An agreement between Carson City and two local auto dealers expired this month without achieving its goal: the development of an auto mall or auto row in the city.
The city's car-dealer incentive program was sparked two years ago after car dealers Michael Hohl and Dink Cryer bought 144 acres in northern Douglas County to potentially develop an auto mall. The pair purchased the land adjacent to Highway 395 for $14.6 million. It remains undeveloped. So far, neither auto dealer has signed a development incentive program with the city.
City officials say if Hohl's GMC, Honda and Subaru dealerships, and Cryer's Carson Dodge Chrysler, leave Carson City that would dramatically reduce the taxable sales collected from the automotive sector. In fiscal year 2005, $320 million in taxable sales was collected from the sector.
City Manager Linda Ritter said Carson City has been unable to develop an auto mall project with car dealers, but she said talks will continue despite the sunset of the agreement.
"Unfortunately it has been a challenge," she said. "It takes a lot of property to create an auto mall and that's something we don't have a lot of. But we still want to work with auto dealers."
Hohl and Carson Dodge Chrysler have been free to move their dealerships to Douglas County for the last year, according to the agreement. If the car dealers have any plans to do so - they're not talking. Cryer and Hohl could not be reached for comment.
Ritter and Economic Development/Redevelopment Manager Joe McCarthy said the big, unanswered question is what the two auto dealers will do. Neither has moved, but they haven't partnered with the city yet, either.
Hohl and Cryer planned to sell 100 acres to developer AIG Baker, but the deal fell through in mid-September.
"It's a business decision," said Ritter. "They have to make the best business decision for their company. (An agreement with the city) comes with a commitment. The agreement is for 15 years and that locks them in. Sometimes businessmen want more flexibility."
The only car dealer so far to partner with the city on a redevelopment incentive deal was Dick Campagni.
Carson City sealed a deal with Campagni, owner of four Carson City dealerships, last month that provided a $3.6 million incentive for him to buy six acres on South Carson Street for a new Toyota dealership.
The incentive is based on up to 20 percent of what the expanded Toyota dealership will generate in sales tax. The promissory note is similar to a term loan with a 5 percent interest rate payable over 10 years. He must also commit to stay in Carson City for up to 15 years and grow his business.
The redevelopment manager said an agreement and incentive package for Hohl is forthcoming.
"Two years later, we're still attempting to identify sites that would make sense for Michael Hohl to locate from North Carson Street to South Carson Street," said McCarthy. "We continue to have a cordial and substantive conversations with Mike (Hohl) to identify those sites."
That could be one reason why the car dealers' land in Douglas County has not yet been developed.
"I'm extremely optimistic that we'll have a new Honda and Subaru store in the planning stages in the calendar year of 2006," McCarthy said.
-- Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.