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Norco, Firm Complete Auto Mall Agreement : Deal Could Bring 3 New Businesses to City in High-Stakes Battle Over Car Dealerships

March 20, 1986|BARRY S. SURMAN | Times Staff Writer

NORCO — A Connecticut-based corporation and the city completed work on an agreement Wednesday to bring at least three dealerships to the planned Norco Auto Mall, a project that city officials hope will eventually add more than $2 million annually to the city treasury.

Caldrello Motor Group, based in Waterford, put up $75,000 in cash to secure the right to develop three automobile-dealer sites on the east side of Hamner Avenue, Deputy City Manager Ronald Cano said Wednesday.

Norco and the neighboring Riverside County city of Corona have been waging a high-stakes battle to attract--and, in Corona's case, to keep--auto dealerships, primarily because of the tax implications. A single dealership can generate tens of thousands of dollars in sales-tax revenue. New dealerships also increase property values and property-tax revenues.

Owns Eight Dealerships

Caldrello, a privately held company, currently owns eight dealerships, representing 15 car lines, in Connecticut, Rhode Island and New Jersey. It considered sites in Pasadena, Carlsbad, Costa Mesa, Ontario and Corona before settling on Norco for its first foray into the Southern California marketplace, Cano said.

Caldrello "has specialized in high-line products such as Mercedes Benz, Porsche, Audi, Jaguar and Volvo, but is moving more into the domestic and lower-line products as a means to diversify its product lines," Cano wrote in a report to Norco's Community Redevelopment Agency.

Under its agreement with the City of Norco, Caldrello must obtain commitments from three automobile manufacturers to grant franchises in Norco Auto Mall within six months, Cano said, then could negotiate purchase of the sites from the city.

Plans for the auto mall call for 11 dealerships flanking Hamner Avenue between 2nd and 3rd streets, next to the planned route of Interstate 15. In December the city established a master plan for the site, with a Spanish California architectural theme and common signs and landscaping for all dealers.

Thus far, only Ford Motor Co. has signed a contract to build a dealership in the Norco Auto Mall. Hemborg Ford, now located in a declining central Corona barrio, will relocate to the Norco site next year, said John Donlevy, Norco city manager.

Two Others Negotiating

At least two other dealers are negotiating for parcels in the Norco mall. One, an Orange County-based Oldsmobile dealer, is considering opening an additional location in Norco; the other, Phillips Pontiac and Mazda, would move from its current location, just down the street in Corona.

Officials in Corona have been trying to put together their own auto center, but their plans have been stalled by delays in selecting and purchasing a site.

"We have also talked to those people (Caldrello Motor Group) and they sounded interested in our project as well," said George Guayante, Corona's deputy director of housing and development. "We are not ready to accept anything like that (agreement with Norco). We do not have the land. . . . We cannot promise to deliver them a site."

27-Acre Auto Center

Corona set aside $3.2 million from a tax-increment bond issue last year to subsidize land purchases in its proposed 27-acre center, off the Riverside (91) Freeway at Serfas Club Drive but has not reached an accord with the owner of most of the land, Santa Fe Pacific Realty Corp.

In the meantime, Corona is hoping that no more of its automobile dealers will jump ship to Corona. "I would certainly hope we don't see too much of that," Guayante said.

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