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<br />individual dealers. For example, Cerritos, California, is home to
<br />13 dealerships, each between three and 10 acres in size,
<br />occupying over 82 acres of land. There are plans to continue
<br />expanding.
<br />Because they require so much land, auto dealerships are
<br />usually not permitted in central business districts and highly
<br />developed commercial areas. In most cases, the average seven-
<br />acre dealership will be located in a suburb or outlying urban
<br />area because the municipalities involved may offer tax
<br />incentives, better street access, and locations visible from major
<br />arterial roads. However, as suburbia becomes more populated
<br />and new automotive sales continue to decline, communities are
<br />less likely to offer incentives- to <tttract large new dealerships.
<br />The result is that it becomes more costly for prospective auto
<br />franchisers to set up shop. These rising costs are the primary
<br />influence behind the multi dealer sites that have become known
<br />as auto malls. Auto dealers are finding it increasingly feasible to
<br />share lots with other dealers as a means of reducing overhead
<br />costs for all the participating businesses.
<br />Though multifranchised partnerships are very common in
<br />the automotive business, the phenomenon has not gone
<br />unscathed in the court of public opinion. A common complaint
<br />that residents express regarding auto malls concerns the
<br />additional traffic generated on arterial roads and adjoining
<br />residential streets. Still, auto malls have not stirred the level of
<br />controversy that surrounds the newer trend of auto superstores.
<br />
<br />Used Car Superstores
<br />Used car superstores constitute a new development in the auto
<br />business, appearing only within the last five years. The players
<br />include emerging chains such as CarMax (launched by Circuit
<br />City, Inc.), Drivers Mart Worldwide, and AutoNation USA and
<br />CarChoice (both started by Republic Industries, whose chief
<br />executive officer is Blockbuster Video founder Wayne
<br />Huizenga). Circuit City developed its first CarMax superstore in
<br />Richmond, Virginia, in 1993. It occupies 22 acres in an area
<br />previously zoned for business and office developments.
<br />AutoNation and CarChoice followed soon after with superstores
<br />in Dallas and Detroit.
<br />These businesses primarily sell used domestic and foreign
<br />automobiles that are no more than five years old and have fewer
<br />than 70,000 miles on the odometer. They are aiming to take
<br />over a major portion of the $200 billion-per-year used car
<br />market in the U.S. They offer innovative approaches. to selling
<br />cars, such as allowing the customer to shop "haggle free" and
<br />providing various purchase incentives. For example, CarMax
<br />backs every vehicle it sells with a five-day or 250-mile money-
<br />back guarantee, and it claims to price every car "an average of
<br />$500 to $1,200 below book value."
<br />Aside from selling cars, these superstores continue the
<br />trend associated with big box development by providing a
<br />one-stop servicing center. Superstores such as AutoNation
<br />have already revealed plans to finance, sell, rent, lease, and
<br />repair cars at each location. Though these developments
<br />sound like excellent methods for generating extra tax dollars
<br />for municipalities, they average between 28 and 33 acres,
<br />consuming a good deal of land for the revenues they gener-
<br />ate. As with other megadevelopments, these superstores have
<br />tended to locate along highways and major thoroughfares on
<br />the outskirts of urban areas.
<br />
<br />Chris Burke is a research associate with APA in Chicago.
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<br />Recently, however, many suburban municipalities have
<br />become apprehensive about these developments because of
<br />environmental and street access concerns. For example, Gurnee,
<br />Illinois, a small village near the Wisconsin border, recently
<br />debated whether it should allow AutoNation to build a
<br />dealership to accommodate 1,200 cars. AutoNation wants to
<br />build on a wetlands area in return for creating new
<br />environmentally sensitive land in a nearby village along the Des
<br />Plaines River. Gurnee covers the new tax revenue less than other
<br />communities might because it already has an amusement theme
<br />park, Six Flags Great America, and an outlet shopping mall,
<br />Gurnee Mills, which contains more than 200 retail stores and
<br />14 movie screens.
<br />
<br />. Tinley Park,
<br />Illinois, a southwest
<br />suburb of Chicago,
<br />recently received
<br />proposals from
<br />CarMax and a smaller
<br />used car dealer, Value
<br />Stop. AutoNation has
<br />also expressed interesr
<br />in building a
<br />dealership but has not
<br />submitted a formal
<br />sire plan. CarMax has
<br />requested zoning
<br />approval for
<br />approximately 29
<br />acres of
<br />unincorporated land
<br />in neighboring Will
<br />County rhat Tinley
<br />Park has annexed in
<br />order to facilitate the
<br />CarMax development. In the meantime, CarMax has already
<br />received preliminary site plan approval, according to David
<br />Samuelson, planning technician in the Tinley Park community
<br />development department.
<br />Value Stop has requested zoning approval for only 12.28
<br />acres of land and also has received preliminary site plan
<br />approval. Value Stop has been delayed, however, by stormwater
<br />detention problems on its site. AutoNation has not submitted a
<br />site plan, but because superstores average over 20 acres, one
<br />could assume that its approval would make this village of
<br />38,000 people home to more than 2,000 used cars for sale.
<br />Residents and planners are not concerned solely with the
<br />large amounts of land involved in the development of these
<br />superstores. Many associated uses or component activities
<br />account for the largest percentage of profits for these businesses.
<br />According to the National Automobile Dealers Association,
<br />dealers earned an average $300 profit from each used car sale in
<br />1995, while merely breaking even on new car sales. They derive
<br />most of their profits from servicing the vehicles they sell.
<br />Most communities whose zoning accommodates used car
<br />dealers do not allow automotive repair as a principal use unless
<br />specified in the zoning code. Automotive repair is usually
<br />associated as a principal use for new automotive dealers in less
<br />intensive zones, or as a separate use in more intensive zones.
<br />Because auto superstores generally deal in used cars, they would
<br />have to apply for a conditional use permit to conduct repair. This
<br />can vary depending on the type of zone in which the dealer is
<br />located. Typically, automotive repair shops are located in more
<br />
<br />
<br />In most cases, the
<br />average seven-acre
<br />dealership will be
<br />located in a suburb or
<br />outlying urban area
<br />because the
<br />municipalities involved
<br />may offer tax incentives,
<br />better street access, and
<br />locations visible from
<br />major arterial roads.
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