Council drives toward car deal

Lolita Harper

NEWPORT BEACH -- Council members on Tuesday unanimously approved a

sales tax split with the owner of a Lexus dealership in order to lure

him and his multi-million dollar business to town.

The City Council voted 6 to 0, with Mayor Tod Ridgeway recusing

himself, to share 50% of the sales tax generated from the proposed

eight-acre dealership owned by David Wilson as an incentive to build

a $55-million project on the corner of Jamboree Road and MacArthur

Boulevard.

“I like to look at the glass-is-half-full approach,” Councilman

Steve Bromberg said about the proposed deal. “And looking at it that

way, we are going to make an awful lot of money.”

Ridgeway, who has been vocally supportive of attracting more car

dealerships to the city, excused himself from the vote. Ridgeway owns

property more than 2,000 feet away from the proposed Lexus dealership

site, which is well beyond the 500 feet that constitutes a conflict

of interest, but said he wanted to quash any appearance of

impropriety.

The proposed plan calls for the city to pay Wilson 50% of the

local sales tax generated at the site, considering he continues to

operate a Lexus dealership and it continues to generate sales tax,

according to a staff report. The city’s return to Wilson would be

capped at $9.5 million, plus interest of 5% per year.

Wilson was not on hand to comment on his proposed project and no

one from the audience spoke about the issue. Council members

discussed it briefly, but there were no contentious aspects to the

proposal.

Councilman Dick Nichols was concerned about the sales tax from

leased vehicles that was a hurdle in terms of the Fletcher Jones

incentive program of 1995, in which the city gave the Mercedes

dealership eight-acres of land and a similar tax-sharing incentive.

Nichols wanted to make sure that leased vehicle sales were counted

toward the Newport Beach sales tax.

Asst. City Manager Sharon Wood said the city has worked out those

kinks and, in addition, state law has also been changed to include

leases in local tax revenue.

Wilson said he is in the process of buying two lots on the

southwest corner of Jamboree Road and MacArthur Boulevard, owned by

Tony Watson, which currently house an Avis storage site and office

buildings.

The entire project, including purchasing the property, demolishing

the current buildings and developing a car dealership, will total

between $50 million and $55 million, Bludau said.