Tough to fill
Downtown Medford has become a livelier place in recent years, but a few blocks from Main Street, several large car lots once occupied by Lithia Motors now sit empty.
The largest area is about 7½ acres along Central Avenue at Jackson Street on the site of the former Honda, BMW and Nissan dealerships — all of which moved to new stores on Highway 62. Other empty car lots are on Jackson Street and North Riverside Avenue.
The BMW and Nissan dealerships are principally owned by Lithia vice-chairman Dick Heimann, with Lithia as a minority partner. He also is the principal owner of the Volkswagen dealership, which moved to a Highway 62 store from its former location on North Riverside Avenue.
While the mass departure of dealerships helped create room for The Commons downtown redevelopment project, it also has left some tough spaces to fill.
“Finding a use for those properties is a bit of a challenge,” said Bob LeFeber of Commercial Realty Advisors NW LLC, which is trying to sell the former Honda, BMW and Nissan lots. “We’ve had some tire kickers and some tours.”
Despite the challenge, LeFeber said, the lots are attractive because of their size and the space available to expand the existing buildings.
Lithia moved many of its downtown car lots to a new auto mall on Highway 62, and Medford officials have expressed concern about the empty lot problem, particularly after the city invested about $70 million into redevelopment efforts including The Commons, which features a park and the new Lithia Motors corporate headquarters.
The lots on Central are owned by CAR LIT OR SALE LLC of Virginia with Capital Automotive LP as the manager. In a deal set up years ago, Lithia sold the property to the real estate holding company and then leased back the space.
LeFeber said he’s had some nibbles, mostly from those wanting to open a used-car lot.
The former Lithia BMW and Nissan dealerships are on a 4.43-acre lot that is selling for $3.25 million. The former Honda dealership, on a 3-acre lot, is on the market for $2.5 million.
The pricing of the properties is based on comparable sized cities, and LeFeber said the properties are very affordable compared to larger metropolitan areas such as Portland.
“It’s fine for an asking price,” LeFeber said.
Joan Wilson with Merit Commercial RE LLC said she recently sold five lots on Riverside Avenue, some of which were the former Volkswagen dealership property.
The new owner is ABS Auto Auctions, an auto wholesaler, Wilson said. According to Jackson County records, the five lots totaling about 1.5 acres sold for $323,550 on April 27.
She said she has one remaining half-acre lot, which includes the main building from the Volkswagen dealership and is selling for $976,450.
“We’ve had real good calls, real good interest,” she said.
Deputy City Manager Bill Hoke, who is Medford's main contact for economic development, said he’s had multiple inquiries on the properties, though no serious offers.
“One of the most marketable things about the properties is the parking,” he said.
Even though the buildings were designed for car dealerships, they are fairly open and could be remodeled to accommodate a different type of commercial business, Hoke said.
“They still show well,” Hoke said. “They look good.”
Ron Fox, of Southern Oregon Regional Economic Development Inc., said he’s shown the properties to a few people. He was less certain about the ability to adapt the properties to other uses.
“The buildings are so special-use that it’s very challenging,” he said.
Fox said it’s possible the city might want to consider creating some incentives that would help rehabilitate the empty lots.
“I think Medford is primed for another urban renewal area,” Fox said.
Councilor Clay Bearnson said the council has raised concerns about the empty lots.
“I would like to see something,” he said. “We’ll probably have discussions about what we can do to help get these properties occupied.”
Bearnson said the way the lots are set up is specialized, and he’s not sure what kind of business would be suitable.
“It would be nice if there was another urban renewal district, but that is something we might do down the road,” he said.