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Audi dealership hits high gear in Temecula

The rhythmic thumps of a concrete pump truck on Temecula’s northern flank were music to the ears of city officials as they recently marked the start of work on the 17th new car dealership within their boundary.

The ceremony to preview the arrival of an Audi dealership marked another milestone in Temecula’s march toward regional sales tax dominance. That revenue edge, which Temecula has maintained since it became a city, is crucial as municipal budgets are increasingly stretched by infrastructure, maintenance and public safety costs.

The July 13 event also marked a new notch in Temecula’s belt as it seeks to become a magnet for high-end shoppers. For the incoming auto dealership, the ribbon cutting signaled the entry of a longtime Carlsbad company into the fast-growing southwest Riverside County marketplace.

“We’re really excited to be here,” said Ted Hoehn, whose family traces its automobile roots to 1928 in Tennessee. For years, Hoehn Motors had its eye on the 4.5-acre site that overlooks Interstate 15, he said.

“It’s going to be stunning and perfectly sized,” Hoehn said. “We’re so thrilled. We’re over the moon about it.”

The Audi dealership will be the company’s first outside the city of Carlsbad, and

the new product will be added to a portfolio that includes Acura, Buick, Cadillac, GMC, Honda, Jaguar, Land Rover, Mercedes Benz and Porsche.

The tab for the project is expected to total $20 million in land and construction costs. Its payroll is expected to swell to 65 workers, several of them members of the Hoehn family, within six months of its opening early next year.

Work began on the project at the end of May, seven months after it was approved by city planning commissioners. Concrete block walls were taking shape at the time of the ground-breaking ceremony, which attracted about 45 people to the site not far from the intersection at Ynez Road and Temecula Center Drive.

The 37,500-square foot complex will be 32-feet tall at its highest point. The facility’s “jewel box” showroom will take advantage of its prominent location alongside the freeway.

When it begins operations, Audi will operate directly south of a Mercedes Benz dealership that opened about two years ago. City officials have reported that the Mercedes Benz dealership sold more than 1,500 cars – sales revenue that exceeded $92 million – in its first year of operation.

The two dealers are more than a mile from Temecula’s main cluster of auto dealers. They are tucked into a corner of the commercial portion of the Harveston planned community that has sprouted along Temecula’s northern boundary.

That 1,921-home subdivision, which surrounds a man-made lake, was approved by the Temecula City Council in August 2001.

All of Harveston’s residential areas have been built, but a large chunk of its commercial land remains vacant, said Luke Watson, Temecula’s community services director. City officials hope that the new dealerships will attract more of their kind to that area.

Temecula currently has 16 dealers that sell new motor vehicles and 29 that sell used vehicles, according to city officials. That’s more than the combined number of dealerships in Murrieta, Lake Elsinore, Menifee and Wildomar.

The importance of Temecula’s car dealers to its workforce and sales tax base is frequently underscored by city officials. The council has formed a subcommittee that has the sole purpose of luring luxury car dealers to the city.

Because of its location and other factors, Temecula emerged as a retailing hub before waves of rapid growth began sweeping over the region. Numerous car dealers were thriving in the community when Temecula became a city in December 1989 with about 27,000 residents.

The fledgling city maintained its regional dominance as it attracted more car dealers, new shopping centers and a regional mall.

Those dealerships helped fuel a broadening stream of sales tax revenues that aided in the construction of road and freeway improvements, parks, community centers, museums and a string of other amenities. The city’s population is currently approaching 110,000, and it is expected to someday total about 150,000 residents.

Sales and use taxes are expected to exceed $31 million during the current fiscal year, which makes that revenue category the largest funding source for Temecula.

Those taxes will total about 30 percent of the city’s $69.4 million operations budget for the fiscal year that began July 1.

Sales tax revenue dwarfs the city’s second largest funding source – property taxes – which pay for about 11 percent of its operating costs.

Sales and use tax receipts have grown along with the city. Temecula exceeds its surrounding area as well as the county and state in per capita sales tax revenue, according to city materials.

Because of the time needed to construct and open the Audi dealership, Temecula doesn’t expect to reap a large windfall of sales taxes from the project in the current fiscal year, which ends June 30, said Greg Butler, assistant city manager.

California has a 7.5 percent sales tax, and voters have approved a ½ cent tax to fund county road improvements. Temecula receives 1 percent of the total collected.

Tapping new sources of sales tax has been a high priority for Temecula for many years. Those efforts have intensified as the city ages and grapples with flat revenues, skyrocketing public safety costs, aging city infrastructure and a stretched workforce.

 

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