Encinitas considering $9.5M purchase of car dealership
By: ADAM KAYE - Staff Writer
ENCINITAS ---- Public Works Department Director Phil Cotton is recommending in a report that the city spend $9.5 million to purchase the Mossy Chevrolet Dealership on Calle Magdalena for a public works center.
If approved Wednesday by the Encinitas City Council, the purchase would bring an end to a years-long search for a new location for a public works facility.
Property owner Philip Mossy approached the city last month to negotiate a sale.
The department of 56 employees lost its home on Cornish Drive in 2004 to make way for a library, and since then has operated on leased space at the former Pacific View Elementary School campus.
A purchase agreement attached to Cotton's report calls for a 60-day escrow, which means the city could take possession of the 4.4-acre car lot well before Dec. 1, when the department's $1-a-year lease expires at Pacific View.
Cotton has said the dealership just east of Interstate 5 and south of Encinitas Boulevard would be an outstanding spot for a public works yard. He could not be contacted Friday.
In May, Cotton gave the council a $9.3 million estimate to build a public works facility on 4.6 acres. The estimate did not include land costs, nor did it identify where the facility would be located.
In his report, he states that the dealership could be occupied with minor modifications. Cotton is requesting that the city set aside $100,000 to purchase vehicle lifts, portable buildings and furniture.
The Encinitas lot is one of nine Mossy dealerships in San Diego County, according to the company's Web site. A Mossy Nissan also operates in Houston. Philip Mossy, who owns the Encinitas lot, did not return a telephone message Friday.
Most of the lot is paved and covered with shiny, new automobiles.
The property is zoned for commercial uses and includes 16,927 square feet of offices, covered work and storage areas, service bays and an employee locker room. Outdoor parking and storage space totals 182,373 square feet.
"It looks pretty darn good to me," Councilman Dan Dalager said Friday.
A City Hall watchdog disagreed.
Bob Bonde of the Encinitas Taxpayers Association said Friday that removing a car dealership from the city's tax base was preposterous.
"That (public works) yard could go anywhere in the city," Bonde said, "and most communities would kill to have a dealership because of the amount of sales tax they generate."
Quarterly sales tax reports prepared by a consulting firm show automobile and transportation enterprises as the city's second-biggest sales tax generator, behind general commercial goods.
In the fourth quarter of 2005, the most recent period for which data is available, auto sales comprised 16 percent of sales tax receipts, according to a report produced by HdL Cos., a Diamond Bar firm.
Mossy Chevrolet appears regularly in the company's reports as one of Encinitas' "Top 25 Producers."
State laws prohibit the city's disclosure of sales tax receipts from individual businesses.
Mossy Nissan is one of five automobile dealers that belong to the Encinitas Chamber of Commerce. The others are Encinitas Auto Sales on North Coast Highway 101; Encinitas Ford on Encinitas Boulevard; Harloff BMW on Encinitas Boulevard and Herman Cook Volkswagen on Encinitas Boulevard. Another dealership, Cardiff Classics, sells used cars from a lot on South Coast Highway 101.
According to Dalager, Mossy was preparing to close the Encinitas lot before he approached the city with an offer to sell it.
"We were going to lose the tax base one way or another," Dalager said.
Bonde also raised concerns about soil contamination at the site, which has been used for a car lot for more than 10 years.
The purchase agreement obligates Mossy to remove any contamination or underground tanks at his expense.
"We have an environmental consultant out there," Dalager said, "and anything that's not up to snuff will be the seller's responsibility to take care of."
Will there be a plaque with the council's names?
ReplyDeleteJP- Thank you so much for making me laugh my ass off. When I hit the link for Dalager's "Darn Good", I laughed so hard I pissed alittle. Thanks for making my day!
ReplyDeleteI think this is a great deal for the city. Why is the ETA opposed to this? Is it all of ETA or just one malcontent (Bonde) that claims to speak for them. I fail to see why this isn't a great deal.
ReplyDeleteThis deal is very, very bad for the taxpayers.
ReplyDeleteConsider that business similar to anyone having a job. Lose your job, lose your income. It is the same with the city - lose the business, lose the income. The number one rule in managing a city is don't take a good commercial property out of the commercial land pool. That income is the income of the city government.
How will the city make up the lost income? Additional property taxes, parcel taxes, fees will be stuck on each parcel in Encinitas. Is that a good deal?
What interesting information is in the agreement between the city and Mossy. Dalager said Mossy approached the city on buying the property.
ReplyDeleteThe agreement has the city threating eminent domain. Which occurred - voluntary or eminent domain?
How does a threat of eminent domain affect the amount of taxes Mossy will pay on this transaction?
Why was this section 5.3 put into the sales agreement?
5.3 Eminent Domain. Buyer represents and warrants that the sale of the Property by Seller
is being made under the threat of eminent domain as an ‘involuntary conversion’ as defined in the Internal Revenue Code, Section 1033. Buyer agrees to reasonably cooperate with Seller, to the extent permissible by law and at the expense of Seller, in the execution and/or preparation of
documents (as may be required by the IRS or California Franchise Tax Board) to verify the terms of the sale and the nature of the sale as an involuntary conversion under the threat of eminent domain. Buyer’s obligation as described herein shall survive the Close of Escrow.
It's been difficult to pull laughs out of the public works yard topic, so thanks.
ReplyDeleteOh my God. That is very interesting about the threat of Eminent Domain being written into the sales agreement.
ReplyDeleteThis should have been disclosed at the Council Meetings, and also would have been great to have been included in the NCT article.
Whenever one of this city's founding father's brings up more of City Council's underhanded dealings (in closed sessions with "private property negotiators," or other loopholes that allow for these "backroom deals"), then somebody, probably on Council, or a developer, or other close friend of Council, like a lobbyist, chimes in and labels our friend, Bonde, a malcontent, or worse.
Yes, if any of the watch dogs attempt to alert the public to what's going on, we are called "whiners and complainers" by the likes of Christy Guerin, and now, her buddy in opposing the Coastal Commission, Dan Dalager.
Also, there is too much pressure going on, here. Council already admitted that the deadline for the lease renewal at Pacific View is no big deal, as there are no immediate plans for development at that site. The former superintendent who was pushing for a spaceship style designed commercial enterprise, which the neighbors abhorred, resigned, thank God.
We are being sold a bill of goods here, folks. Don't be lead around by bunch of no-nothings, and deceivers, who twist and twist the truth.
Bob Bonde knows what he is talking about, and has been here for a very long time. He helped us to get organized to incorporate and is an educated, compassionate man.
Our Council is once again trying to pull the wool over our eyes, allow the dirt to be piled along the tracks, all the while patting themselves on their pretentious backs.
This is too much to spend for something that is not necessary for 54 employees, when a huge Lease Revenue Bond will have to pay for it, at our expense.
Per the article:
ReplyDelete"That (public works) yard could go anywhere in the city," Bonde said.
So Bonde wants to place a public works yard next to his house in Cardiff?
NOT BLOODY LIKELY, MATE!
He probably means the city can put next to YOUR house "anywhere in the city". That must explain why the good people of Saxony and the good people of Quail Gardens Drive have been so pleased that site's on there streets were identified as probable locations for it!
Come on blogger's, email the city real quick and volunteer YOUR residentially (or trailer park?) zoned neighborhood for the new public works yard location! Voliunteer's? Volunteer's?
According to general Bonde we must quickly offer up our residential neighborhood to protect the sanctity of the FORMER car dealership commercially zoned site that WON'T BE A CAR DEALERSHIP anymore whether the city buys it or not!
To quote jonny taco: IDIOTS!
Hey,
ReplyDeleteDon't I remember Gil saying that the reason the city is dorking around now trying to figure out where to place a public works yard is because the original people who incorporated the city FAILED to plan a space for one?
And doesn't Bob Bonde claim to be the main force behind incorporation?
So now he's a critic of a rational solution to his past failure?
WEAK
Maybe Mr. Bonde will tell us EXACTLY where "anywhere in the city" is?
ReplyDeleteIt's put up or shut up time.
The sewer plant on Manchester.
ReplyDeleteThe point is that the City is taking prime commercial land for its own use -- that land could generate millions of dollars of income for the City. There are other sites available which are not in prime commercial locations or in someone's backyard. Why threaten eminent domain -- that is a real stinker!
ReplyDeleteNo one said the City council was a brain trust. Obviously, taking prime commercial land to store asphalt, concrete, dirt, etc. is the best idea ever. Why put a public works yard on land that is neither desirable for a neighborhood nor in a prime commercial zone? That would obviously not make any sense -- it is clear that the City simply wants to spend and spend and spend...
ReplyDeleteHow did Dan Dalager's persona slip through voter scrutiny?
ReplyDeleteHow about putting tyhe yard on 8 acres the city owns on Quail Gardens?
ReplyDeleteHow about the Sands Trailer Park?
How about the old dump off of Encinitas Blvd?
How about the San Elijo Lagoon?
How about the land near I-5 and Manchester?
Lots of options.
I agree with Bonde on many issues but not this one. I do not think that the ETA has come down one way or the other on this.
ReplyDeleteIf Mossy cant make it there as a car dealership, no one can.
Where else can we find a ready made facility that the city does not need to screw up on construction over runs?
The bigger issue is the price. Would that site sell for that price to another user that is not auto related?
Does anyone know for sure the reason this business is closing? It may not be for lack of sales.
ReplyDeleteThe dealership probably wouldn't sell for that much money as a dealership. Selling it for another use would probably bring in less money, IMHO.
Is the city giving a sweetheart deal by throwing in a few extra million dollars?
The council will make it up with extra fees. The reduced sales tax income will be made up with the RDA that will be formed to stop the money hemorrhaging.
How can this council bankrupt a city so fast.
We live in a parallel universe.
ReplyDeleteThis week the Palo Alto city council will consider the opposite of what is proposed in Encinitas. During the last six years the city of Palo Alto has lost a million dollars in sales tax and 2 of their 7 auto dealerships.
That council will study moving their public works and several departments from a prime 16 acre property in order to build an auto mall row. One of their options is to move the city services to smaller, separate properties.
What a thought. Perhaps as I've blogged earlier we can move them to the Hall property in circus tents to protect the equipment. The admin types can go to city hall or use the deck on the new library.
ReplyDeleteIf we need repair work on the vehicles we can contract iot out. Jiffy lube can change the oil.
Why do we need a 10 million dollar maintenance yard? I know to keep up with the firemen who are getting 10 million dollar fire stations. They also want to keep up with the citizens who are gettinga 20 million dollar library.
THROW THE BUMS OUT
What Would Sandy Mossy Do?
ReplyDeleteMOSSY NIIIISSAAAAN!
MOSSY NIIISSAAAAN!
MOSSY NISSAN MOOOOVES YOU!
No one is answering the question about the threat of eminent domain.
ReplyDeleteI think most of the "anit-bonde" posters are one and the same person, likely a relative of Bossypants Guerin, or a fellow lobbyist, or a deep pocket developer friend of Guerin.
$10 million seems excessive, to me. This is not an either/or situation.
When a huge commercial development was threatened at Pacific View, the neighbors rose up, en masse, to protest, meeting at Paul Ecke Central, writing letters to the editor.
I haven't heard one peep of complaint about the Public Works Yard being located there. The question is not a "not in my backyard," issue. Don't twist the facts, making Bob Bonde responsible for the mistakes of the early City Councils. He helped the City to incorporate, but was not on Council, ever, as far as I know.
Why can't there be several smaller yards? Why the big rush when Pacific View is working fine, for now, as Council has admitted.
Real Estate prices are going down, not up, now. People, don't be fooled by those who would use this blog for their political purposes, to mount a twisted campaign of spin and disinformation.
Back from the desert. Hot and smokey. You don't really appreciate fire as a threat until you've seen a big one and the effort it takes to bring it under control.
ReplyDeleteWhen you lose your job and your income you find another job, retrain, start your own business, or whatever. Times change and people change and go through changes. When Clark foam abandoned ship Jp probably struggled but he's still shaping. Nothing's set in stone or foam.
The number one rule for managing a city is to make it a place the residents want to live and a place where residents from other cities think you are lucky to live in your city. How will the city make up the lost income, they may not. Is it the end of the world, I don't think so. Additional property taxes, parcel taxes, I don't think so. Property tax income increased almost nine million last year as property that changed hands, or was upgraded was reassessed.
The threat of eminent domain and section 5.3. It is my understanding that involuntary conversion under IRS section 1033 provides some IRS tax breaks to the seller. It is my understanding that this was the case with the hall property as well.
Is jiffy lube going to change the by-pass pump on the vac machines or perform any of the other operational maintainance(PMS) services on the fleet? I had my oil changed at a quick change place a couple years ago and they forgot to replace the gasket on the drain plug and i fried an engine.
I love Bonde but I don't always agree with his ultra conservative financial position.
Been gone five days and I don't see any solid recommendations for
siting the PW yard. Mr cotton did say that the plant on manchester cold provide some relief, but to be honest i like to think that the sewer plants of tomorrow, with their methane by-product will power turbines that we will use to charge out battery powered vehicles when we all come to the realization that petroleum is not a re-newable resource and that methane producing sewage plants are unless everyone stops eating and shitting. Look to the future, think about how your going to function in ten or twenty years after I'm fertilizer. I thought the ETA was correct on the clean water "fee". This was an obvious tax being placed on everyone property. This PW yard is not going to place a tax on anyone property, not without a vote and it would never pass a vote. This piece of property will belong to the city, if they decide at a future date to change it back to a vehicle dealership, they can. I do know that Mossy tried to buy out the ogee pizza lease(owner said no) so that the envisioned development could include that piece of property also. I'm just not sold that this isn't a good deal for the city and it's citizens.
Also a redevelopment district does not increase city coffers, only developers and rda officials wallets so an rda isn't going to stop any percieved hemorrhaging only make it worse for the city.
Council meetings tomorrow night so any more thoughts are appreciated.
Wow, the threat of eminent domain is a tax ploy. Does this mean the city will be falsifing documents to the IRS for this tax ploy?
ReplyDeleteWhat do you call the 25 million dollars bond the council wants to pass without a public vote? Chump change?
ReplyDeleteno. It means it's a friendly condemnation. the seller may or may not be giving up something of greater or lessor value that some city wants and could consider condemning. everyone says bob hall could not have sold out to wal-mart because the coastal commission would not allow the traffic west of I-5. BUT if walmart had brought the entrance in across the mackinnion bridge it would not have impacted the coast. does wal mart have the kind of money to pull something like that off? Do chickens have wings? the city wanted the park land, bob was ready to sell and no other ag operation wanted to buy. it was an involuntary condemnation, same with the mossy property. mossy does not want a car dealership there, no one else offered him a price for a car dealership there and he was exploring other mall/office building type options. mossy wants to exit the property, the city wants the property so we have an involuntary condemnation as a means to reach an end both parties desire. seems pretty basic. will mossy make more this way, yes. is the city getting a good deal? was the hall property a good deal? think the city could bail out of the hall property and sell to some developer and recoup the cost including the bond money? i think so. is the mossy property a good deal? seems like only time will tell to me. would i rather see a PW yard there instead of some mall or office complex as far as traffic and community impact are concerned? yes, unless someone has a better idea than circus tents on the hall property or small service yards in residential neighborhoods. was bonde involved in the construction of the zoning matrix, i don't know. Bonde was against the county of san diego taking all our property tax and commercial revenue money and not returning it to the community. this is why he was a leader in the drive for incorporation. he wanted local control over the revenue. and the projected bond issue isn't chump change but it also won't show up on your property tax bill. it's a lease revenue bond NOT a general obligation bond! There is no way a GOB is going to pass in this or most cities. someone said there are other ways to fund capital improvements programs, "like our city used to", but no one has come forward to address what that method is or was. speak up folks if you have a better plan for city improvements. my wife thinks we should become energy independent and more enviromentally friendy by bringing back horses. needless to say, she and i are not on the same page of that book! it's the 21st century not the 19th, things are going to change but they don't have to destroy the communities we live in. computers, cell phones and the list goes on and on, the tools we use to live our lives are not the same tools at our disposal 15 years ago. times change and are going to keep changing, ats a fact.
ReplyDeleteGil,
ReplyDeleteThank you for that government economics lesson. The council can borrow and borrow but it won't affect the property owners. All those stories about life and hard scrapple are just fiction. Yes, toast Mr. J. Cricket, he doesn't know about government borrowing. The ant and the grasshopper story - not true. The council can fiddle for years, then borrow on nothing. Property owners will never have to pay for this council's blatant mistakes. It's free money. Borrow, dont't worry about tomorrow.
A better plan:
ReplyDeleteGet rid of the city manager, the city attorney, and the finance director. Find people with some fiscal responsibility.
I understand Gil's sentiment on GOB, but I don't yet feel comfortable adopting his view. Here is why.
ReplyDeleteThe voters wanted a high mark for bonding. That is what is required, so we shouldn't cheat around it with a Lease Revenue Bond. Californians want to make sure that government officials have to make a great case for going in debt and that case should be taken to the voters for a smell test. That's the system and I think there is good reason to keep it.
Going in front of the voters would be a great exercise for this council because I believe the council would be forced to ensure that the plan for the Hall Property will be something most people want.
My guess is we would get a very responsible and widely accepted plan for the Hall Property development if the City makes this go in front of the voters. I’ll also bet the amount of the bond would be much more contained.
And if voters don't want to bond for it. Then the voters don't want to bond for it and we should recognize that. I don't think it would happen, but if we had to we will build step-by-step over then next decade.
k cummins is on it. The citizens are being circumvented in a financial adventure that will have long range consequences for all of us. We should have input. He is so right that each project will be heavily scrutinized and tempered prior to exposing it to voters.
ReplyDeleteSorry Gil, but you just have to have a little more faith in the democratic process. When the leaders become unacountable and careless, then the people must speak.
ReplyDeleteWhoaaa! The library, Prop A, Prop C, all were voted on by the people. The library got voter approval and A and C did not. The council meetings are open to the public every wed night. I wouldn't go if I didn't think have faith in the democratic process. The leaders are accountable every four years and two of them are up for re-approval or replacement this year. You the citizens elect them, they are not appointed, this is the community's chance to speak up. and economics and land use availability trends would seem to indicate if you don't borrow and complete projects in 2006 dollars it will just take more 2016 dollars and the taking of property to build the city infrastructure necessary at a later date. As i told kevin last night, i don't care how well you craft a GOB it is highly unlikely that it will pass with the 2/3 vote necessary. I do worry about tomorrow, that's why it may be necessary to borrow today. Still no one blogs about how they used to do it in the "old days". Don't go back too far otherwise it's pre prop 13 and rising property taxes to pay for projects drives everyone but the very rich out of town. how we doin on council candidates, i'm under-whelmed so far.
ReplyDelete