Minnetonka car dealers debate indoor sales lots

After refusing to allow new car dealerships on Interstate 394 for 20 years, Minnetonka may open a spot for BMW because it promises to store half of its inventory -- 360 cars -- in an enclosed parking ramp.

Disliking the sea of autos and the bright lights of a row of car dealers, Minnetonka zoned against outdoor display, sales and storage in the 1980s, hoping that five existing auto dealerships eventually would fade away, said Julie Wischnack, community development director for Minnetonka.

But those dealerships remain, and it's now clear that with 100,000 drivers a day going past the showrooms on I-394, they are there to stay, Wischnack said.

The proposal from BMW -- which promises indoor parking, softer lighting, no loudspeaker paging and customer test drives only on non-residential streets -- has led the city to consider a new ordinance that would let BMW in and make similar parking, lighting and test routes a requirement for existing dealers if they ever want to expand.

What is visually most bothersome about car dealerships is the sea of cars, Wischnack said. "It's the large amount of asphalt compared with any other use."

Existing dealers told the city at an initial meeting last week that indoor parking is too expensive.

"To put up a ramp, I would have to more than double the investment I have in my current land and building," said Steve Bloomer, owner of Village Chevrolet on I-394 in Minnetonka and the Lexus dealership next door in Wayzata.

The Minnetonka Planning Commission will hold a public hearing on the proposed changes at 6:30 p.m. Thursday at Minnetonka City Hall. Because it's so close to the July 4th holiday, the commission could decide to continue the hearing to another meeting as well, Wischnack said.

The proposal to build the new I-394 dealership comes from Peter Hasselquist, former general manager of Motorwerks BMW in Bloomington, who formed a limited liability company with the Carl Pohlad family to purchase a BMW franchise from Sears Imported Autos Inc. on I-394 in Minnetonka.

BMW now shares a building with the Sears Mercedes dealership. If BMW relocates to the proposed site along 394 west near where it turns into Hwy. 12, Mercedes may expand at its current location. And for that reason, Sears is paying close attention to the ordinance discussion, said Sears owner Don Davidson.

Hasselquist, who has said he plans to serve as general manager of the new dealership, could not be reached for comment. Wischnack said the BMW group would like to start construction this year and has asked for a decision from the city by August.

Bloomer has owned and operated the Chevrolet dealership on I-394 for 50 years, and says he makes every effort to be a good neighbor. He said the buffering berm he put up behind his building is now topped by trees that are 60 to 70 feet tall. It serves as a barrier between a residential area and the dealership.

Minnetonka resident Steve Stewart, who lives near the car dealerships, said he sides with dealers in opposing a ramp requirement.

After years of working to get concessions from the dealerships to make them better neighbors, nearby residents could find that adding parking ramps would merely open new negotiations about how those would look and how tall they would be, Stewart said.

"Existing buildings are ground level and outdoor parking is ground level, and we have already worked with the trees and berms and so on for the view," Stewart said. He said it seems "backward" to now require a bigger building on the dealers' properties for car storage.

Wischnack said minimizing outdoor car storage would make the 394 corridor better looking. The specifics of how parking ramps would work for nearby neighbors is something the planning commission will discuss, she said.

Because the proposed ordinance would apply to existing dealerships only if they expand, Bloomer said he would keep his exactly as it is, and "that probably is a negative occurrence for the city of Minnetonka."

While it is unclear how much tax revenue could be generated by a new Minnetonka BMW dealership, the Bloomington BMW complex has a taxable market value of $18.5 million, which will generate $573,429 in property taxes this year, according to Hennepin County tax records.