In an effort to keep Carson City's biggest sales-tax generators in Carson City, supervisors agreed Thursday to an incentive package they say will spur growth and increase sales in the city's already booming new-car dealerships.
"I hate like heck to give an incentive to someone sitting on top," said Mayor Marv Teixeira. But the alternative of doing nothing at the expense of losing Carson City's car dealers and the $4.5 million they make for the city every year would be a disservice to residents, he said.
The incentive plan takes some of the money car dealerships on South Carson Street put into municipal coffers and sends it back for improvements and expansions of their lots.
Under the plan, the city can use as much as 20 percent of sales tax revenue from new-car sales to help dealerships add more land or new showrooms to their South Carson Street businesses.
It will be up to each car dealer whether or not to participate, Carson City redevelopment manager Joe McCarthy said.
The plan allows the city to spend up to $1 million a year on car lot projects. But, McCarthy said, if the projects result in increased car sales, the increase in tax revenue will be far more. And if the incentives keep just one dealer in Carson City, he added, it will be worth it.
"If we lose one car dealer, we lose them for good," he said, adding that one departure might lead to others.
Carson City and local dealerships began looking for a possible "auto mall" site in 2001 but came up empty handed.
City officials began working on the current incentive package about two years ago when local car dealer Michael Hohl bought 144 acres in Douglas County from the U.S. Bureau of Land Management, sparking speculation of an auto mall that would suck dealerships out of town.
Carson City sued the BLM to try and stop the sale but dropped litigation after Hohl agreed not to develop the land for two years.
That agreement is up in December.
"The threat to Carson City is real," McCarthy said.
To participate in an incentive deal, a car lot will have to stay in Carson City for 15 years, or pay back the incentive funds. If a dealership's sales tax revenue falls, which doesn't seem likely, the city can drop it from a redevelopment agreement.
McCarthy said the incentive package can also be used to draw new dealerships in Carson City's "auto row."
The incentives only apply to the area on South Carson Street where the bulk of the city's car dealers already are.
It encompasses 135 acres along both sides of Carson Street. It also applies only to new-car dealerships, much to the dismay of Bill Landry, who is not a car dealer but owns land in the midst of auto row.
Landry told the supervisors that some property owners there might like some help improving their land as well, without creating car lots.
"Any increase in business that could happen in these 84 parcels would be beneficial to Carson City," he said.
The incentives, supervisors responded, are geared solely at keeping and expanding auto sales.
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