Power Pontiac Buick GMC became the sixth car dealership to flee south Scottsdale's McDowell Road Motor Mile, and experts say each dealership lost is a big hit to the city's sales tax revenue.
Harold Stewart, Scottsdale's economic vitality director, said the loss of each dealership means the loss of about $500,000 to $1 million annually in sales tax.
Power Pontiac, just west of 68th Street on McDowell Road, on Friday joined a growing list of dealerships that have left or intend to leave the Motor Mile. Bill Heard Chevrolet and Scottsdale Audi have closed. Scottsdale Nissan and Scott Toyota have moved to the Mesa Riverview, where the dealers benefit from freeway exposure and sales tax rebates. And Chapman BMW has announced plans to move to Chandler.
Marc Cannon, senior vice president of corporate communications for AutoNation - the Fort Lauderdale-based company that owns a chain of Power dealerships in the Valley and southern California - said Power Pontiac's closure stems from General Motors' plan to consolidate dealership locations, and not because of an economic downturn.
"It's been planned for two years," Cannon said.
Calls to Power Pontiac are being forwarded to Brown and Brown Chevrolet in Mesa. The company maintains three other dealerships on McDowell selling Subaru, Chrysler, Jeep, Isuzu and Hyundai vehicles.
Stewart said city officials for years have anticipated the flight of dealerships from McDowell because the location, which doesn't have immediate access to a freeway and has fallen out of favor with dealers.
The Motor Mile was expected to generate about $8 million in sales tax revenue for Scottsdale in fiscal year 2007-08, city officials have said.
Rick Kidder, Scottsdale Area Chamber of Commerce president, said auto sales are down nationwide because of the credit crisis.
"Big ticket items are not being purchased at this point," he said.
If dealerships continue to leave McDowell, those that remain could face a tougher time because there will no longer be a "critical mass" of dealerships to attract customers, Kidder said.
"Part of what makes the Motor Mile work is a concentration of dealerships," he said. "It is a continuation of a trend. Whether that trend persists is something we don't know."