El Cajon strikes new pact with Mazda dealership – The San Diego Union-Tribune
EL CAJON —
A move across the street by the Mazda dealership in El Cajon might have a far-reaching payoff for the city.
The Team Mazda of El Cajon dealership was given the green light by the City Council on Aug. 13 to move from its current location at 540 N. Johnson Ave. to 572 N. Johnson Ave. The dealership plans to build a two-story, 18,000-square feet full-service dealership there that will open in 2020.
As part of the council’s approval, the city and dealership entered into a multiyear financial agreement that could bring the city several thousands of dollars through a percentage of Mazda’s revenue.
The city’s operating covenant with Mazda says that for a five-year period, El Cajon will share half the normal sales tax revenue above a base of $325,000 from Mazda. In the event that the dealership goes above $450,000 annually in normal sales tax, the city will share 75 percent of the additional amount of revenue generated.
Sales tax is the city’s most important source of revenue, City Manager Graham Mitchell said.
The city has negotiated similar tax-sharing agreements in the past with local BMW, Mercedes Benz and Honda dealerships.
Since the state in 2011 eliminated local redevelopment agencies, which used a portion of property tax money to encourage development in blighted ares, many jurisdictions have tried to find innovative methods to promote redevelopment.
This is one such way for El Cajon, city staff says, as the Mazda dealership redevelops an existing underutilized site to create a modern facility.
Mazda has been in the city since 2000 when it was at 720 El Cajon Blvd. Mazda owner Jon Kiefer has told the city that it will invest nearly $7 million into the new construction.
The dealership will include a showroom, service workshop, detail bays, parts/tire storage and offices and is expected to be in operation sometime next year.
The site Mazda will build on is an irregularly shaped quadrilateral lot of just over 68,000 square feet. It is currently being used as a vehicle display area for a Kia dealership.
In 2013, the El Cajon City Council approved an exclusive negotiation agreement with Sunroad Enterprises for development of a new 31,000-square-foot BMW dealership at 720 El Cajon Blvd., where Mazda once was.
For nearly 10 years, the city has been trying to encourage the location and expansion of automobile sales and services in the El Cajon Boulevard and Johnson Avenue corridor.
