The City Council approved an agreement Tuesday with Colley Chevrolet for the company to build and operate an auto dealership in the Glendora Auto Mall on Auto Center Drive.
The city will sell 5.85 acres to Colley for a down payment of about $1.3 million, $2.3 million less than it cost Glendora to acquire and improve the property.
City Manager Art Cook said the shortfall is in effect a loan that Colley must repay at 10% interest to the city's Redevelopment Agency over the next 10 years through sales tax on automobiles and by increased property taxes due to improvements to the land. Cook said if taxes do not pay off the debt by the end of 10 years, the company will face a balloon payment to make up the difference.
Councilman David Bodley voted against the agreement, saying he was concerned the loan may never be repaid.