Lithia dealerships leaving downtown
Lithia Chrysler Jeep Dodge has stood alone on Crater Lake Highway for nearly seven years, the sole occupant of the Oregon Auto Mall schemed up decades ago.
With the Great Recession now in the rearview mirror, four more Lithia Motors dealerships are preparing to migrate out of downtown Medford into new facilities on the highway. The sticker price of the four buildings and the property is between $20 million and $22 million.
"The Dodge store sitting out there by itself wasn't as healthy as it should be," said Dick Heimann, Lithia vice chairman.
The dealerships presently quartered along Central and Riverside avenues are Lithia Honda, which is owned outright by Lithia Motors, along with three dealerships primarily owned by Heimann — Lithia Nissan, Lithia Volkswagen and Medford BMW.
"It's always been Dick's and our intention to move the stores," said Mark DeBoer, who heads up Lithia's real estate operations. "Once we've got permits in hand, we should be open by fall, and for sure by the end of the year for all four."
The Honda dealership will be located on three acres across Coker Butte Road, while the BMW, Nissan and Volkswagen operations will be on the north side of the Chrysler Jeep Dodge store.
"We've been talking about this for 12 to 18 months to make sure it was the right decision for us and customers," DeBoer said. "Long-term, it's going to be beneficial to our customers because our present stores are not very consumer-friendly. They are small, so it's hard to really do business logistically out of them."
Heimann said 10 employees have been added since December and he expects to add another 10 during the rest of 2014.
"Manufacturers claim when you build a new facility sales will go up 20 percent on average — some more, some less," Heimann said. "If you don't get people added and trained ahead of time, they're not going to be ready for the business."
DeBoer said the Honda buildout, including the acquisition of three acres, will cost $6 million. The other three dealerships, which will be accessed off Grumman Drive, cover 16.5 acres and will cost $14-16 million.
The 36,000-square-foot Nissan, 30,000-square-foot Volkswagen and 25,000-square-foot BMW facilities are being built by Adroit Construction. S&B James Construction will build the 30,000-square-foot Honda store.
DeBoer said Lithia Toyota will remain at the intersection of Riverside Avenue and East McAndrews Road.
"They've just gone through a $1.5 million remodel," DeBoer said.
Capital Automotive REIT, a publicly held real estate investment trust based in Virginia, owns the downtown property. Lithia sold its property to the REIT in the late 1990s and then leased it back.
"We've given (Capital Automotive) plenty of notice so they can have somebody waiting when we leave," Heimann said. "We're all invested in downtown. (The corner of Jackson and Central) is busy, so someone will come in with a restaurant or retail, which will invigorate the area with a different type of business."
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter @GregMTBusiness and read his blog at www.mailtribune.com/Economic Edge.