DOWNEY - Calling it an opportunity to create new jobs and a solid source of sales tax revenue, the Downey City Council on Tuesday unanimously agreed to contribute $1 million in redevelopment funds to help bring a new Chrysler/Jeep dealership to Downey.
Paul Antepara, owner of Champion Dodge at 9655 Firestone Blvd., wants to merge his existing dealership with a Chrysler/Jeep dealership. Chrysler, however, is asking for $2.9 million in working capital.
Antepara said he has $1.9 million but asked the city to contribute the remaining $1 million.
Brian Saeki, director of community development for Downey, said in a staff report that "an investment by [Downey] is warranted in order to increase the employment and tax revenue base within the city."
The City Council agreed to pay a $500,000 lump sum payment, with the remaining $500,000 paid out over a 10-year period. The city's initial $500,000 payment will be paid with unencumbered redevelopment funds. The additional $500,000 will be paid by sales tax revenue generated by the dealership.
Per terms of the deal, Antepara is required to create and keep 12 full-time jobs, and sales tax received by the city must be equal to or greater than $275,000 on an annualized basis throughout the 10 years. If the conditions are met, Downey would ultimately receive a minimum $2.75 million in sales tax revenue over the 10-year period.
Should the Chrysler/Jeep dealership generate a minimum of $350,000 in yearly sales, any additional sales tax would be shared by Downey and the dealership.
The amount of sales tax shared between Downey and the Chrysler/Jeep dealership is based on a sliding scale. In years one and two, the sales tax would be evenly split. By year six, Downey would receive 90 percent of sales tax revenue and the dealership 10 percent.
If terms of the deal are not met, Saeki said the city "may draw upon a personal guarantee secured by Mr. Antepara which would allow [Downey] to recoup its investment."
Councilman David Gafin questioned if the existing Champion Dodge property had the capacity to house an additional dealership. Speaking at Tuesday's meeting, Antepara said his dealership has a current inventory of 250 cars, and he anticipates an additional 60 new vehicles with the Chrysler/Jeep dealership.
Councilman Mario Guerra said car dealerships are a city's "bread and butter" and "a lot of cities are looking for exactly these things.
********** Published: June 11, 2010 - Volume 9 - Issue 8