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ESCONDIDO: City approves CarMax lot despite competition concerns
City Council dismisses idea of protecting existing dealers
By DAVID GARRICK - Staff Writer | ∞
ESCONDIDO ---- The City Council has approved plans for a large CarMax used car dealership near Highway 78, despite concerns that new competition could further reduce already-plummeting profits at Escondido's existing dealerships.
Council members said Wednesday night that they were hopeful CarMax would boost revenue at all local dealers by bringing new car shoppers to the city. The national chain is popular with car buyers because of its "no haggle" pricing, extensive inventory and five-day, money-back guarantee on all sales.
Council members said it would be inappropriate to protect the existing dealers from competition, even with Witt Lincoln-Mercury's closure last month and several other dealers struggling. The council also said that CarMax would just open somewhere else in North County if Escondido rejected it.
"I like the fact that Escondido is the go-to place when you're going to buy a car because we have the largest selection," said Councilman Dick Daniels. "I don't think we have a responsibility to be protectionist of our existing dealers."
Daniels said he had spoken to existing dealers about their concerns and that they had been "realistic" about the situation.
"They realize that when they came here they were coming as competition to the dealers that were here before," he said.
Councilman Ed Gallo said the fear of CarMax is similar to small merchants fearing Wal-Mart, which he described as unwarranted.
"I don't see where the competition is going to be a big deal," said Gallo. "And if they don't come here, they will go somewhere else in North County and Escondido won't get the sales tax dollars."
Councilman Sam Abed said the projected $500,000 in sales tax that CarMax would generate for the city helped persuade him to support the project despite his concerns.
"Competition is good, but too much competition can compromise the health and financial survivability of our existing dealerships," said Abed, noting that the city already has 50 new and used car dealers. "But I'm not going to turn down a successful business in Escondido."
Councilwoman Marie Waldron, the lone council member to vote against CarMax, said she could not support the project because of its location next to Lowe's home improvement on West Mission Avenue.
"I don't think it's fair to support freeway visibility for you when we have forced other dealers into the auto park," Waldron told CarMax officials.
None of the city's existing dealers spoke against the proposal when the council approved it Wednesday night. Several local dealers did not return phone calls Thursday.
Local dealers got some good news Wednesday night when CarMax officials said that the slumping economy would delay the opening of the new dealership until at least 2010.
The dealership would be built on a vacant, 5.6-acre site just south of Highway 78, a half-mile east of Interstate 15 and several blocks north of downtown. The site had been earmarked for 160 condominiums, but the property owner scrapped those plans early this year when the real estate market crashed.
Escondido would be the first North County location for CarMax. The company's first San Diego County store opened last November in Kearny Mesa.
CarMax would be the largest used car dealership in the city, with an 8,150-square-foot showroom, 3,350-square-foot service building and 900-square-foot car wash. It would also feature 324 parking spots to display cars available for purchase, and 132 spots for customer and employee parking.
The council rejected the company's request for a 225-square-foot sign along Highway 78, but approved a 125-square-foot pole sign.
Steve Hudak, real estate manager for CarMax, told the council that another appeal of CarMax was the company's disdain for the "unsightly" outdoor promotional materials that many dealers use.
"We don't prop our hoods open with price placards and we don't use gorillas and balloons," Hudak said.
Contact staff writer David Garrick at (760) 740-5468 or dgarrick@nctimes.com.
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About time........ wrote on Nov 20, 2008 2:01 PM:we get some business coming to Escondido rather than San Marcos. CarMax is a great operation, and will only keep the other used car dealers "in-line" when it comes to quality of cars and pricing!
Family Fun wrote on Nov 20, 2008 3:07 PM:Another used car lot. This will add much more to our quality of life than the family fun center that was there before.
Awesome wrote on Nov 20, 2008 3:16 PM:I'm planning to buy a new used car in about 10 years! I'll be there.
Tim wrote on Nov 20, 2008 3:25 PM:... Sure, the city is in financial trouble, let's keep businesses out and give up additional tax revenue! Look at all of the stores and restaurants in San Marcos and look at the little we have in the larger, more developed Escondido! They can't even get an In-n-Out Burger because they won't budge on sign height, but bend for the car dealers. It ain't right, I'm calling Turko!
Yahoo wrote on Nov 20, 2008 3:32 PM:Another car lot!! How about some clean manufacturing or something like that. The tax revenues are now so heavily dependant on sales tax and homes. Enough!
Welcome CarMax wrote on Nov 20, 2008 4:14 PM:We need a above board business like this in Escondido. Maybe they WILL drive Mex-Amer Car out of business. I hope so!
A Monopoly with Extra Traffic wrote on Nov 20, 2008 7:11 PM:The CarMax rep. said that they will hold auto auctions and the local car dealers can buy their cars from them.
Also, the trucks that deliver these vehicles will have to use Mission Ave.
Get ready for a traffic nightmare.
Blue Collar Mom wrote on Nov 20, 2008 8:18 PM:IT'S ABOUT TIME!!! CarMax is a great company...used cars are what people will need for the next few years of econmomic hard-times...if the other dealers can't compete they aren't run properly. We need the sales tax revenue from businesses that people will actually use during the economic slow down...I wish they would fast track development, not delay it.
How unlike Escondido to realize that if they didn't accept CarMax they would just go next door to San Marcos...like every other good big-box retailer in the area.
now if only we could get that Walmart on East Valley.
KEEN OBSERVER wrote on Nov 20, 2008 10:16 PM:CARMAX will help revitalize the West Mission area, consistent with the City's desires and the West Mission Specific Plan, and it's a low investment holding pattern for a higher use when good times warrant.
The Wal-Mart of Used Cars wrote on Nov 21, 2008 4:38 AM:The concept for CarMax was developed by Circuit City executives under then-CEO Richard L. Sharp for nearly a year in 1991 using the code name "Project X" and was also known as "Honest Rick's Used Cars" to those intimately involved in the planning.
The typical CarMax store is approximately 59,000 square feet, carries an inventory of 300–400 vehicles, and turns its inventory over eight to ten times a year. On average, a CarMax location employs 40 sales associates
Just Curious wrote on Nov 21, 2008 5:13 AM:Do you need to have a driver's license, insurance, and registration to buy a car?
Brad wrote on Nov 21, 2008 8:15 AM:Has the location for this place been written in concrete? If the government does the right thing, by 2010 there may be 4 empty lots in the Auto Park!
Carmax Fan wrote on Nov 21, 2008 9:06 AM:RE: Walmart of Used Cars...
Since you're quoting wikipedia, why didn't you mention that Carmax was also named #46 on the 2008 Forbes list of "America's Most Admired Company in Automotive Retailing"?
And FYI.. the size of the store in Escondido would most likely be around 20,000 sf.
So this would be bad for us why again?? Try using a little common sense people!
Why wrote on Nov 21, 2008 9:27 AM:Why could they put it in an existing building like where witt use to be. Why build something new when there are vacant buildings. Smart growth cities require businesses to prove their is no alternative before building. With the economy the way it is there is bound to be more dealerships going out of business soon. They should fill in the spots, not make new ones.
To family fun wrote on Nov 21, 2008 9:56 AM:Where have YOU been? Boomers has been gone from that location for at least 5 years. That's like asking "what happened to the Vineyard?" Answer: Demolished in 1999.
Wow wrote on Nov 21, 2008 11:04 AM:Waldron was correct. I watched the meeting and she is wanting high end jobs and commercial development on that site and not condos and not another "up scale" used car lot right on the freeway. It's not fair to existing car dealers who played by the rules.
Then Carmax hit the council between the eyes saying they are tying up the property but because of the economy will probably not build for years. Wow, a vacant mud and weed lot for everyone to stare at at the entrance to the city. Who knows, they may never build it.
Too bad the council majority is so shortsighted that they "sell out" to the first applicant for the tax money instead of holding on to a vision.
Why Change Horses in Mid-stream wrote on Nov 21, 2008 11:11 AM:This is exactly the same City Council mind-set which has allowed the arts center to be grossly mismanaged since 1994. Changes conducive to City taxpayers pursuit of happiness? Are you kidding me? No worries, try San Marcos or Temecula. These two cities are all about progress with the local residents best interest in mind. This is how a city is suppose to operate. Keeping the same mayor, city manager, and the same pompus ass's in city council isn't helping things...is it?
COMPETITION wrote on Nov 21, 2008 1:21 PM:All competition is good,is that why all those low cost workers in foreign countries have jobs while higher paid Americans have lost jobs. Seems competition is good until it cost you your job. Do you care if it is your nieghbors loss, should he care about your loss. Not all competition has been good for the U.S.A.
Pink Power Ranger wrote on Nov 21, 2008 4:46 PM:ppssstt!
Everybody is buying their cars online.
YOU have all the power online.
My friend bought hers online .She taught me how to buy mine and so on...
It put the fun back into buying a new car.You will buy when you feel like you are getting a FAIR deal.Never got that feeling from any dealer in Escondido.All those attenetion gimmicks..gorillas..baloons...ohhh and the one I hate the most...letcherous used car salemen ....
:::pushing up coat sleeves:::
to reveal immitation Rolex watches
yeah those guys.....save meeeeeeeeeee!
Shop online for a car.
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