Reality Check on Car Dealer Site Redevelopment Anyone?

On Monday, June 15th, an article appeared on thestar.com titled, "Un-pave car dealer's lots to put up paradise" On the surface of it, this sounds like a glorious idea. Who isn't sick of all the pavement? Who wouldn't love to see more green space in our cities? Why shouldn't these sites, many of which are likely contaminated, be turned into something friendlier and nicer and greener than a vast flat parking lot with old ugly service shops on them?

While no one has any clear idea – most dealers aren't talking – some, including local architects and urban planners, are drooling over the possibilities of turning parking lots back into paradise.

"For planners, car dealerships are always opportunity sites," says Jennifer Keesmaat, of the Office for Urbanism, an urban planning and design firm, working on large-scale planning projects across Canada.

Community markets. Community gardens. A place for local festivals and celebrations.

Well, let's take a look at the reality of these sites. I can think of a few hundred people who might be very upset about turning property that has been generating very large rates of income over the last few decades into sites with little or no economic value; the property owners themselves! Put yourself in their shoes - these aren't big bad corporations - they're hard working business owners who have employed thousands of Canadians for decades! Unless they really have a desire to give these sites away, or municipalities would like to buy these sites for market value (your money at work by the way), then these sites will have to be redeveloped under other car brands, as used car lots, or some other economic model that returns money on that money already invested in them.

I just heard of one GM dealer near Ottawa that put $11M into the showroom and service facility just last year and is now being shut down. (Can't seem to find the reference anywhere - so if anyone finds it, please post it in the comments.) That's a pretty hard reality pill to have to swallow. Now to be asked to redevelop the property into a craft markets or artisan shops is like a slap upside the head when the dealer just doesn't need it or can likely afford it.

For those property owners who'd get a warm fuzzy out of these ideas or, better yet, come up with a business model that makes sense under one of these schemes I say go for it! If such a clean, friendly use doesn't cut it in terms of their expected investment returns though, we'll all have to get used to the idea that these sites will likely continue to be commercial in nature.

In fact, if the Province of Ontario has their say under new intensification legislation, these sites will be required to be redeveloped into even more dense uses than they are currently being used for.