Las Vegas ponders purpose of recession-idled car lots

Cars sales are up this year but not enough to refill all the empty auto sales lots in Las Vegas, one of the cities hardest hit by the recession of 2008. The number of dealerships in Nevada is down to 96, with 65 remaining in the city. Over 20 dealers have closed their doors in the Las Vegas Valley alone.

United Hyundai, Pat Clark Pontiac, Bill Heard Chevrolet, United Jeep Chrysler, Signature Lincoln Mercury and Dodgeland USA have all been left empty along Sahara Avenue, Boulder Highway and Centennial Center Boulevard, according to a story in the Las Vegas Review-Journal by Hubble Smith.

"I don't see the Vegas market turning for a while," Wayne Frediana, executive director of Nevada Franchised Automobile Dealers Association, is quoted as saying.

A few of the lots have reopened under new names, but many remain idle. They are becoming a habitat for graffiti and weeds as the summer of 2011 nears.
"I can see a lot of these properties being redeveloped into live-work projects with office and retail on the ground floor and residential units on top," said commercial broker Tim Shaw.

One local dealer, Tom Saitta, suggested some of the dealerships could be converted into service and repair or collision centers, but it’s unlikely they can all be used that way.

Saitta sold his former Dodge dealership, at Las Vegas Beltway and Rainbow Boulevard, to Gaudin Ford for more than $20 million, despite inquiries from the Ultimate Fighting Championship and a furniture retailer. No opening date for the new dealership has yet been announced.

Vegas was hit hard by an extremely high level of home foreclosures and job losses as people curtailed vacationing and gambling in the city known for what happens there staying there.

Chrysler's dumping of 800 non-performing dealerships nationwide pulled the rug from under three in Las Vegas: United Jeep Chrysler, Jim Marsh Jeep and United Dodge. One other, Integrity Chrysler, closed even before those, due to slumping sales.

"It's the economy, that's what it is," Saitta said. "Those stores that are closed were heavily in debt when the recession hit and they couldn't pay their debt. The Dodge dealership on (U.S. Highway) 95 and Ann Road and the store on Sahara were repossessed because they were leveraged to the hilt."

The Nevada Franchised Auto Dealers Association counted 115,000 new and used vehicle sales during 2010, an 8.7 percent increase over the prior year, but still just over half the peak volume of 227,000 in 2007.

Even still things may be looking up – of 19 lots available during 2010, seven have been leased or sold over the last nine months and five more are in negotiations or escrow. That still leaves at least seven with a dubious future.

Another bright spot is with the increased value and sales volume of used cars some pre-owned car dealers are moving into a high property bracket and may in fact fill one or two of the lots.

The main problem is these large parcels of land are most adaptable to industrial use, but are usually located where zoning would prohibit it.

So you thought Detroit had problems?

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