While I have never met Roger Penske, I know people who have and they tell me he is a person of unquestioned honesty and integrity. His reputation in the racing field borders on deity and we can take great satisfaction in his having acquired four car agencies in our town. So while this week’s cartoon suggests all may not be well it may all depend on your point of view.
According to California law, when a car agency is closed for over a year, permission to reopen must be obtained from other agencies of the same brand within a ten mile radius. For less than a year reopening is automatic. As the old Downey Toyota agency had been closed for almost a year and Toyota Motor Credit would have lost the automatic reopening right, they were actively marketing the agency location and a number of dealers were looking at it. The dealer I talked with said Toyota was asking just over $100,000 a month to lease it, a justifiable amount.
It was Penske who was the final bidder and walked away with the prize. There is no question that Penske has one of the finest management teams around. They are certainly very competent at what they do and they have a responsibility to get the best terms they can for their boss. That deal was cut and put to bed independent of any help from the city. The proof came out on June 9, 1992 when Bill Piercey stood up in open council and said this deal is going through regardless of what happens here tonight. That’s because the arrangements with Toyota Motor Credit were already made and hundreds of thousands of dollars had already been spent on refurbishing the agency before the vote was even taken. Then our Redevelopment Agency gave Penske four hundred thousand dollars up front for renovation and a sales tax rebate of one hundred thousand dollars a year for five years. All the incentives did was subsidize the highest bidder. Who is supposed to be watching over our deal makers? On a deal which was fair and already completed were these incentives necessary? Or would one of these incentives have been enough? Did it have to be both?
This is the type of giveaway that has tainted “Redevelopment.” In this case it is particularly bad because while the first $400,000 came out of Redevelopment funds, the $500,000 will come out of sales tax dollars from the city’s general fund which pays for Police, Fire, and other services. Projects like this is where our extra police have gone. It just seems wrong that when support for our other civic activities are being cut back, ie., Library, Rose Float, Symphony, Theater, Holiday Lane Parade, Chamber of Commerce, that we unnecessarily contribute subsidies to the most successful car dealer in the world.
However, we should take some measure of pride in the race this weekend when the Penske Racing team wins as they probably will, but we should also take pride when our Rose Float wins in Pasadena and even when it doesn’t win every year, for it was built with local tender loving hands and private contributions and without taking money from Police and Fire salaries and positions. We should also take great pride in our other civic organizations and think about how that $100,000 a year would really make a difference for them.