NEW YORK - General Motors will join with the Potamkin Auto Group to develop a $50 million, six-franchise auto mall on an abandoned block in East Harlem, the two announced here last week.
Plans to develop the blighted site into an auto mall were disclosed by Potamkin last year, but no partners had been signed at the time. Under the deal announced last week, GM will open a Chevrolet-Saturn dealership to be owned by a minority dealer, while Potamkin will own and operate a Cadillac-Hummer dealership.
Negotiations are under way with Japanese and European brands to open two more dealerships on the site, says Alan Potamkin, co-chairman of the Potamkin Auto Group.
Potamkin says GM will spend about $17 million to construct the Chevrolet-Saturn dealership, which will occupy about 30 percent of the mall as a lessee-tenant. Potamkin Group will be the mall's landlord, responsible for excavation, environmental cleanup, preparation and continuing maintenance, he says.
The three-story mall will have 300,000 to 400,000 square feet of retail and common space and employ as many as 400 when it opens in 2005. Potamkin projects combined sales of 15,000 new and used units annually.
Harlem, with a population of about 400,000, lost its last auto dealership in the early 1980s.
The announcement on Thursday, June 19, drew most of GM's top leadership, including CEO Rick Wagoner. Jesse Jackson and New York local and state officials, including Mayor Michael Bloomberg, also attended.
"Harlem has been underserved when it comes to new vehicle sales and service," said John Smith, GM group vice president of sales, service and marketing. "GM itself hasn't had a dealership in Harlem for 40 years."
Wagoner said the owner-operator of the Chevrolet and Saturn dealership will be announced soon. He said GM has 379 minority-owned dealerships - "significantly more than anyone in the industry, and they are profitable, too."
New York City owns the lot on which the auto mall will be erected, and the city's Industrial Development Agency will issue $21 million in tax-exempt bonds to help finance the facility, Bloomberg says.
The Potamkin Auto Group, based in Coral Gables, Fla., has annual sales of more than $1.6 billion and operates 70 dealerships in eight states.