SAN JUAN — Another luxury car dealership is on its way into town here, as the city and developers continue to negotiate pending economic incentive agreements.
Owners of San Juan’s Mercedes-Benz and Audi locations, which opened in December 2010 and February of this year, respectively, are on track to have a third dealership open before the end of the year, said Alfonso Cavazos, an owner of the dealerships and manager of Mercedes-Benz.
“That shows a commitment that they believe in San Juan,” City Manager J.J. Rodriguez said.
Work has already begun on the planned Jaguar and Land Rover site at the southeast corner of U.S. 83 and Stewart Road, between Mercedes-Benz just to the north of the expressway and Audi less than half a mile east. The city gave plat approval for the subdivision Sept. 11.
Owners plan to throw up a temporary facility to be finished in just 45 days to start selling cars, Cavazos said. They will then begin work on a permanent dealership just behind it and, when that it complete, demolish the temporary building for a parking lot.
“We wanted to do that because we felt bad for the owners of Jaguar and Land Rover (vehicles),” Cavazos said. “We see the demand here on the frontlines.”
The Ramirez Family Dealership in McAllen, which included Jaguar, Volvo and Land Rover, ceased operations last year after apparent financial problems. Cavazos said a number of its former customers have come to him.
Meanwhile, the city is hoping the dealerships – which produce city sales tax only on service, not vehicle sales – will spur the creation of other businesses, like restaurants to appeal to car-shoppers.
“We’re going to keep pushing,” said Bobby Rodriguez, president of the Economic Development Corp. board. “That corridor is for real.”
San Juan city leaders solidified paperwork April 24 to reimburse part of Mercedes-Benz’s property tax during its early years, putting ink to a verbal agreement made in 2009.
The 380 agreement – an incentive so named for the chapter of Texas Local Government Code which allows it – requires the city to pay the dealership the equivalent of 90 percent of its property tax after its first year, 85 percent its second year, 75 percent its third year, 50 percent its fourth year and 25 percent its fifth year.
The dealership got a check for $19,000 to pay it back for 2011.
“They finally paid me, thank God,” Cavazos said.
But no 380 so far exists for Audi or Jaguar/Land Rover, which Cavazos and his partners are expecting.
“The agreement was that we would get that same agreement for as many stores as we’d bring,” Cavazos said.
But while the dealership owners worked closely with the development corporation on such initial promises, only the city itself can draft a 380. Development corporations in cities with more than 20,000 people cannot grant money directly to businesses.
The city manager said he was unaware of requests for incentives from dealerships other than Mercedes-Benz.
“They have to go through the process,” he said. “The folks at the dealership would have to approach the city.”
Additionally, development corporation board members will discuss tonight whether to grant some $100,000 worth of infrastructure assistance to the Jaguar/Land Rover site.
Cavazos expressed hope that he could get some help with water and sewer lines and confidence that the city would eventually approve 380s to pay back a portion of property tax for Audi and Jaguar/Land Rover.
“We understand that we don’t want to know what goes into the sausage – we don’t want to know how politics is made,” Cavazos said. “(They) followed through, so we appreciate it and it might take some time, but we’ll get it for the others as well.”
Elizabeth Findell covers Pharr, San Juan, Alamo, the Mid-Valley and general assignments for The Monitor. She can be reached at email@example.com and (956) 683-4428.
Follow Elizabeth Findell on Twitter: @efindell