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Recession Drives Out Dealership : * Business: City tax revenue and 96 jobs are lost. Other auto dealers say they'll outlast the tough times.


GLENDALE — A Glendale auto dealership abruptly went out of business last week, but other dealers on Brand Boulevard should weather the recession, city officials said.

A court-appointed receiver Tuesday took charge of the Morrison Automotive Group property, said Eric Martin, executive vice president of Tokai Credit Corp., which foreclosed on the property last year.

Morrison, which has leased the property from Tokai since the foreclosure, had asked the credit company for a $750,000 loan for operating money but was unable to provide enough collateral to secure the loan, Martin said. Tokai on Friday covered the expense of the final payroll, Martin said.

City officials and local dealers maintain that Morrison's troubles are indicative of problems nationwide: Auto sales last year dropped to their lowest level since 1983.

"This doesn't mean that car dealerships are leaving the area," said Brian Butler, city finance director. He said he is hoping creditors "will turn around and sell the dealerships" to new buyers.

The closure is expected to further strain the city's budget, already seriously stressed by falling tax revenues. Auto sales have fallen 29% in the past two years, severely denting city sales tax income, Butler said.

The city earned about $2.5 million in 1991 from new-car sales taxes, down from $3.54 million in 1989 and $3.25 million in 1990.

Despite the gloomy economy, other local auto dealers said they are prepared to weather the storm. "We are all financially solid," said Lewis Sokolow, owner of Colonial Honda in Glendale.

Sokolow, who has been a Glendale auto dealer for 38 years, estimates that his own sales have fallen 18% in the past year. "Morrison was the only one considered in trouble," Sokolow said. "There had been rumors for well over a year."

Owner John Morrison could not be reached for comment.

Dealers in Glendale have long talked about their need to expand their businesses to compete with a proliferation of auto malls in outlying areas.

After more than 15 years of debate, the city of Glendale is expected to finalize a plan this spring to increase commercial development along the so-called auto row on South Brand Boulevard. The plan also limits how far dealerships can encroach on adjoining neighborhoods.

The plan conceivably could increase property values along Brand because it would allow greater-density development. Morrison, at 1225 S. Brand Blvd., was among those that stood to gain the most because of its extensive frontage.

Last week, Morrison, which called itself "Glendale's Megadealer," in a telephone Yellow Pages ad, locked its doors and sent 96 workers home.

Sokolow said Morrison far outbid him three years ago to purchase the veteran Modern Motors Cadillac-Pontiac dealership.

Morrison had earlier bought Nissan and Volkswagen franchises and added Hyundai to the sprawling complex.

"He went in there with such a high overhead at just the wrong time," Sokolow said. "He paid quite a bit, perhaps more than he should have, but those were good times. The times immediately turned bad, and he was just in loads and loads of trouble, literally from the very word go. "

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