Auto dealer Michael Hohl is planning to build a new dealership on the south side of Carson City, but he might have to do so without the same kind of financial incentive the city gave another major auto dealer.
Hohl, who owns three auto dealerships and an RV center in Carson City, wants to build a new Honda and Subaru dealership on South Carson Street near Sonoma Street. It is planned to be built on about 7.5 acres of open land south of Craft Market.
He said he decided to relocate the business because he needed a bigger, better dealership for his customers.
The move also will put the business in a row of auto dealerships on South Carson Street that will be ready for traffic once the freeway is done and the economy picks up, he said.
"We're certainly bullish on the car business," he said, "and we're bullish on Carson City."
Hohl bought the property for $4.5 million in 2005 from Reno-based Hometown Health Providers, according to city records.
It is not clear what Hohl will do with his current Honda and Subaru dealership built in 1982 at 4500 N. Carson St. once the new dealership is finished.
Paperwork for the project submitted to the city included plans for a 24,000-square-foot Honda building, a 19,200-square-foot Subaru building, a 655-space parking lot, a show room, a repair area and a customer lounge.
The city will do a preliminary review of the plans later this month.
Hohl might have submitted those plans, however, under the assumption that he would get a financial incentive for doing business in Carson City.
The city gave auto dealer Dick Campagni a $3.6 million incentive in 2005 to buy land on South Carson Street for a new Toyota dealership under an agreement in which he also promised to keep his four dealerships in Carson City for at least 15 years.
Several million dollars have been set aside in the city's budget for a similar deal with Hohl, and Supervisor Richard Staub said he is close to reaching an agreement with the auto dealer.
A "framework" for the incentive will probably be done by the end of the week, Staub said, and he hopes to have it ready for a vote by the board of supervisors in December.
Hohl said he's worked with the city for about seven years on an agreement that will give him a small part of the sales tax revenue his business generates. He said he's confident the city won't back out of the agreement, which will help pay for some of the land and relocation costs so he can start construction on the dealership next year.
Auto sales are the largest source of sales taxes for the city. Hohl and Campagni own the biggest auto dealership businesses in the city.
But Supervisor Robin Williamson, head of the redevelopment authority, said a slow economy that has already forced the city to cut millions of dollars from its budget won't allow for another large incentive similar to the one Campagni received.
"Those days are gone for a while," she said.
The city "certainly hopes he stays here," she said, but it simply does not have the money this year to give him the kind of deal he might have expected.
She said she might vote for a sales tax rebate agreement, but only if it doesn't provide any money up front.
Hohl has the right to build a dealership in Douglas County rather than in Carson City like he hinted in 2007 he might do, Williamson said, but auto dealerships aren't generating tax revenue like they used to.
The slow economy has hurt auto sales more than the average industry in Carson City, according to the Nevada Department of Taxation. Sales at dealerships were down over 15 percent for fiscal 2007 compared to fiscal 2006. The first month of fiscal 2008, July, was worse than that.
Auto sales were down more than 26 percent that month compared to the same time a year before.