City Aims for Auto Mall
Jun 14, 2016 09:50AM
By Tori La Rue
Empty fields like this one on the west side of West Jordan will soon be under construction as the population grows. City staff hope an Auto Mall will claim some of that open space. – Taylor Stevens.
By Tori La Rue | [email protected]
Hundred-year-old auto franchise laws within the state that kept dealerships thriving on State Street in Sandy, Murray and other nearby cities locked West Jordan out of the market until recently.
“There were some modifications to state law during the 2015 Legislative session that now make it easier for dealers to open,” Kim Wells, spokeswoman for West Jordan, said. “We think the road blocks have been removed and are moving forward to bring car dealers to West Jordan.”
The required mileage between dealerships of the same brand was changed from 15 miles to 10 miles in the 2015 session, and the composition of the Dealership Advisory Committee, a committee which can suggest that the director of the Utah Department of Commerce override the 10-mile requirement, was changed to include more voices. Before the law change, competing dealers comprised a large majority of the committee which made it challenging for new dealers to be approved, according to Rep. Kim Coleman R-West Jordan.
Jeremy Olsen, economic and development assistance supervisor for West Jordan, said this law change is a game changer in getting auto dealerships into the city. Two auto dealers have been conversing with city staff about building in the city, and one is in the process of trying to get approval from a manufacturer, according to David Oka, the city’s economic development director. Although Oka said he couldn’t release names of the dealers, Kim Wells said they will likely release some type of announcement in June.
“We believe things will move forward quite rapidly,” Oka said.
The city’s taken the first step by purchasing land for a dealership within their new 239-acre Copper Hills Marketplace Development located between 5600 West New Bingham Highway and 9000 South Prosperity Road. The population growth on the west side of West Jordan created a market that didn’t exist 20 years ago, Olsen said.
“When the Mountain View Corridor opened up, it made a retail location that wasn’t there previously,” Olsen said. “Almost every auto mall is off of a freeway exit somewhere, so Mountain View brought us a location that was suitable.”
Convenience is a huge reason why West Jordan could use an auto mall, according to Olsen. Most auto dealerships are by the freeway and state street. The only auto dealerships west of Redwood Road in the county are in West Valley. This leaves western West Jordan residents with a 20 to 30-minute drive each way to auto dealerships.
A city-wide study conducted in August 2013 identified motor vehicle sales and services as the largest unmet retail need in West Jordan. West Jordan’s auto-related business met 13 percent of the total demand, with residents spending more than $138 million in auto expenses within other cities.
“We’d like to keep the tax dollars in our city where they can benefit our community rather than have those dollars go to neighboring cities,” Kim Wells said.
Jan Wells, Chief Administrative Officer for Murray, said she’s not sure if expanding the auto market in the west side of the valley would hurt Murray and other cities on the east side economically.
“I really think it is up to the dealers to decide if they think they will have enough business to build another dealership in the valley,” Jan Wells said. “I’m sure there is a saturation point where you have more dealers in valley than you have people who want to buy cars, but I can understand why people want to produce competition so that the pie is split more evenly.”
Coleman said it’s not about splitting the “pie” more evenly.
“As a free market you’re not splitting the pie into smaller pieces — you are growing the pie,” Coleman said. “We can sustain more in the auto industry. The pie has expanded. Right now populations double while dealerships don’t.”
Olsen said it may still take 18 months to two years to secure West Jordan’s first auto dealer, but he said he’s fairly confident that one dealer will bring other dealers, creating synergy.
“It’s our hope that the auto businesses will be a springboard to other restaurants, banks and other economic development in that part of the city,” he said.