Dick Campagni's Carson City Toyota is seeking $3.6 million in redevelopment funds to buy about six acres on South Carson Street to build a new car dealership.
The auto dealer, who owns four dealerships in Carson City, will go before the redevelopment authority and the board of supervisors Thursday for incentive approval.
"It isn't complete yet because it still has to go in front of the board of supervisors and the escrow isn't closed yet," Campagni said Friday. "But I feel it's a positive deal for the city and for Dick Campagni."
Joe McCarthy, Carson City economic development and redevelopment manager, said an expanded auto dealership will significantly increase sales tax revenue to the city. The proposed project is double the size of Campagni's current Toyota dealership.
"This is a partnership between the city and a car dealer to grow his sales," McCarthy said. "The growth of sales will more than offset the investment we're making in this dealership in the long term."
The 5.86 acre vacant lot is south of the Wells Fargo near auto row. According to the Carson City Assessor's roll, the land is owned by TG Investments LLC. A principle member of the group is Incline Village businessman Tom Gonzales.
Gonzales said he wasn't aware of the sale and declined to comment. In August 2003 the land sold to TG Investments for $2.05 million.
McCarthy said Carson City Toyota would receive $1.8 million when it closes escrow on Aug. 10. Then another $1.8 million in city redevelopment funds would be transferred to Campagni on Jan. 31. McCarthy said a growth in sales tax over a 10-year period would help subsidize the investment.
"With that, Dick (Campagni) then signs a promissory note and he will have to maintain sales at his current-level base every year for the next 10 years to pay down that agreement," McCarthy said. "And he also agrees to stay in Carson City for 15 years."
Campagni is the first auto dealer to apply for the auto-row incentive program, which was approved by the supervisors on March 17 to secure and stimulate auto sales investment along South Carson Street.
According to McCarthy, Campagni is also looking at making his Carson City Mazda, Hyundai and Capital Ford dealerships into stand-alone operations, which means each dealership will be separate rather than combined.
Carson City Finance Director Tom Minton said the $3.6 million, which will cover the cost of the land, would come from capital programs until sales tax growth pays off general obligation bonds the city intends to issue.
Minton said a new auto dealership makes up to 25 percent more than older dealerships.
"He should generate much more sales," Minton said. "It will benefit not just the Toyota dealership."
McCarthy said the project will also put vacant land into use.
"Or he goes to Douglas County and it's disastrous for this community," he said. "So, we're being proactive to keep him in town."
n Contact reporter Becky Bosshart at firstname.lastname@example.org or 881-1212.
Why you should care
Carson City's franchised new-auto dealers generate about $220 million in annual sales, which constitutes about 33 percent of the annual sales tax revenue, according to Carson City records. If Dick Campagni's dealership left Carson City that would be about a $2 million loss to the city.