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Chrysler Hopes to Save Closed Pete Ellis Dodge : Dealerships: It could reopen in 30 days if a new seller can be found to take over the location in South Gate.

February 14, 1991|LEE HARRIS | TIMES STAFF WRITER

SOUTH GATE — A spokesman for Chrysler Corp. said Tuesday that within 30 days it will reopen at least one of the three dealerships closed by Pete Ellis last week.

Chrysler Credit Corp. said Ellis' Dodge, Jeep/Eagle and Chrysler-Plymouth-Hyundai were closed last Thursday because they were losing money.

Don Stitt, Los Angeles zone sales manager for Chrysler, said the company plans to reopen the Dodge dealership. "We have the ability to reopen the Dodge store because we own the land. The other properties were being leased," Stitt said.

Stitt said the corporation is talking to several dealers about taking over the Dodge dealership on Firestone Boulevard at Garfield Avenue.

"I'm not sure we can come up with anyone with the Pete Ellis creativity. He had such high visibility. But we're looking to try and replace him. We will get someone who will run a good dealership," Stitt said.

Ellis said he does not think Chrysler will be able to find a dealer to take over the Dodge outlet during a bad financial period in the auto industry. The Dodge agency had been the "flagship" of his dealerships, as Ellis called it.

"I suspect Chrysler will put its own money into the operation. The guy they get to run it will be merely an administrator," Ellis said. "They will try and keep it going until the market changes and they'll try and find a private buyer."

Ellis added that he is pleased the dealership will reopen in any form, because it will mean continued sales tax revenue for the city of South Gate. The three dealerships provided $700,000 annually to the city, about 12% of the city's total estimated sales tax revenue this year.

Ellis also owns a Ford dealership in Bellflower. He said he is still in "shock" at the closure of the South Gate dealerships, and will put all of his energy into his Bellflower dealership.

The three Chrysler Corp. dealerships in South Gate lost about $500,000 in 1990, Ellis said. His business liabilities were $2 million to $3 million greater than his assets, and he owes Chrysler Credit Corp. at least $18 million, he said.

Last April, the city of South Gate loaned $250,000 to Ellis to renovate the Chrysler-Plymouth-Hyundai property, which had been vacant since the previous occupant left.

City officials said they had heard rumors that the company might reopen. "We are in the process of trying to set up a meeting with the company," said Ruben Lopez, deputy director of the city Redevelopment Agency.

Lopez said the city would welcome another dealer, even one with a smaller operation than Ellis had, because the city is trying to replace some of the lost sales tax revenue.

The City Council is discussing ways of replacing the lost revenue but is not ready to make them public yet, Mayor Robert A. Philipp said. "We are looking at many options. And I for one am not going to panic," Philipp told a group of residents attending a council meeting Monday.

"We must take a long-range look at finding ways to produce revenue," Philipp said. He did not think it would mean laying off any city employees.

"It might mean reducing services, but I don't see us reducing our Police Department or our park and recreation staff," he said.

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