01 Staff Report - Concerns Regarding Auto DealershipsMEETING DATE: 4/29/02
ITEM NO. I
COUNCIL STUDY SESSION AGENDA REPORT
DATE: April 25, 2002
TO: MAYOR AND TOWN COUNCIL
FROM: DEBRA J. FIGONE, TOWN MANAGER
SUBJECT:
DISCUSSION OF ISSUES AND CONCERNS REGARDING LOS GATOS
AUTO DEALERSHIPS
RECOMMENDATION:
Discussion of issues and concerns regarding Los Gatos Auto Dealerships.
BACKGROUND:
The Los Gatos Auto Dealerships have been a part of the Los Gatos Community for over half a
century. They continue to provide residents with the ability to purchase new and used vehicles
within their own community and have the vehicles serviced locally. The seven auto dealerships
provide the Town with an important source of General Fund revenue by generating nearly $2 million
in sales tax revenue to the Town annually. This represents approximately 27 percent of the Town's
sales tax revenue, and is by far the largest sales tax generating sector.
A number of factors have recently directed greater Town attention to the auto dealers. These factors
include the Town's desire to put greater emphasis on the economic vitality of the community. The
recently hired Redevelopment Manager has begun to implement economic vitality efforts including
developing a draft Economic Vitality Plan, sending out business surveys and making business
visitation calls.
In addition, the economic slow down, and the drop in the Town's sales tax revenues have been an
area of concern. Finally, with another dealership leaving Town recently (McHugh Lincoln Mercury
moving to San Jose), a growing concern has developed about the viability of the Los Gatos Auto
Dealers. These factors combined are an impetus for the Town to take a proactive approach in
working with the Los Gatos Auto Dealers.
(Continued on Page 2)
PREPARED BY: BUD N. LORTZriq.._,
Community Development Director
MARTY WOODWORTH(hc
Redevelopment Manager
Reviewed by: '- Attorney Clerk Finance ✓ Community Development
Revised: 4/25/02 1:53 pm
N:\DE V\Marty\autodealers\autodealerstudysessi onreportapri 129,2002. wpd
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: STUDY SESSION - LOS GATOS AUTO DEALERS
April 25, 2002
It should be noted that the Town has taken actions in the past to enhance the auto sales business
in Los Gatos. Attached is a 1990 report to the Council from the Commercial Specific Plan
Committee that recommended actions regarding auto storage and promotion.
DISCUSSION:
In January, Town staff interviewed all seven auto dealers to determine the positive aspects of auto
sales in Los Gatos as well as those areas where improvement could be made. Attached is a brief
outline indicating the areas that were concluded by staff to be areas of concern as well as those areas
where opportunities exist.
The purpose of the study session is to review the auto sales business in Los Gatos, hear from the
owners and managers of the dealerships and discuss actions that the Town and dealers may wish to
consider to enhance the auto sales business in Town, while at the same time protecting residential
neighborhoods and the high design standards of the community. In addition, a major goal of the
Town is to develop an improved working relationship between the auto dealers and the Town.
The following questions may provide a framework for discussion at the study session:
.
•
What are the strengths of the Los Gatos auto business?
What are some of the weaknesses of the Los Gatos auto business?
What do the existing dealerships need from the Town to enhance their businesses?
How can a balance be struck between protecting residential neighborhoods and allowing the
dealers to run successful businesses?
What upgrades to existing facilities do dealers need to make and how can the Town assist?
Are there opportunities to bring in new brands of cars and trucks?
What are the next steps for the Town and the Los Gatos Auto Dealers?
CONCLUSION:
The study session presents an opportunity to review the auto sales business in Los Gatos and discuss
actions that may be desirable in order to enhance it.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The Study Session itself will have no direct fiscal impact. However, the auto sales business is
currently the largest producer of sales tax to the Town.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: STUDY SESSION - LOS GATOS AUTO DEALERS
April 25, 2002
Attachments:
1. Summary Staff Analysis - Los Gatos Auto Dealers
2. Report from the Commercial Specific Plan Committee dated June 13, 1990
3. Business Journal article dated February 15, 2002
Distribution:
Department Heads
BNL:MW:mdc
SUMMARY STAFF ANALYSIS - LOS GATOS AUTO DEALERS
Benefits to Town from Auto Dealers:
• Allow residents to buy cars and have them serviced within their own community
• Auto dealers are low traffic generators (much lower than other commercial uses) and
generally good neighbors with adjacent land uses
• Auto dealers have been a part of the Los Gatos community for over half a century
• Auto dealers generate almost $2 million annually in sales tax to the Town, or about 27%
of all sales tax for the General Fund
Weakness of Los Gatos Auto Row:
•
•
Auto dealers throughout the State continue to migrate to larger auto malls
Los Gatos auto row is in a weaker position than Capital Expressway Auto Mall and
Stevens Creek Auto Row with fewer dealers, little joint advertising, and no strong dealer
association
Los Gatos auto dealers are not all adjacent to each other, being spread over a one -mile
stretch of Los Gatos Blvd.
It has lost several dealers (Nissan, Volvo, Chrysler) in recent years, including McHugh
Lincoln Mercury most recently
Lower volume of sales often makes it difficult to compete with other auto malls/rows
Adjacent residential neighborhood - added effort to control noise/traffic
Outdated Facilities:
• Majority of dealerships buildings were built 30 to 50 years ago and are outdated
• Buildings and facilities need to be upgraded and made modern to serve the public and
maximize sales
Some manufacturers are demanding buildings be modernized
Los Gatos Auto Dealers have found it very difficult in some cases to obtain approval
from the Town for the desired upgrades
If some facilities cannot be modernized, the dealers may choose, or be forced, to move
out of town
Auto dealers throughout Silicon Valley are making major investments in upgrading and
expanding their facilities (see attached Business Journal Article dated February 15, 2002
"Car dealers driving $100 million in expansions")
Dealerships of Inadequate Size:
•
•
Dealerships need to be of adequate size in order to carry necessary inventory in order to
maximize the sale of vehicles
Several dealerships have indicated that they are of inadequate size and need to take steps
to address the problem or may need to relocate
The use of off -site storage facilities and intensifying car storage on -site should be
reviewed
ATTACHMENT 1
Many Dealerships Leased, Not Owned - Zoning Does Not Protect Use
• Five of the dealers lease their land
Zoning allows property to be converted to other uses
As property increases in value property owners may consider selling or leasing the
property for other uses
Potential and Opportunities:
• Los Gatos has a strong niche market for higher end vehicles
• Los Gatos auto market can continue to be successful through proactively addressing key
issues
• The potential may exist for several new dealerships should appropriate sites be located
• Auto sales hold the Town's greatest potential for substantial increasing General Fund
sales tax revenue with minimal impacts
• Upgraded and renovated auto dealerships could greatly enhance the image of Los Gatos
Blvd.
• Improved communication and coordination between the Town and Auto Dealers will
enhance potential and opportunities
N:\DEV\Marty\autodealers\autodealeragendaapri1292002.wpd
Council Agenda
Date: 6/18/90
Item:
TOWN OF LOS GATOS
Council Agenda Report
DATE: June 13, 1990
TO: MAYOR AND TOWN COUNCIL
FROM: ROBERT F. BEYER, INTERIM TOWN MANAGER
SUBJECT: A. REPORT FROM THE COMMERCIAL SPECIFIC PLAN COMMITTEE.
B. RECOMMENDATION TO INTRODUCE AND ADOPT AN URGENCY INTERIM
ZONING ORDINANCE PROHIBITING NEW OFFICEACTIVITIES ON THE GROUND
FLOOR IN THE DOWNTOWN.
C. RECOMMENDATION TO ADOPT A RESOLUTION CONCERNING THE PROPERTY
SOUTH OF SARATOGA AVENUE AND EAST OF HIGHWAY 17.
RECOMMENDATION:
That the Council take the following actions:
1. Amendments to the sign ordinance:
a. Direct the Planning Department to schedule a public meeting with the auto dealers;
b. Refer this matter to the Planning Commission to develop specific amendments regarding
"space for tease' signs and signs at auto dealers.
2. Procedures relating to projects that create traffic impacts:
a. Adopt the proposed revisions to the Traffic Policy as recommended by the Planning
Commission with an amendment to encourage high tax revenue generating businesses at
the edge of Town.
b. Direct the Planning Department to develop a definition of high tax revenue and develop
procedures that would streamline the review process for these projects.
3. Downtown Parking:
a. Direct the Town Engineer to prepare a resolution amending the two hour parking limit for
on street parking in the Downtown to one hour and Institute a permit parking program.
4. Development of property south of Saratoga Avenue and east of Highway 17:
a. Adopt the draft resolution attached as Exhibit 1.
(Continued on Page 2)
PREPARED BY: LEE E. BOWMAN! e
Planning Director/Deputy Town Manager
LEB:RR:1kj
vnsl.7[a\1- is.0
Reviewed by: Attorney
TOWN COUNCIL ACTION DIRECTED TO:
ACTION OF COUNCIL:
ATTACHMENT 2
PAGE 2
MAYOR AND TOWN COUNL
SUBJECT: REPORT FROM THE COMMERCIAL SPECIFIC PLAN COMMITTEE
DATE: JUNE 18, 1990
5. Off -site auto storage:
a. Refer to the Planning Commission an amendment to the Zoning Ordinance to allow off -
site auto storage in all zones subject to specific standards with a Conditional Use Permit.
6. Urgency Ordinance prohibiting new office uses on the ground floor in the Downtown:
a. Make the finding that the Urgency Interim Zoning Ordinance is necessary to protect the
public health, safety and welfare as set forth in Section I of the Draft Ordinance (Exhibit 2);
b. Waive the reading;
c. introduce Urgency Interim Zoning Ordinance;
d. Adopt Urgency Interim Zoning Ordinance;
e. Instruct the Town Clerk to schedule a public hearing for July 2, 1990, to extend the
ordinance for 10 months and 15 days.
NOTE: A four -fifths vote of the Council is required to adopt an Urgency Interim Zoning Ordinance.
BACKGROUND:
On April 17, 1989, the Council approved the formation of a Committee to create a Commercial Specific Plan.
The Committee has been meeting an a regular basis since January, 1990 and divided the Town's commercial
areas into 12 subareas. These commercial subareas were studied. individually during a series of public
workshops. The Committee solicited input from all businesses and property owners in each area. During
the last two meetings, the Committee reviewed the issues and comments from the merchants and property
owners and developed specific recommendations to address those issues and comments that require
immediate action. The Committee intends to continue meeting to discuss the more complex issues and to
develop a draft Commercial Specific Plan.
DISCUSSION:
On May 31, 1990, the Commercial Specific Plan Committee recommended that the Council set, as the
highest priority, staff time to prepare a Commercial Specific Plan. In addition, the Committee recommended
that Council provide funds to hire consultants for the preparation of various special studies including a
market study to determine the commercial/business needs of the community and a report identifying the
types of businesses which would provide the greatest source of revenue for the Town.
The following is a summary of the Committee's other recommendations regarding the items that should
be addressed immediately.
Sign Ordinance:
1. Hold a meeting to solicit input regarding special event signs, lease signs, and the duration of
temporary signs. The Committee is concerned with the size, number, orientation and duration of
temporary signs. The Committee recommends that for (ease' signs be allowed to be double-
faced so they may be placed perpendicular to streets to provide greater exposure. The Zoning
Ordinance currently requires that these signs be single -faced.
2. Develop a handout regarding the sign ordinance to be distributed to local businesses. It appears
that some local businesses do not dearly understand the sign ordinance and have interpreted it to
be more restrictive than it actually is. The Planning Department was wcrking with the Chamber cf
Commerce prior to the earthquake to develop a handout but since that time no progress has been
-. made in completing the handout.
PAGE 3
MAYOR AND TOWN COUNLIL
SUBJECT: REPORT FROM THE COMMERCIAL SPECIFIC PLAN COMMITTEE
DATE JUNE 18, 1990
Traffic Policy:
3. Amend the traffic policy to:
a. Relax regulations for high revenue generating projects which are not peak hour intensive;
b. Explore the possibility of streamlining the review process for high revenue generating
projects.
c. Relax regulations in the commercial areas on the edge of Town in order to encourage high
revenue generating businesses.
The Committee recognizes the fiscal constraints that the Town is experiencing and is cognizant of
the fact that revenue from businesses is essential if the Town is going to continue providing the
same high level of service that residents have experienced in the past. Consequently, the
Committee determined that it is essential that the Council adopt the proposed revisions to the Traffic
Policy which would allow the Planning Commission/Council the flexibility to approve projects that
would provide revenue to the Town. in addition, the Committee recommended that the Council
explore the possibility of streamlining the review process for high revenue generating projects and
to adopt policy that encourages high revenue generators on the edge of Town which would
minimize the traffic impact from these businesses on the Downtown.
Downtown Parking
4. Address the employee parking problem:
a. Reduce the two-hour time limit for on -street parking to one hour in the Downtown and
provide parking permits to business owners;
b. Business owners may issue dated permits to customers who will be parked longer than one
hour. The permit will be valid all day.
c. 'Valued Los Gatos Customer' should be printed on each permit;
d. Consider using an adhesive backing on the permits so that customers can post them on
their driver's side window in an easily visible location.
The Downtown business owners are concerned that employees are parking in prime on -street
spaces, and that customers are discouraged from shopping in Los Gatos due to the lack of parking
and the parking time limits. Reducing time limits for on -street parking will discourage employees
from parking on Downtown streets, while the parking permits will give downtown business owners
a certain level of control over on -street parking and would minimize the number of tickets given to
valued customers. The parking permits should Indicate that the Town appreciates the customers
patronage.
Property south of Saratoga Avenue and east of Hicihway 17
5. Adopt a policy statement regarding the property located south of Saratoga Avenue and east of
Highway 17. The policy would indicate the Council's support for future development on the property
of a hotel consisting of the following:
a. Up to 300 rooms.
b. A conference facility containing approximately 10,000 square feet.
c. The hotel could be up to three stones tall.
d. Underground parking Is encouraged.
The owners of the Los Gatos Lodge property have indicated that such a policy statement would
_ encourage the sale and development of the property. A shuttle bus could take visitors to the
Downtown area. The Committee indicated that a hotel of this size is needed in the community and
would provide an important source of revenue to the Town.
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: REPORT FROM THE COMMERCIAL SPECIFIC PLAN COMMITTEE
DATE: JUNE 18, 1990
Auto Storage
6. Amend the Zoning Ordinance to allow off -site auto storage in all zones subject to specific standards
with a Conditional Use Permit. Auto dealers have indicated that they are having difficulty finding
adequate auto storage space. The Committee determined that an amendment to the Zoning
Ordinance as described above may lead to an increase in auto storage and would assist the auto
dealers. The requirement for a Conditional Use Permit assures that auto storage lots would be
reviewed on a case -by -case basis to assure that the storage lot would not impact surrounding
properties.
Earthouake Reconstruction
7. Adopt an Urgency Ordinance prohibiting new offices on the ground floor in the downtown
commercial area.
Due to the October 17th earthquake, many buildings in the Central Business District which were
previously occupied by retail businesses are now vacant. The Committee determined that it would
be beneficial to existing downtown retail businesses to reserve ground floor spaces for retail activity.
Retail activity on the ground floor is essential for a successful downtown and creates art interesting
atmosphere which attracts pedestrians. Encouraging new retail businesses also contributes to the
success of existing retail businesses by attracting customers interested in fulfilling a variety of
shopping needs.
Auto Dealerships:
8. Encourage the Chamber of Commerce to work with the auto dealers to form an association to
promote Los Gatos dealerships.
The Committee determined that the auto dealerships could benefit by taking an approach to
promotion similar to that pursued by auto malls. The auto dealerships should work together to
promote Los Gatos Boulevard as an auto row.
EXHIBITS:
1. Draft Resolution concerning property south of Saratoga Avenue and east of Highway 17.
2. Draft Urgency Interim Zoning Ordinance prohibiting new office uses on the ground floor in the
Central Business District and Downtown C-1 Zone.
Car dealers driving $100M in expansions - 2002-02-18 - Silicon Valley/San Jose Business Ji Page 1 of 4
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New car dealers in Silicon Valley are spending an estimated $100
million to expand and improve existing dealerships and to open new
ones, a wave of investment that is also occurring nationwide as new car
dealers come off their best three years in history.
Newcomer Beshoff
Motorcars expects to
break ground in March
on a $20 million, 65,000-
square-foot Mercedes-
Benz dealership across
from Eastridge Mall in
East San Jose. Dealers
up and down the Capitol
Expressway Auto Mall
in San Jose, along
Stevens Creek Boulevard
in Santa Clara and San
Jose and elsewhere in the
valley say they are
spending and plan to spend millions
and service operations.
to update and expand showrooms
The spending comes despite a reduction in national new vehicle sales in
2001 wrought in part by the slowing economy and exaggerated by the
fallout of Sept. 11, despite the plethora of year-end sales incentives from
car manufacturers. The national slowdown was reflected in local dealers'
sales performance, with some dealers estimating as much as a 15 percent
correction from 2000.
And local expectations for the year ahead are mixed. Some dealers
predict sales will be at least as good as 2001's. Others are less sure. The
National Automobile Dealers Association of McLean, Va., projects a 7
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Car dealers driving $100M in expansions - 2002-02-18 - Silicon Valley/San Jose Business... Page 2 of 4
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percent decline nationally in new car and light truck sales this year to • Sales
15.9 million units, though in January sales fell only about 5 percent. • Shoe
• Top c
"I don't know what to expect for 2002," confides Denny Boyle, who
owns Capitol Toyota with partner Jerry Brassfield. "I hope it's about
what we had last year, and that we start to re -cycle into a recovery."
Though not now doing any major
capital improvements at the Toyota
dealership, Mr. Boyle says the company
has invested consistently since 1994.
His most recent bricks -and -mortar
expenditure was $1 million in 1999.
The auto industry's well-being,
including the pace of new car sales, is
not an academic discussion for anyone
interested in the health of the U.S.
economy. The car industry is the largest
component of the U.S retail sector, when counting auxiliary enterprises
such as insurance and financing. It represents about 15 percent of the
nation's $10 trillion economy, says Mark Iuppenlatz, a vice president for
Sonic Automotive Inc. of Charlotte, N.C.
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Sonic, which owns multiple dealerships across San Jose, plans $20
million in major renovations to its Stevens Creek Honda and BMW
outlets as well as its Capitol Expressway Ford shop. The investment
comes even as the company attributes a $28 million decline in total
revenue in the third quarter of 2001 partially to poor performance among
its Northern California operations.
Driving the valley's dealer reinvestment are a spectrum of forces, some
shared by their national brethren, others not. First is the aging of many
valley dealerships, a common phenomenon nationwide. In addition, the
cost of borrowing for expansion or new construction is exceptionally
cheap because of historically low interest rates.
Beyond that, car manufacturers in many cases are pushing dealers to
remodel or rebuild their shops in ways that are consistent with
manufacturer templates, so a Ford, Honda or Volkswagen dealership in
Texas is the same as, or similar to, one in California. The notion draws
on the same branding formula embraced by such successful retailers as
McDonald's or TGI Fridays, where a customer experiences a sense of
immediate familiarity upon entering a dealer's door.
Finally, there appears to be universal sentiment that Silicon Valley has
been and will continue to be an exceptional car market, contributing at
least its fair share to national car and passenger truck sales, which
breached the 17 million mark in 2000 and 2001 and came in at 16.9
million in 1999. (Before 1999, the strongest new car -sales year in U.S.
Nai
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Car dealers driving $100M in expansions - 2002-02-18 - Silicon Valley/San Jose Business... Page 3 of 4
history was 1986, when 16 million cars and trucks were sold, according
to the National Automobile Dealers Association.)
Santa Clara County new car and truck sales by unit were not available
for 2001. In 2000, the county's dealers racked up 130,228 in sales,
according to R.L. Polk & Co.
"San Jose is a great market, a fantastic market. It's taken over from San
Francisco," exudes Lon Normandin of Normandin Chysler-Jeep and
president of the Capitol Expressway Auto Dealers Advertising
Association. "This market is considered one of the top markets in
Northern California, and the manufacturers have put strong emphasis on
this market."
Since 1991, the 22 franchises on Capitol Expressway Auto Mall have
seen their new and used vehicle sales more than double, according to
Jerry Strangis, a consultant to the 13 dealers on the strip. In 2000, the
group recorded sales in excess of $1 billion. It estimates only $850
million to $900 million in aggregate sales for 2001, however.
Mr. Normandin, whose strongest sellers currently are the Chrysler PT
Cruiser and Jeep Liberty, says he is constantly reinvesting in his store --
right now he's improving his paint booth and collision center -- but he
declines to give dollar amounts.
"Silicon Valley has been right in the middle of the (nation's) sales
improvements from 1995, 1996 on," agrees David Spisak, a senior
district vice president for AutoNation Inc., the largest U.S. car dealer and
a publicly traded corporation. "When I worked at the Smythe European
store (at 4500 Stevens Creek Blvd.), we went from selling 1,200 (new)
Mercedes in 1997 to 2,400 in 2001. Everyone has seen significant
increases in sales in the valley."
AutoNation has 14 South and East Bay dealerships, he says, and is
investing close to $7 million in the Stevens Creek operation and another
$500,000 in a Palo Alto shop. It's also building a new $5 million Honda
dealership in Fremont.
Ultimately, of course, the aim is to increase sales. The slower days in
some ways make it the best time to construct. General contractors are
hungrier, and the owners have the time to oversee the projects. And all
hope better days are ahead.
Steve Lewis, president of Bob Lewis Volkswagen Suzuki Hyundai at
Almaden and Capitol expressways, says he's building a new 37,000-
square-foot dealership for his Volkswagen operation. He's also
expanding and improving an existing 30,000-square-foot space for his
Suzuki and Hyundai operations.
Perhaps most significantly, however, he plans a five -story parking
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Car dealers driving $100M in expansions - 2002-02-18 - Silicon Valley/San Jose Business... Page 4 of 4
garage where he expects to keep up to 500 cars in inventory stored. And
the space, he says, still probably won't be large enough. The dealership
was the top -selling Volkswagen seller in the country for four years in the
1990s.
In all, Mr. Lewis says he expects to spend more than $5 million and,
with luck, less than $10 million to get the work done. He doesn't seem
worried that the investment comes amid the down cycle.
"I just know it's going to increase our sales," he says.
Last year, the dealership had more than $100 million in total sales, he
says. Since 1995, sales have climbed more than 40 percent.
Research director SARA HAYDEN and news intern JANET PAK
contributed to this story. SHARON SIMONSON covers real estate for the
Business Journal.
Copyright 2002 American City Business Journals Inc.
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TOWN OF LOS GATOS
TOWN COUNCIL
SPECIAL STUDY SESSION
Los Gatos Auto Dealerships/Los Gatos Lodge
April 29, 2002
TOWN COUNCIL
The Town Council of the Town of Los Gatos met in the El Gatos Room of the Los Gatos Lodge, 50
Los Gatos/Saratoga Road, Los Gatos, California at 4:30 p.m., Monday, April 29, 2002, in special
study session.
COUNCIL MEMBERS
Present: Steven Blanton, Sandy Decker, Steve Glickman,
Joe Pirzynski, and Mayor Randy Attaway.
STAFF PRESENT
Debra Figone, Town Manager; Bud Lortz, Director of Community Development; Police Chief Larry
Todd; Marty Woodworth, Redevelopment Manager; Kevin Rohani,Town Engineer; Orry Korb,
Town Attorney.
OTHERS PRESENT
Ray Davis, Jim Derryberry, Dennis Lowery, Don Kim, Mel Cels, Gloria Wang, Ron Nelson, Al and
Marilyn Friesen, Steve Swanson, Bruce Swanson, Ron Battistella, George Jensen, Bob Gross, Paul
Cimoi, Don McKim, Bill Hirschman,Grant Bishop, Mary Kay Oliphant. Joe Hood, Nancy Bowen,
Greg Stowers
VERBAL COMMUNICATION
Ray Davis spoke in the public interest regarding the Los Gatos Lodge.
ITEM 1: DISCUSSION OF ISSUES AND CONCERNS REGARDING LOS GATOS AUTO
DEALERSHIP
Randy Attaway, Town Mayor, stated that it has been many years since the last time that Council has
met to discuss issues regarding the Auto Dealerships and Los Gatos Lodge.
Debra Figone, Town Manager, discussed the staff report that was sent to Council. The report
discussed Marty Woodworth getting acquainted with key businesses and heard the issues from the
business perspective. The discussion gave businesses an opportunity to feel heard.
Marty Woodworth, Redevelopment Manager, discussed that in January, held individual meetings
with all 7 dealerships. The meetings were to find out what is working for the dealers and looked at
the overall situation. The common threads that came from these meetings were challenges,
opportunities and findings such as:
• The Auto Dealerships bring a lot to the Town, and residents like to have their car serviced in the
Town. The community enjoys not having to go to San Jose for services.
• The Auto Dealerships generate revenue (approximately $2 million annually) used for the General
Fund.
• The competition, such as Capital Expressway and the Stevens Creek Auto Row, have a higher
volume which makes it more difficult to compete.
TC: D 13: ST042902. AutoDealerships-LosGatosLodge 1
Town Council Minutes April 29, 2002
Redevelopment Agency Los Gatos, California
ITEM 1: DISCUSSION OF ISSUES AND CONCERNS REGARDING LOS GATOS AUTO
DEALERSHIP CONT.
* Facilities in Los Gatos are outdated and not up to the 2151 century. The need is for more modern and
bigger facilities.
• Space is limited on the dealership sites to accommodate inventory. Customers do not want to have
to wait 1-2 weeks for a car.
• Los Gatos is a good niche market for higher -end vehicles.
• If there was more land, dealerships would be able to bring in additional brands of vehicles, but
finding a location is challenging.
Randy Attaway, stated it was good to hear everything, including the comments for the future and
will continue to hear any complaints or comments.
George Jensen, Los Gatos Auto Mall, stated Auto Dealerships were scared to ask Council for
anything and that the process is difficult.
Randy Attaway, discussed practices in the past are not always the same situation.
Ron Bastistella, Los Gatos Auto Mall, discussed the difficulty in making improvements to the
Dealerships was difficult and resulted without change.
Randy Attaway, discussed the importance of the community and residents while still trying to
accommodate the Dealerships.
John Moore, Moore GMC, discussed an example of the building process and its restrictions on
Dealerships.
Randy Attaway, stated things such as fire sprinklers are not under the Council's control. However,
the permit process that includes approval of overhangs, and awnings are items that will be discussed
with staff.
Bud Lortz, Director of Community Development, discussed different Town Codes and how it
pertains to the Dealerships.
Bruce Swanson, Swanson Ford, stated more examples of the Town's process and how it was
difficult to get anywhere in the process without becoming frustrated.
Randy Attaway, confirmed the main topics that were being presented in the meeting are auto
storage, zoning, and review the building process.
Public Speaker , discussed advertisement along Highway 85 would be helpful for the Dealerships.
Randy Attaway, stated that it is out of Los Gatos jurisdiction and that CalTrans owned the property.
Steve Blanton, discussed the building and fire code problems along with the CUP and approval
process.
Randy Attaway, continued to thank participants for their suggestions and feedback. The
information gathered is helpful in directing staff.
Bud Lortz, discussed the General Plan and that auto storage issues will be scheduled for Council in
June.
Ron Batistella, Los Gatos Auto Mall, discussed the Planning Commission process and the concerns
with the agenda.
Steve Glickman, discussed the perception of the process from the Auto Dealership viewpoint.
Joe Hood, Anderson Chevrolet, discussed Town's policies on auto storage and zoning limitations
and explained the reasons Auto Dealers would leave the Town.
Bud Lortz, discussed the auto storage problem and the policies that are being reviewed for update.
TC: D 13 : ST042902. AutoDealerships-LosGatosLodge 2
Town Council Minutes April 29, 2002
Redevelopment Agency Los Gatos, California
ITEM 1: DISCUSSION OF ISSUES AND CONCERNS REGARDING LOS GATOS AUTO
DEALERSHIP CONT.
Sandy Decker, stated the feedback is very helpful and will continue to hear suggestions from
businesses.
John Moore, Moore Buick, discussed revenues that are generated could be increased if apartments
were on the lot vs. cars.
Joe Pirzynski, discussed suggestions such as Planning Commission meetings dedicated to
Commercial and Planning Commission meetings dedicated to Residential.
John Moore, Moore Buick, discussed the need to bridge the gap between the factory and the Town
of Los Gatos.
Joe Pirzynski, discussed the characteristics of Los Gatos and the need to continually work with the
Auto Dealers.
Randy Attaway, discussed the process, and that staff cannot change policy. The policies that need
to be revised or changed go to Council for approval. Also, a subcommittee was discussed that
would involve Council working with dealerships and staff.
Steve Blanton, discussed the need to distinguish between a regular parking lot and auto storage.
Sandy Decker, suggested that Auto Dealers work with Bud Lortz on the storage problem.
John Moore, Moore GMC, discussed the storage problem for Auto Dealers and how more efficient
storage would benefit the customer. .
Joe Pirzynski, discussed the standards of parking lots and recommended Planning Commission and
Town Council reconsider the review of the building permit process, special events and zoning
issues.
Randy Attaway, discussed that the Council is receptive to reviewing the building permit process,
special events, and zoning issues, but would need further education on these items.
John Moore, Moore GMC, discussed that 12 years ago, the North Forty Committee discussed the
potential of an Auto Mall.
Randy Attaway, stated that the community was not behind it.
John Moore, discussed and asked questions regarding the North Forty property.
Bud Lortz, stated North Forty discussions will happen in the near future.
Public speaker, suggested that the Town assist the dealers with advertising.
Steve Blanton, discussed the disclaimer on the Town advertising for the Auto Dealers.
Steve Glickman, discussed the appropriate spending of Town money and that the Town provide
staff support.
Sandy Decker, discussed the relation between the Town and Auto Dealers needs to be a package,
and would encourage ways to work with staff to explore options in making the process more
efficient.
Randy Attaway, discussed that there is money in the budget to support staff assistance.
Marty Woodworth, recommended more ideas for staff.
Steve Glickman, discussed how the neighborhoods might be impacted by the Auto Dealers and the
problems neighbors might have with changes. The Auto Dealers and neighbors are both important
in making any decisions.
Randy Attaway, stated the effectiveness of everyone taking this problem serious.
Ray Davis, spoke in the public interest.
TC: D 13: ST042902.AutoDealersh ips-LosGatosLodge 3
Town Council Minutes April 29, 2002
Redevelopment Agency Los Gatos, California
ITEM 1: DISCUSSION OF ISSUES AND CONCERNS REGARDING LOS GATOS AUTO
DEALERSHIP CONT.
Bill Hirschman, spoke in the public interest in support of the Auto Dealers and discussed the
problems the Auto Dealers have with the building permit process.
Mr. Derryberry, spoke in the public interest and applauded the efforts being made by Council and
staff.
Randy Attaway, stated the first part of the meeting is over.
ITEM 2: DISCUSSION OF RESOLUTION 1990-135 REGARDING DEVELOPMENT
GUIDELINES FOR THE LOS GATOS LODGE PROPERTY
Start Time: 6:05 p.m.
Randy Attaway, stated that the session was in order.
Bud Lortz, discussed the 12 year old resolution that was passed in 1990.
Randy Attaway, discussed the resolution.
Bud Lortz, discussed that there is no application pending.
Randy Attaway, discussed (a. Up to 300 rooms) of the resolution
Joe Pirzynski, discussed that more education would need to be provided for the Town to approve
300 rooms.
Steve Blanton, discussed concerns about additional rooms but would consider it.
Sandy Decker, concurred with Steve Blanton. Discussed the concerns with the property and
discussed that the design is important and it has to fit with the community.
Steve Glickman, discussed what would be acceptable.
Randy Attaway, discussed how up to 300 rooms would affect the public and Caltrans.
Joe Pirzynski, discussed that further information would need to be provided regarding significant
impact of traffic.
Sandy Decker, discussed the impacts of the Los Gatos Hotel and that there may be possible ways to
minimize the traffic.
Randy Attaway, discussed that the number of rooms was not decided. The next section in the
resolution is (b. conference facility containing approximately 10,000 square feet).
Joe Pirzynski, discussed the elements that a conference facility might bring to the community.
Steve Blanton, concurred with Joe Pirzynski.
Steve Glickman, concurred with Joe Pirzynski except that 10,000 square feet may not be
appropriate for the lodge.
Randy Attaway, discussed that 10,000 square feet is not decided but a conference facility is
acceptable. The next section of the resolution is (c. Up to three stories tall)
Steve Glickman, discussed the necessity for three (3) stories to accommodate the 300 rooms.
Randy Attaway, discussed the hillside and the placement of the units.
Steve Glickman, discussed that further information would need to be provided for three (3) stories.
Steve Blanton, discussed that design of the three (3) stories is essential.
Joe Pirzynski, discussed the importance of open space in the community and the neighborhoods
surrounding the property.
Randy Attaway, discussed the concerns and design of the three (3) stories and that the three stories
was not decided. The next part of the resolution (d. an underground parking facility) and Sale of
units.
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