Urban auto dealerships are an endangered species in a city where land is at a premium and densification is the order of the day.
Just as hoteliers found mixed-use developments involving a condominium and/or commercial component is the only economically feasible route to developing a new luxury hotel, auto dealerships are facing many similar challenges.
Some manufacturers, such as the former Vancouver Chrysler dealership on Main Street, have abandoned downtown dealerships altogether, and others, such as Burrard Acura, are being redeveloped into condominiums with street level retail. But dealerships like Kingsway Honda and, in short order, Downtown Toyota, have taken a page from local developers and incorporated auto dealerships into mixed-use developments.
While Coastal Ford, Dueck Downtown and the recently relocated Mini Yaletown have clustered along Terminal Avenue in the False Creek Flats, those dealerships wanting to maintain a presence in the downtown core are looking at becoming just another storefront in an increasingly dense urban core.
“The challenge that dealers face in urban centres is simply this: the value of their real estate in today’s market-based on highest and best use is not automotive,” according to Bill Harbottle, president of the Jim Pattison Auto Group. “If the dealerships had to invest in properties in urban cores today, based on the value per buildable square foot, they could never be profitable.”
The alternative, according to Harbottle, is to look at incorporating a dealership into a larger mixed-use facility where you can achieve much higher density on the site.
“I know with our downtown project [Downtown Toyota], we are doing a fairly significant project there in a co-venture with our neighbours, and it has to involve a number of mixed uses.”
Auto dealerships in major world cities such as London and New York, as well as cities in Japan and Korea, have integrated into mixed-use developments. “You have to vertically integrate, so you have indoor displays, indoor service bays and indoor customer parking.”
According to Harbottle, few dealers are prepared – or able – to proceed with the major development of a mixed-used project. “Most of them are only in the car business and they want to own their real estate. They are not prepared to get into or are knowledgeable about development.”
Harbottle said the Pattison auto group has been working with the City of Vancouver to develop a concept and model for the redevelopment of its Downtown Toyota dealership and would be submitting a formal rezoning package in the next few months.
While he declined to provide details, he did confirm it is “a very large development involving office, residential, retail, day care and automotive.”
No one from Destination Auto Group was available to speak about the mixed-used redevelopment of its Kingsway Honda dealership. However, Russell Acton, a principal with project architect Acton Ostry Architects, said the project was one that its developers speculated could be a North American first and it involved some unique design considerations.
Beside the fire and acoustical separation of the residential component from the showroom and service bays, the unique shape of the property presented some design challenges.
“When we presented this project to the urban design panel, the massing is almost counterintuitive,” he said. “Many would look at it and expect to see the tower element at the corner. Our response was why do we want to put people right where all the street traffic is? That’s a horrendously busy corner. At the same, that’s where we wanted the dealership.”
By moving the tower to the north, “it lessened the structural implications of having excessively massive columns that have to support a tower come up through the showroom. Even though there are still columns in there, it is not as many or as big as if we had a tower. It is very important to use have great visibility for the showroom.”
Acton did confirm his firm has been approached about designing another mixed-use development involving an auto dealership, but he declined to elaborate.
Dealerships that do not relocate to auto malls or areas where city planners permit more traditional suburban-style dealership formats will likely share the same fate as Burrard Acura in Kitsilano.
According to the June 30, 2010, development permit staff committee recommendation report from the City of Vancouver, the dealership, which is owned by the Dilwari Group of Companies, has been approved to be redeveloped into a 10-storey mixed-use building. While there is some street-level retail and three levels of underground parking planned for the primarily residential project, there is no mention of the dealership. A company spokesperson said the Dilwari Group had no comment on the project.