ALHAMBRA — Overcoming competition from neighboring cities and struggling with several conflicts of interest, the City Council has approved an agreement that would allow one of the area's largest car dealerships to move from Monterey Park to Alhambra at a cost to the Redevelopment Agency of $4.2 million.
City Manager Kevin Murphy said the agreement will give Alhambra a Pontiac, Subaru and GMC truck agency that does $30 million worth of business a year.
Murphy said that although the agreement has been approved by the council and the car dealer, the arrangement hinges on action in Superior Court because of conflicting financial interests of three council members.
If the deal is completed, the car dealership will produce $300,000 a year in sales tax revenue for Alhambra, Murphy said. He said the sales volume would be higher than any other business currently in the city and second only to the Price Club, a warehouse discount store due to open in September.
The dealership would cover three acres on the north side of Main Street between Palm and Raymond avenues. The property is occupied by Progressive Savings & Loan and by two apartment buildings with a total of 14 rental units.
Three of the five City Council members own stock in Progressive Savings, which raised the conflict-of-interest issue. Councilwoman Mary Louise Bunker was a paid member of the firm's board of directors until recently and Councilman Talmage V. Burke is also a former board member. The other stockholder on the council is Mayor J. Parker Williams.
On the advice of City Atty. Leland Dolley, Bunker has refrained from participating in discussions involving the Progressive Savings property, and Burke has agreed to vote on the issue only when a fourth vote is required by law.
Dolley said the conflict problem probably can be overcome by having the city acquire the Progressive Savings property through court proceedings, with Superior Court setting the amount of money to be paid for the property. In a seven-page opinion, Dolley cautioned the council, however, that there is little precedent to guide the city and "that it is only probable that a court would uphold the agreement and acquisition."
The city has estimated the cost of acquiring the entire three acres at $5.6 million. In addition, the city expects to spend $70,000 to relocate Progressive Savings and the apartment tenants, $30,000 to demolish buildings and $85,000 on administrative costs.
Gayland Hood, a Riverside auto dealer who is acquiring the Superior Pontiac-Subaru-GMC dealership in Monterey Park from owner Jim Pinegar, has agreed to pay Alhambra about $1.6 million for the land, based on a price of $12 per square foot.
Murphy said the Progressive Savings headquarters building would be converted into an auto showroom. Progressive Savings would maintain a branch office at the site until it could establish an office elsewhere in Alhambra.
Last week, Far West Financial Corp. of Newport Beach announced that it had reached tentative agreement to acquire Progressive. The Alhambra savings and loan, which has 10 branches, has been beset with financial problems and lost a total of $9.4 million in 1984 and 1985.
Murphy said Progressive officials have indicated their willingness to give up the Alhambra site through court condemnation proceedings.
In addition to acquiring and reselling the land occupied by the savings and loan and the apartments, the city would narrow adjoining streets to enlarge the auto dealership site.
Murphy said the city has agreed to reduce the width of Palm and Vine streets by 12 feet and Main Street by 18 feet. The streets are wide enough so that right-of-way can be reduced without hurting traffic flow, he said.
The Redevelopment Agency's estimated outlay of $5.8 million, minus $1.6 million gained from resale of the land, would leave the agency a net cost of $4.2 million to bring the auto dealership to Alhambra. Murphy said it would take the city about 10 years to recover the Redevelopment Agency's cost through sales and property taxes.
But the investment will be more than worth it, he said, because of the income that will flow to the city after the costs are recovered.
Help to Auto Row Cited
"Beyond that," he said, "the addition of such a strong volume dealer can only help all of Auto Row," referring to a string of dealerships along Main Street.
Pinegar, owner of Superior Pontiac, sold his auto sales lot on Atlantic Boulevard near the San Bernardino Freeway in Monterey Park to a developer and has been leasing the site under an agreement that is due to expire this fall. Pinegar talked to Monterey Park, Alhambra and Montebello officials about finding a new site for his dealership before deciding to sell it and open a new auto agency in Ontario, Murphy said.