Tysons auto dealers prepare to cash in, relocate
For years, Tysons Corner auto dealers have cajoled, advised, poked and prodded customers in their showrooms through the sometimes wrenching decision over what car to buy.
Now the dealers themselves are the ones wrestling with a big financial choice: how long to hold onto their increasingly valuable properties.
When Metro comes to Tysons in 2013, it will run right down Route 7, past the auto dealerships that located there in bunches 30 and 40 years ago. Fairfax County officials, with a new comprehensive plan that urges high-density development and walkability, don't see a place for businesses that require wide surface parking lots selling the very product -- cars -- on which Tysons has become overly reliant. The county encouraged dealers to leave Tysons by zoning more than 100 acres along Route 50 in Chantilly for auto sales.
"I think it's inevitable for all of them" to leave, said Gerald L. Gordon, president and chief executive of the Fairfax County Economic Development Authority. "The increasing value of the land is just going to accelerate it. There's really no need for them to be in Tysons Corner."
Auto dealers hold nearly 90 acres in Tysons, but the migration out -- and the cashing in -- has already begun.
Moore Cadillac made one of the biggest deals to leave Tysons to date. Built by Jacques J. Moore Sr. in 1977, the dealership owned seven acres at 8525-8527 Leesburg Pike, a stone's throw from an entrance being built to the Tysons West Metro station. Moore sold the property to JBG, a Chevy Chase developer, last year and closed the dealership. Moore now sells Cadillacs in the Chantilly auto park and JBG is planning "Tysons West Promenade," a retail destination of up to 1.5 million square feet, including new offices, condominiums and a hotel.
"It all comes down to a simple matter of economics," said Martin B. "Art" Walsh, a Tysons land-use attorney who represented JBG in the deal. "It's how much money you can make selling cars versus how much the land is worth for a mixed-use development under the new plan approved by the board of supervisors."
'SITTING ON GOLD DUST'
Bob Raczynski, a vice president at Grubb & Ellis who has brokered 22 auto dealership sales locally, said dealers in Tysons have a handful of options. They can sell and retire from the auto business. They can sell and lease the property back until redevelopment plans are ready. Capital Automotive Group, based in Tysons, specializes in such deals. It purchased the nearly 20 acres beneath Rosenthal Automotive dealerships selling Jaguar, Land Rover, Honda, Nissan and other makes.
Or, providing they do not encroach on the territory of another dealer of the same manufacturer, dealers can sell and relocate. Raczynski said dealers in the Washington market are now looking as far out as Fauquier County for new locations.
But economics dictate that they will go -- one way or another, Raczynski said.
"The whole dynamic is really changing right now," he said. "They're sitting on gold dust and they're cashing in. And the car business, if you take a snapshot from the current economic climate, the car dealerships aren't making that much money and most of the money is on service."