SOUTH GATE — Automobile dealer Pete Ellis said he has pulled out of a project to develop an auto sales lot in this city because of political uncertainty and a successful petition drive to place the issue before voters.
In December, the City Council approved an agreement with Ellis and Michael Malamut, president of M & E Autoland Properties Inc. of Los Angeles, to develop an auto sales center on 7.14 acres of vacant city land near the Long Beach Freeway. Autoland would have paid the city $500,000 a year in rent.
"I'm disappointed after two years of discussions to end up with a doughnut hole," Ellis said.
He said he was pulling out because of "the possibility of losing all council support" after the upcoming city election in April and the petition drive aimed at overturning the council's approval of the Autoland agreement.
Mayor Herbert W. Cranton and Councilmen Odell L. Snavely and William H. DeWitt have supported the project, but Cranton is up for reelection, and Snavely and DeWitt have decided not to run. Councilmen Robert Philipp and Gregory Slaughter have opposed the project. They are backing two candidates, Johnny Ramirez and Mary Ann Buckles, who oppose the project.
Residents of the adjoining 20-acre Thunderbird Villa Mobile Home Park and their supporters gathered 1,821 signatures on petitions to try to force the council to place the issue on the ballot or rescind its action.
Despite Ellis' withdrawal and a legal opinion by the city's attorney that the issue was not the proper subject for a referendum, the council voted 3 to 2 Tuesday to place the measure on the June 5 primary ballot. Voters will be asked whether they approve of developing the property for any type of auto sales. The referendum is only an advisory measure.
But Cranton said: "It would be political suicide not to go along with what the voters want."
Ellis notified officials of his decision in a letter delivered late Tuesday afternoon. At a special meeting Tuesday night, Cranton, DeWitt and Snavely voted to put the issue on the ballot. Philipp and Slaughter were opposed.
"The people gathered these signatures and we want them to have the opportunity to vote on the matter," Cranton said.
But a resident of the mobile But a resident of the mobile But a resident of the mobile But a resident of the mobile But a resident of the mobile But a resident of the mobile home park, Alberta Beitman, said putting the issue on the ballot "is a waste of time and money." Officials estimated that the ballot measure will cost between $10,000 and $12,000. A special election would have cost as much as $30,000, officials said.
Slaughter said he agreed that the issue is moot. He and Philipp had opposed the project and gave support to the group circulating the petition.
Cranton said the city could have used the money to pay for additional city services, including hiring additional officers for the 91-member Police Department and building a sound wall between the Long Beach Freeway and the mobile home park.
"By Slaughter and Philipp spearheading this petition drive, the city will lose sales taxes from Autoland and we will have to pay Pete Ellis nearly $150,000," Cranton said. Ellis has requested a reimbursement of $133,300 from the city for work the company put into the project.
Philipp denied spearheading the petition drive. He said he supported the group's effort because he agreed with their argument that Autoland would bring unbearable traffic congestion to a heavily industrialized area. Philipp said he was not opposed to the concept of an auto lot, but he believed another site should have been chosen.
Autoland was scheduled to open by May. The cars were to be bought from dealerships at fleet prices and sold to credit union members at discount prices. Ellis said Autoland is talking to three other cities about an auto mart operation. He would not name them.
Ellis owns the Pete Ellis Dodge and Jeep/Eagle dealership in South Gate.
The council also approved a ballot measure asking for voter opinion on a steel company's request for a $2-million loan, even though the company has withdrawn the request.
Officials of Shultz Steel Co. sent the city a letter saying the company was withdrawing its request for the loan to expand the plant at 5321 Firestone Blvd. The company's chief financial officer, Thomas Reed, said the company would not comment further on its decision.
Councilman DeWitt said that since residents were questioning the council's action on Autoland, "this might be a good time to get voters involved. By putting this on the ballot they will see how we spend their money."
Cranton and Snavely voted with DeWitt to place the Shultz measure on the ballot. Philipp and Slaughter voted against it.