Councilman Harry Sidhu cast the only vote against the $5.65 million deal.
by Diane Reed
The Orange County Register - Thursday, December 15, 2005
The owners of Weir Canyon Honda and Weir Canyon Acura struck a deal with the City of Anaheim, Dec. 6, to acquire the 9.5 acres they have been leasing from the city, since 1985.
The new owners plan a $10 million expansion and upgrade at the Honda dealership.
The $5.65 million sale was approved by the City Council on a 4-1 vote with Councilman Harry Sidhu casting the lone vote against the transaction.
DWWH, Inc. the firm that operatesthe dealerships had been involved in negotiations with the city over the property for approximately 18 months.
"It's been a long process," said A.J. Damato, president of Weir Canyon Honda/DWWH, Inc.
"We expect to break ground in the first quarter of 2006," he added. "We'll be building a new Honda showroom and will upgrade the facility to the new Honda image standards."
Damato expects the construction to be complete by next fall.
"We think it is about a 9-month project," he said.
Construction at the Honda dealership will include the addition of more than 9,000 square feet of improvements and extensive interior and exterior renovations.
The firm has already invested $2.2 million in a new Acura showroom. The buyers received credit for that investment from the city, as part of the sale.
Sidhu objected to the sale on several levels.
"There was no current fair market value appraisal for this land," he said. "The city had 'guestimated' value based on a summary appraisal report that was 18-months old."
Such appraisals are good only for six months and the report stated that.
When Sidhu questioned the fair market value of the property, he said that representatives of the lessee, DWWH, Inc., "automatically raised the offer by $350,000."
With that, Sidhu became even more curious about the deal.
"In my opinion," he said, "this conveyance was not in the best interests of the City and its 345,000 taxpayers."
"The highest and best use would be to hold the property as a relatively long-term leased investment," he said.
Sidhu also questioned the rush to complete the deal at this time.
"The process should have been opened to public bid to assist in determining the proper market price valuation of this land," he said.
Mayor Curt Pringle said, however, that he believes the sale was appropriate.
"They want to invest $10 million or so in the property. I think the sale was the proper leverage to maximize the return to the Anaheim Taxpayers and keep a car dealer in town."
Councilwoman Lorri Galloway who voted for the sale, said that she wasn't for it, initially.
"I wasn't in favor of going ahead with this," she said, "But we had to look at the big picture. The dealership produces almost $1 million a year in sales tax revenue."
She added that the dealers told the council that this was, "a matter of survival."
"If we didn't sell them the property, there was a Yorba Linda site they were looking at," she said. "We wanted to keep them in Anaheim."
"As far as the appraisal goes," Galloway said, "The property is only worth what someone will buy it for." The city acquired the property in the 8300 block of East La Palma Ave., from the Anaheim Mutual Water Company in the 1960's, along with several other sites in the area, all of which were intended for the development of water wells.
Later, it was determined that the wells would not be appropriate for the City's domestic water use. So, the triangular piece of land was leased, for 25 years, to the car dealerships.
The existing Honda dealership was built at that time and the dealers have leased the site from the city ever since.
"They are a good business," Pringle said, "one you want to have in your town."
The owners of Weir Canyon Honda and Weir Canyon Acura struck a deal with the City of Anaheim, Dec. 6, to acquire the 9.5 acres they have been leasing from the city, since 1985.
The new owners plan to expand and upgrade the Honda dealership.
The $5.65 million sale was approved by the City Council on a 4-1 vote with Councilman Harry Sidhu casting the lone vote against the transaction.
DWWH, Inc. and the city had been involved in negotiations over the property for approximately 18 months.
"It's been a long process," said A.J. Damato, president of Weir Canyon Honda/DWWH, Inc.
"We expect to break ground in the first quarter of 2006," he added. "We'll be building a new Honda showroom and will upgrade the facility to the new Honda image standards."
Damato expects the construction to be complete by next fall.
"We think it is about a 9-month project," he said.
The firm has already invested $2.2 million in a new Acura showroom. The buyers received credit for that investment from the city, as part of the sale.
Construction at the Honda dealership will include the addition of more than 9,000 square feet of improvements and extensive interior and exterior renovations.
Sidhu objected to the sale on several levels.
"There was no current fair market value appraisal for this land," Sidhu said Dec. 7. "The city had 'guestimated' value based on a summary appraisal report that was 18-months old."
Such appraisals are good only for six months and according to Sidhu a disclaimer in the report stated that was the case.
When Sidhu questioned the fair market value of the property, he said that representatives of the lessee, DWWH, Inc., "automatically raised the offer by $350,000."
With that, Sidhu became even more curious about the deal.
"In my opinion," he said, "This conveyance was not in the best interests of the City and its 345,000 taxpayers."
"The highest and best use would be to hold the property as a relatively long-term leased investment," he said.
Sidhu also questioned the rush to complete the deal at this time.
"The process should have been opened to public bid to assist in determining the proper market price valuation of this land," he said.
Councilwoman Lorri Galloway who voted for the sale, said that she wasn't initially for it, either.
"I wasn't in favor of going ahead with this," she said, "But we had to look at the big picture. The dealership produces almost $1 million a year in sales tax revenue."
She added that the dealers told the council that this was, "a matter of survival."
"If we didn't sell them the property, there was a Yorba Linda site they were looking at," she said. "We wanted to keep them in Anaheim."
"As far as the appraisal goes," Galloway said, "It is only worth what someone will buy it for."The city acquired the property in the 8300 block of East La Palma Ave., from the Anaheim Mutual Water Company in the 1960's, along with several other sites in the area, all of which were intended for the development of water wells.
Later, it was determined that the wells would not be appropriate for the City's domestic water use. So, the triangular piece of land was leased, for 25 years, to the car dealerships.
The existing Honda dealership was built at that time and the dealers have leased the site from the city ever since.