Auto sellers' building plans signal optimism

   Nine auto dealers are planning major construction projects in Colorado Springs, bringing new jobs to the beleaguered building industry and more choices for car buyers in the next year.

   The projects mean dealers are banking on economic recovery, increased consumer spending, a population shift toward the east and additional military troops arriving in town.

   Several used-car outlets are planned - including a market newcomer, a publicly traded retailer - along with a second Honda dealership, two new stores for local Toyota franchises, a new Nissan store, a new Volkswagen store and a new franchise yet to be disclosed.

   The economic downturn has resulted in some delays, though, for two projects announced last year: construction of another Volkswagen location and a store from another national usedcar dealer.

   1. CarMax The Auto Superstore should be first to the finish line, opening June 5 at 4011 Tutt Blvd., near Security Service Field. It's one of several auto dealers to pinpoint the city's fast-growing northeast side as a prime location for auto sales.

   This will be the 96th store in the CarMax Inc. chain and the first in Colorado for the 15-yearold, publicly traded company.

   Holding the title of the nation's largest seller of used cars, CarMax reported $8.2 billion in sales in fiscal year 2008, which ended Feb. 29.

   "This is a growing community - it's the right size for us - and with this addition we'll be continuous from coast to coast," said Craig Meeks, general manager of the new store, who most recently ran a Car-Max in Albuquerque.

   A six-week job-recruiting session to fill 85 openings drew 900 applicants, he said, adding that many were attracted to Car-Max's listing on Fortune magazine's "100 Best Companies to Work For."

   The company typically hires salespeople who don't have an automotive background but who can communicate effectively, he said.
   Local applicants have included educators, retired military and people who have retail sales experience in department stores and home-improvement outlets, Meeks said. Local salespeople will work on commission and salary, and earn an average an annual income in the high $40,000s, he said.

   The company is known for its business model of a no-haggle sales approach with prices below Kelley Blue Book. Comparison prices are posted on all cars, and Car-Max offers reconditioning of vehicles and free market-value appraisals, regardless of whether the consumer plans to sell the vehicle to CarMax. On average, each CarMax store sells about 5,200 used vehicles a year.

   2. Phil Long Dealerships, Colorado's largest privately owned auto dealer group with 17 new-car franchises and 21 used-car locations, will counter the arrival of CarMax by building its third and largest Valucar Supercenter directly east of CarMax on Tutt Boulevard.

   "I think they'll be a good competitor, and we want to be a good competitor," said Bob Fenton, chief operating officer and partner.

   Phil Long is under contract to purchase 2.2 acres and has submitted development plans to the city, he said.

   Valucar, a 10-year-old usedcar franchise owned by Colorado Springs-based Phil Long, is modeled after CarMax's approach of no-haggle sales and posted, below-Blue Book prices, Fenton said. But the philosophy includes perks Car-Max does not, he said, such as longer standard warranties, certified reconditioning and free oil changes.

   "We studied what they did well, found weaknesses in their program and made additions for our customers," Fenton said.

   The new location, which Fenton expects to be completed in October, also will feature a quick lube service, a car wash, a reconditioning shop and 14 service bays for light repairs and maintenance work. An automotive electronics store also will be attached.

   "We have an active customer base of about 175,000 in Colorado Springs, and we've been talking for some time about the need to put a service center and used-car operation in that area," he said. "We've been here since 1945, and we're going to continue to be aggressive and customer centered."

   Sluggish economic conditions have been good for the used-car market, increasing its market share to 60 percent, up from from 50 percent, at stores in his auto group, Fenton said. The new store is projected to sell 250 used cars a month, he said.

   3. L2 Auto, the used-vehicle division of publicly traded Lithia Motors Inc., has delayed plans to build a store in Colorado Springs on land it purchased last year west of CarMax, said Chris Holzshu, vice president and chief financial officer for L2 Auto.

   "We're exploring all our options," said company spokesman Robert Sacks. "For competitive reasons, we can't comment any more."

   The Medford, Ore.-based company opened its first L2 Auto store, which offers an online, Web-based sales process with a no-haggle philosophy, in Loveland last year.

   4. Westminster, Calif.-based Piercey Automotive Group has secured a long-term lease on 10 acres in Powers Auto Park, said Bill Piercey, president.

   Piercey last fall was awarded a Honda franchise in Colorado Springs and announced it would look for a northern location for a 50,000- to 60,000-square-foot dealership.

   The site is directly west of the new Liberty Toyota store under construction, said Fred Vietch, a vice president with Nor'wood Development Group, which is developing the auto park.

   Piercey said development plans were submitted to the city last week, and the store should open within one year.

   5. Site grading has started on 15 acres in Powers Auto Park to build a Liberty Toyota Scion Superstore, slated to open at the beginning of next year.

   The size has grown from 70,000 square feet to 90,000 square feet, said Ray Reilly, general manager.

   "Everything from parts, service and the showroom has been expanded," he said, "because most new Toyota stores increase business by an average of 20 to 25 percent."

   Liberty, owned by the Larry H. Miller Group of Utah, has posted record new-vehicles sales for the past two years at its 5597 N. Academy Blvd. location. Last year, it sold 2,353 new vehicles, Reilly said.

   The new showroom will have themed areas for trucks, sport utility vehicles and hybrids, Reilly said.

   "With so many dealerships going north, this is going to be a huge auto quadrant, which is pretty exciting," he said.

   6. Toyota Scion of Colorado Springs, also owned by the Larry H. Miller Group, has not made progress on building a new dealership on the southwest corner of Powers and Fountain boulevards since it purchased 16 acres last year, said Tim Anthony, general manager of the current store in Motor City.

   "We've bought the land, but there's nothing else to report yet. Both new Toyota stores will be big and probably a clone of one another," Anthony said.

   7. South Colorado Springs Nissan's new dealership is under construction at the southeast corner of Academy and Fountain boulevards, with completion scheduled for November, said Mike Jackson, operating partner.

   Owned by Automotive Management Services Inc. of Daytona Beach, Fla., the 50,000-square-foot store will cost about $8 million and replace a building the dealership is leasing at 175 N. Academy Blvd.

   "Sales have been OK this year - foreign cars get good gas mileage, and that's what everybody's buying now," Jackson said, adding that he expects a sales boost when his new store opens.

   8. Construction of a freestanding Volkswagen store for Heuberger Motors is on hold, according to owner Gunnar Heuberger.

   "We're holding off to see what the market does," he said, adding that he's also waiting to see new Volkswagen products.

   Heuberger snatched up the last piece of vacant land in Motor City in 2005 - 3 acres between Lexus of Colorado Springs and Pikes Peak Acura - and plans to separate his Subaru and Volkswagen franchises.

   9. Al Serra Volkswagen also has been given the go-ahead from the manufacturer to build a new building, said owner and general manager Jerry Colten.

   Colten, who owns four local dealerships, also will build a dealership for a new, undisclosed franchise he's acquiring. It will be located on property he owns in Chapel Hills Auto Mall, adjacent to his Al Serra Chevrolet North and Al Serra Hummer stores.

   Expanded service departments at Colten's two Chevrolet stores also are planned.

   "There's a lot going on. Despite the tighter economy nationwide, Colorado Springs is a booming market for us, particularly the usedvehicle business and economy cars," Colten said.

   10. Phil Long Dealerships also will build a used-car supercenter across from Chapel Hills Auto Mall, as part of Phil Long Ford of Chapel Hills, Fenton said. It is scheduled to open in November. The current used-car facility at the Ford dealership will become an expanded used-car store for Phil Long Hyundai of Chapel Hills.

   CONTACT THE WRITER: 636-0235 or debbie.kelley@gazette.com