Sound the death knell for Motor Row.
Foley-Rice Cadillac will close its Madison Street sales and service operations as soon as the sale of its franchise is approved by General Motors, the dealership’s owner said.
Terry Rice, who has co-owned the dealership for two decades, said when GM ended production of its Oldsmobile line in 2004, the loss of that franchise cut his sales in half and decreased his service business by 35 percent.
Rising property taxes dealt the final blow.
“It’s become very expensive to operate here,” Rice said.
County records show that Foley-Rice’s taxes shot up 18 percent last year, rising by more than $30,000.
Rice fears he’d see an additional jump after the renovation of his showroom hit the tax rolls after the next reassessment.
Village President David Pope said the dealership was also the victim of larger forces affecting the automotive industry, especially American automakers.
“Foley-Rice has been a very important asset to our community, and Terry has been incredibly civic-minded in his support of many worthwhile causes right here in our community,” Pope said.
“The challenge that macroeconomic trends, consolidation in the auto industry and among dealers, and the decreasing level of support that the Big Three have provided to mid-sized and smaller dealers is very disappointing to us as a community because those factors have combined to force a very high-quality and community-minded dealer like Terry to have to close his doors.
“It’s a very troubling commentary on the state of the industry at this point,” Pope said.
Cadillac itself is making something of a comeback, though, according to Forbes magazine. “Many upscale customers feel they must turn to foreign automakers for decent luxury cars. But Cadillac has returned from a slump in the 1980s and ’90s to build some of the world’s best upscale cars, including its new DTS sedan,” Forbes reported in 2005.
Cadillac models held three spots on the Forbes 2006 best-selling list, including No. 5 Escalade, No. 6 Deville/DTS, and No. 8 CTS.
The properties used by the dealership will be sold. The land, owned by Stephen X. Foley Sr. and his family, could create attractive development potential as it includes two full-block stretches.
A master plan for Madison Street, completed in 2006, calls for a $20-$25 million project for the northeast corner of Oak Park Avenue and Madison Street. Other projects are also in the works.
Rice started shopping around the dealership last fall, hoping to find a buyer who would keep the business in Oak Park. But the dealership’s weak sales figures kept that from happening.
“If it wasn’t for my friends and repeat customers, I’d be long gone,” Rice said, adding that Madison Street-once known as Motor Row-hasn’t been an ideal spot for a dealership for a long time.
Rice would not disclose the name of the buyer until the deal gets GM’s OK.
Rice did not know how much sales tax the dealership generates for the village, but in 2004 he put the figure at $200,000.
The dealership was nearing completion of an overhaul of its facilities, made possible in part by a 2005 business retention agreement with the village. Rice said last week that he will return all the money the village gave him from its tax increment financing (TIF) fund as part of the deal.
“I’m not keeping the taxpayers’ money,” he said. “That’s not what I’m about.”