johnson to be looking into."

As requested by the council earlier this fall, the report studies several sites in Menlo Park's light industrial area of Haven Avenue east of U.S. 101. Ms. Duboc and other city officials say the area holds promise for an auto-mall configuration because it has large lots, easy freeway access and visual proximity to 101.

Currently, the area has a mix of businesses, including security, flooring and hardware businesses, dog and cat kennels, a large FedEx office, and an insurance agency, plus many "For Lease" and "For Rent" signs.

Saying the area has potential for redevelopment, the council has expressed interest in expanding its zoning. Currently, the zoning allows only industrial use such as light manufacturing, research and development, offices and limited retail sales.

Some residents have voiced interest in attracting a hotel to the area.

The consultant's report analyses several possible sites in the area for an auto mall, each with pros and cons.

For example, a 7-acre site south of Marsh Road would be the "simplest" solution and one with the least cost, but it could probably only hold two dealerships, the report states. A site north of Marsh contains 9 acres, but it would require relocating FedEx, the largest tenant.

In addition, the report raises some concerns that the high land costs in the Haven Avenue area, which estimates put at anywhere between $25 and $80 a square foot, might be too pricey for auto dealerships. The city might have to use some of the sales-tax revenue generated by the dealerships to cover the gap, the report states.
INFORMATION

The council is scheduled to discuss the consultant's report and give direction on what to do next at its November 30 meeting, which begins at 7 p.m. in the council chambers at 701 Laurel St. To read the report, go to www.menlopark.org, click on "City Council," and go to the November 30 agenda.

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