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Claremont Auto Center Closes, Idling 200 Workers : Revenue: City has received $600,000 a year in sales tax. Officials expect to find a new buyer in a month or two.

November 17, 1994|DENISE HAMILTON | TIMES STAFF WRITER

The Claremont Auto Center shut down suddenly on Monday, putting more than 200 employees out of work and dealing a severe blow to Claremont city coffers, which received about $600,000 each year in sales tax from the center.

That is equal to one-quarter of Claremont's total sales-tax revenues, according to City Manager Glenn Southard.

"That's large; it would have a noticeable impact on our budget," Southard said.

City officials said they are already negotiating with several potential buyers to reopen the center, which is home to franchises carrying Acura, Cadillac, GMC Truck, Hyundai, Isuzu, Pontiac and Ford cars and trucks.

"There's nothing wrong with the auto center; it's selling cars and for a long time it was an extremely successful enterprise," Southard said. "It is carrying past debt, and it needs a more aggressive approach to management."

City officials said the center was forced to shut down when its chief financier, General Electric Capital Corp., withdrew its credit line after weeks of negotiations. The move caught everyone by surprise.

"We knew there were renegotiations going on, but we had no idea it was going to close," Southard said.

Tom Bell, the center's owner, was unavailable for comment. Bell owns several car dealerships in the Inland Empire, including Tom Bell Toyota of Redlands.

Claremont city officials said Bell, who has a history of operating successful dealerships, bought the seven franchises of the Claremont Auto Center last year with financing from GE Capital after the previous operator, Tak Sugimura, could not make it profitable.

The Claremont Auto Center, whose huge signs are visible from the San Bernardino (10) Freeway, has long battled financial troubles. Since 1991, Claremont's Redevelopment Agency has loaned $1.1 million to two successive operators of the center to keep it afloat.

City officials say they have recouped their loans by more than double with sales-tax revenues, and they were optimistic that the center will only be closed this time for a month or two until a new buyer is found.

"We're hopeful things will work out," said City Councilwoman Diane Ring. "It's too good a marketplace for it not to work out."

Ring then referred all questions to Southard, who declined to speculate on what specific cuts the city might consider in its budget if the auto center does not reopen.

He warned that the closure could have a ripple effect on other businesses in the area, especially those in related fields such as carwashes and auto parts stores.

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