Medford's downtown has seen a growth spurt in the past five years, but city officials worry that it could be stymied by the upcoming move of Lithia Motors' dealerships to Crater Lake Highway.
"We are going to have massive acreage that is going to be empty," Councilor Dick Gordon said.
Lithia is building a new complex, known as the Oregon Auto Mall, on Crater Lake Highway, where it will move its Honda, Volkswagen, BMW and Nissan dealerships from downtown.
Altogether, the 29 properties add up to more than 13 acres.
At nearly four acres, the largest property is at the corner of Central Avenue and Jackson Street and houses the BMW and Nissan dealerships.
The Honda dealership to the north is the second largest property, at about three acres.
The properties are clustered along Riverside and Central avenues to the north and south of Jackson Street.
Gordon will participate in a committee authorized by the council that will explore ways to deal with the empty lots.
"It could be an opportunity for us to form another urban renewal district or extend the existing one," he said.
Gordon said the city has wanted to encourage more high-density housing in the downtown, and these empty lots could be an opportunity for that kind of development.
"I see all sorts of items we should be considering," he said.
Councilor Chris Corcoran said the city should be open to as many ideas as possible to deal with the lots.
"I'm tired of Medford thinking small," he said. "I want us to think big."
Lithia Motors recently built a downtown corporate headquarters at the corner of Riverside Avenue and Sixth Street. While it has invested heavily in the downtown, the company wanted to create the Oregon Auto Mall along Highway 62.
"It's inevitable that the downtown is not going to have car dealerships," said Sid DeBoer, chairman of Lithia Motors.
DeBoer said most of the lots are controlled by Capital Automotive REIT, an investment group that leases land across the U.S. for auto dealerships.
Once Lithia moves its dealerships to the auto mall, the leases will be terminated, DeBoer said.
He said the investment group is mostly interested in leasing the properties, not holding onto them for speculation.
"They are just going to be on the market," he said.
Only the Toyota dealership on Riverside Avenue will remain in the downtown because Lithia has made a sizable investment, DeBoer said.
Deputy City Manager Bill Hoke said the city has some time to explore the question of what to do with the lots because Lithia won't be moving the dealerships out until the end of this year or early next.
The city will begin discussions with the real estate investment group to see what its plans are, he said.
"They don't normally own properties and sit on them for speculation," he said.
A representative from Capital Automotive could not immediately be reached for comment Monday.
Some customers at the dealerships Monday realized they would have to take their cars to Highway 62 to get serviced next year.
"If they have to move, they have to move," Matt Wright said. "We all have to be ready for change."
The 55-year-old Applegate resident said he likes the current location, preferring it over Highway 62, which is a lot farther from his house.
He said the move would also create a lot of vacant properties in the downtown, which could require some assistance from the city.
"It's going to be time for urban renewal," Wright said.