The city will keep a major auto dealer in Carson City for at least 20 years under a $4.8 million deal approved Thursday.
Michael Hohl will keep his three auto dealerships and RV center in Carson City in exchange for an incentive that will help him build new locations for his $10 million-$12 million Honda and Subaru dealerships, and possibly a Chevrolet dealership, on South Carson Street.
If the problems of American car manufacturers hurt Hohl's Chevrolet dealership, he can remodel his General Motors dealership instead under the agreement.
The city plans to use the sales taxes raised by the dealerships to for pay the $4.8 million incentive. It could sell bonds to raise the money under the deal.
Hohl is one of two major auto dealers that helps generate about a third of the city's sales taxes. The city's general fund gets about 40 percent of its revenue through sales taxes.
The city's other major auto dealer, Dick Campagni, will keep his three dealerships in Carson City for 20 years under a $3.6 million incentive agreement amended in November. It was designed to help him build a new location on South Carson Street for his Toyota-Scion dealership.
Hohl told supervisors at the meeting that he is committed to Carson City, but the economy is challenging.
"It's awfully tough on the automobile business and it's awfully tough on the city," he said.
The six years of negotiating with Hohl have been "a long road," said Supervisor Richard Staub. It will be worth it when about $20 million worth of work by Hohl and Campagni starts next year, he said.
"South Carson Street is really going to change," according to Staub.
City Economic Development Manager Joe McCarthy said negotiations with Hohl have been "difficult" but friendly. American car makers and local auto dealers will make it out of the recession, he said.
McCarthy called Hohl a "really good businessman."
Auto dealers in Carson City make about $200 million in annual sales, according to McCarthy.
Sales at auto dealerships have been slumped this year, however. Sales during several months have dropped 20 percent compared to the year before.
Auto dealers can't control the slow economy, Mayor Marv Teixeira said, but their sales have hit the city government hard.
"We live and die off sales tax," he said.
- Contact reporter Dave Frank at firstname.lastname@example.org or 881-1212.