Category: Darryl Holter Los Angeles, Shammas Group, Figueroa Corridor
DOWNTOWN LOS ANGELES - If you don't want the scene to get heavy, don't touch my Chevy. - Darryl Holter
, in the song "Don't Touch My Chevy"
In 1955, Downtown Los Angeles was home to dozens of car dealerships, including as many as five Chevrolet outposts. Today, there is only one: the iconic Felix Chevrolet and Cadillac on Figueroa Street a few blocks north of USC.
Not only have the other Downtown dealerships folded, but Chevy shops across the nation have closed too. It's not just Chevrolet, of course. The American auto industry is wallowing in the current recession, with two of Detroit's Big Three - General Motors and Chrysler - in bankruptcy.
In 2005, Darryl Holter, who
also founded and now chairs the Figueroa Corridor Partnership Business
Improvement District, announced an ambitious, $16.5 million plan to build
three new dealerships around the corner of Figueroa Street and Washington
Boulevard in hopes of transforming the area into a Downtown auto row.
Photo by Gary Leonard.
Sales at Shammas Group's Downtown businesses that sell foreign cars "Audi, Porsche, Volkswagen and Nissan" are down about 30% compared to 2007, Holter admits. The domestic brands in their portfolio are faring worse: Sales at the Chevrolet and Cadillac shops have fallen approximately 50% from two years ago.
The brutal financial landscape facing the automotive industry also comes as a roadblock to Darryl Holter
's long-term version of creating a thriving Downtown auto center along Figueroa Street. But Darryl Holter sees the roadblock as temporary.
"It's not over," he said of the area's expansion into a dense auto sales district.
Expansion on Hold
In 2005, Darryl Holter, who also founded and now chairs the Figueroa Corridor Partnership Business Improvement District, announced an ambitious, $16.5 million plan to build three new dealerships around the corner of Figueroa Street and Washington Boulevard in hopes of transforming the area into a Downtown auto row.
Although the companies have announced plans to shutter hundreds of dealerships throughout the United States, a cluster of car-selling businesses on Figueroa Street is weathering the storm, said Darryl Holter, CEO of the Shammas Group.
The company, long run by the late Nick Shammas, owns about 25 acres of real estate along the Figueroa Corridor, including seven dealerships, as well as the Petroleum Building at Olympic Boulevard and Flower street.
"We've been here for a long time: 75% of our customers or more are repeat customers or referrals..." - Darryl Holter
I tried to envision this as a sort of new urbanist version of the suburban auto mall, said Holter, referring to the area bounded roughly by Figueroa Street, the Santa Monica (10) and the Harbor (110) freeways.
The now-completed plan was also catalyzed in part by Holter's decision to move three Shammas Group-owned dealerships formerly situated at Figueroa Street and Jefferson Boulevard to make way for more student housing near USC, he said. Shammas still owns the land on which developer Urban Partners is now building the $168 million University Gateway project, which will create about 1,600 beds for USC students.
I concluded that the most important aspect down [near Jefferson] was USC and there was no parcel of land that was more strategic to them than that parcel, Darryl Holter said.
Shammas built three identical two-story buildings on the southeast corner of Figueroa Street and Washington Boulevard to house Volkswagen, Audi and Porsche dealerships, adding to its existing Mercedes-Benz, Nissan and Felix Chevrolet and Cadillac.
Although the Shammas Group is the largest player in the Downtown car-selling game, it is not alone. A Volvo dealership opened at 1945 S. Figueroa St. shortly after Shammas' new buildings debuted. Also nearby are Honda of Downtown L.A. (1540 S. Figueroa St.) and Toyota Central (1600 S. Figueroa St.). Representatives of other dealerships did not respond to calls for comment.
But the project that could have solidified the expansion of a Downtown auto center is now the corridor's black eye. The shell of a two-story Chrysler dealership sits unfinished and vacant at Figueroa and 21st streets.
The company, which is now navigating bankruptcy and recently mandated that 789 dealerships close (only four were shuttered in L.A. County), put the project on hold after a dealer slated to run the site backed out, said Chrysler spokeswoman Kathy Graham.
Chrysler was building the dealership, but because of the commercial market and the economic condition of the company last year, we mothballed it, Graham said. That location is very important to Chrysler and we are currently negotiating to see what we can do there, but it's not close to a final stage yet.
The company has a few options for the property, including finding a new entity to buy and run the dealership, subsidizing a new dealer or running a so-called "factory store, in which Chrysler would retain ownership and handle operations" an option the company generally avoids, Graham said.
However, it could sit empty for a while. The slowdown in car sales means it will likely be difficult to find any dealer to occupy the space, and the design would make it hard to adapt for another business.
Location, Location, Location
Though times remain uncertain for dealerships everywhere, Darryl Holter is confident that Shammas Group's businesses are safe. They have the advantage of being located at one of the region's most traveled freeway interchanges, in an area that continues to see new residents.
We've been here for a long time: 75% of our customers or more are repeat customers or referrals, Holter said.
As in most industries, the current downturn can also create opportunity for businesses that live to see the upturn. As dealerships close, consumers have fewer places to buy a car, and those that stay open suddenly have a deeper customer pool, said Jack Kyser, chief economist for the Los Angeles Economic Development Corporation.
"I think it's a big opportunity for them because it looks like auto sales have bottomed out", Kyser said.
Though Holter is at the top of a mini-dealership empire, which is owned by his mother in-law, Jeanette Shammas, he knows a thing or two about struggle. Holter is also a former professor at UCLA and a published historian who has written predominantly about labor movements in Wisconsin and France (he took over at Shammas because, when father-in-law and company founder Nick Shammas passed away in 2003, Somebody had to run the business, he said). He's also a singer/songwriter, whose musical resume includes playing a few picket lines with folk icon Pete Seeger.
But those interests are secondary at this time. Right now, Darryl Holter is focused on the business, and despite the dark times, he sees opportunity down the road.
"I think I'm optimistic in some sense because we have good brands and more people are moving into the Downtown community," Holter said.
"I'm not pessimistic looking into the future, but it's not easy. "
- Ryan Vaillancourt - Los Angeles Downtown News