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Home My WebLink About17a. Powerpoint Champion Fiat Champion Fiat Champion Fiat (& Alfa Romeo) (& Alfa Romeo) 9715 Firestone Blvd. 9715 Firestone Blvd. Downey, CA Downey, CA Who is Fiat? Who is Fiat? 9 th largest automobile manufacturer in the world th 9largest automobile manufacturer in the world   Fiat also owns: Fiat also owns:   Alfa Romeo Alfa Romeo   Ferrari Ferrari   Masserati Masserati   Dodge/Chrysler/Jeep Dodge/Chrysler/Jeep   165 new Fiat dealerships awarded nationally 165 new Fiat dealerships awarded nationally   Champion Fiat Downey has been approved by Fiat and Champion Fiat Downey has been approved by Fiat and   would be the only dealer in this area (including Cerritos) would be the only dealer in this area (including Cerritos) Fiat 500 Fiat 500 Fiat 500 Fiat 500 Alfa Romeo Alfa Romeo Alfa Romeo Alfa Romeo The Site The Site 9715 Firestone Blvd. 9715 Firestone Blvd. Acquired by the Acquired by the   City in August City in August 2010 via public 2010 via public auction auction Purchase Price – Purchase Price –   $1.9 million (total $1.9 million (total cost approx. $2 cost approx. $2 million after taxes million after taxes and fees) and fees) The Proposed Improvements The Proposed Improvements The Proposed Improvements The Proposed Improvements The Proposed Improvements The Proposed Improvements Background Background City acquired 9715 Firestone Blvd. in August 2010 City acquired 9715 Firestone Blvd. in August 2010   Mr. Antepara owner/operator of Champion Mr. Antepara owner/operator of Champion   Dodge/Jeep/Chrysler submitted a letter of intent Dodge/Jeep/Chrysler submitted a letter of intent from Fiat to open a new dealership in the City of from Fiat to open a new dealership in the City of Downey. Downey. Several months of negotiations resulted in a Several months of negotiations resulted in a   proposed two part transaction that would bring Fiat proposed two part transaction that would bring Fiat to Downey: to Downey: The Land Transaction (sale of 9715 Firestone Blvd.) The Land Transaction (sale of 9715 Firestone Blvd.)   A loan in the form of a 5 year operating covenant A loan in the form of a 5 year operating covenant   The Land Transaction The Land Transaction Market Rate Sale –$3.8 mil. Market Rate Sale –$3.8 mil.   $3 Mil. First Note (City) $3 Mil. First Note (City)   5.5% interest rate 5.5% interest rate   20 year term 20 year term   Annual principal and interest to the City -$247,680 Annual principal and interest to the City -$247,680   $800,000 Balance $800,000 Balance   CDBG Section 108 funds CDBG Section 108 funds   Econ. Dev. Grant Econ. Dev. Grant   Redeveloping a blighted property Redeveloping a blighted property   23 new jobs created 23 new jobs created   The Land Transaction – The Land Transaction – Benefits to the City Benefits to the City Increased Interest Earnings Increased Interest Earnings   5.5% interest vs. .44% interest 5.5% interest vs. .44% interest   $1.8 mil. more to the City over the 20 year term $1.8 mil. more to the City over the 20 year term   Redevelopment of a Prominent Blighted Redevelopment of a Prominent Blighted   Property Property Creation of 23 New Jobs Creation of 23 New Jobs   Increased Non-Discretionary Income Increased Non-Discretionary Income   Sales & Property Tax Sales & Property Tax   Interest on Investment Interest on Investment   The Operating Covenant The Operating Covenant What is an Operating Covenant? What is an Operating Covenant?   Tool used to ensure that important companies will Tool used to ensure that important companies will   stay in business for a minimum specified time. stay in business for a minimum specified time. Terms of the Proposed Operating Covenant Terms of the Proposed Operating Covenant   5 year term 5 year term   Must be operated as a new car dealership (Fiat) Must be operated as a new car dealership (Fiat)   Required improvements to the building and site (at Required improvements to the building and site (at   owner’s sole expense) owner’s sole expense) Must maintain the property Must maintain the property   City investment forgiven after 5 years City investment forgiven after 5 years   Cost to the City Cost to the City   $800,000 $800,000   Safeguards Safeguards The Land Transaction The Land Transaction   The City of Downey -first position on the The City of Downey -first position on the   property property Foreclosure option in the event of default Foreclosure option in the event of default   City could retain ownership City could retain ownership   The Operating Covenant The Operating Covenant   $800,000 prorated over 5 years $800,000 prorated over 5 years   $160,000/ year $160,000/ year   Prorated repayment in the event of default Prorated repayment in the event of default   Secured by personal guarantee Secured by personal guarantee   5 Yr. Revenue Projection 5 Yr. Revenue Projection Gross Sales (including new Downey Sales New Revenue Calendar and used car Taxable Sales at Tax Revenue Tax Increment Generated to the Year sales, parts, and 75%@ 1%RevenueCity service) $70,100 $4,500,000 $3,400,000$34,000$36,100 2011 (six months) (Fiat only) 2012 $217,400 $22,267,000$16,700,000$167,000$50,400 (Fiat and Alfa Romeo) 2013 $291,400 $32,000,000$24,000,000$240,000$51,400 (Fiat and Alfa Romeo) 2014 $377,400 $43,333,000$32,500,000$325,000$52,400 (Fiat and Alfa Romeo) 2015 $410,900 $47,667,000$35,750,000$357,500$53,400 (Fiat and Alfa Romeo)