7C New Business 2000 0306 - Laserfiche WebLink

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• Ford Land Development Company 2 February 29, 2000 1111 Marina Boulevard Marina Boulevard, adjacent to Marina Square and across the street from the Auto Center, was identified as a key opportunity site for new car sales. Chovanes Ford, a long-time San Leandro business,had expressed interest in relocating its dealership to Marina Boulevard. Several developers attempted to work with the owners of 1111 Marina Boulevard to secure the site for Chovanes Ford. Unfortunately,they were unable to gain site control. Ford Motor Company saw the benefits of relocating Chovanes Ford to Marina Boulevard and began to work with John Chovanes and Dave Erikson, the owners of Chovanes Ford, to move their dealership. During those discussions, it was determined that the current owners of the dealership wanted to sell the dealership as part of the relocation effort. Chovanes and Erikson entered into negotiations with the Mossy Group, a family-owned Ford dealer based in San Diego. Those negotiations have successfully concluded with a"buy-sell" agreement between the two parties. The Mossy Group will assume ownership of Chovanes Ford sometime this Spring and will operate the dealership from its current location for the next 12-18 months while the new dealership is being constructed. In addition to retaining a long-time San Leandro business, the relocation to Marina Boulevard is expected to double the current car sales on East 14th Street. It should also be noted that the Chovanes family will be selling its East 14th property to San Leandro Hospital for expansion needs. DISCUSSION Ford Leasing Development Company has entered into escrow for property acquisition and has agreed to pay$6.1 million for the property at 1111 Marina Boulevard. This agreement is contingent upon assistance from the Redevelopment Agency to write-down the cost of the land to$3.1 million. The write-down from the Agency will allow Ford to move forward with the construction of a new Ford dealership, estimated at $4 million in design and construction, and to lease the facility to Chovanes Ford. The Agency's assistance will be provided to the dealership as an annual payment to write down rent. The assistance will not be provided directly to Ford Motor Company. Chovanes Ford currently generates $277,000 in sales tax. The Ford Motor Company is projecting $90 - $100 million in sales at the Marina Boulevard location. Resulting sales tax to the City would be $850,000 to $950,000 annually. The increase in sales tax to the City is based on the improved location and enhanced dealership resources. 3q a