Cars and trucks are gone from the lot, so now what?

On one corner, tattered American flags droop from street lamps over a nearly empty snow-filled lot.

In sharp contrast, across the street: a shiny complex housing an eye clinic, lung specialist, perinatal care and more.

The intersection of Coon Rapids and Round Lake boulevards could be a case study of the risks and opportunities arising in Minnesota and around the country as car dealerships go black.

The first site once was home to McKay Lincoln Mercury; it now houses McKay Automotive while new owners wait to redevelop it. The second, where Carlson Toyota stood before it moved to another Coon Rapids site, was redeveloped in 2006 to complement nearby Mercy Hospital.

Last year, Minnesota lost 33 dealerships as the recession hammered the auto industry; 21 others targeted to close are appealing their franchise rights. Nationwide, 1,307 new-car dealerships closed in 2009, and another 1,600 are in arbitration.

Former dealership sites across the country are looking for a new life, and some are finding it: Wayne State University is setting up a campus where a Detroit Cadillac dealership once did business.

A gardening outlet has taken root in a former Pontiac dealership in Charleston, Ill. A small theater company has moved its stage into a former dealership in Shelton, Conn. Closer to home, three LA Fitness operations have been built on former dealership sites in Apple Valley, St. Louis Park and most recently in Hopkins.

"My thesis is retail developers will find these dealerships to be very attractive. That's the good news. The bad news is there's very little financing out there to build new shopping centers today."

Land of opportunity?

The lots that are left when the cars roll off could become conspicuous stretches of broken asphalt. Or they could present redevelopment opportunities in built-up areas where land is scarce.

Imagine, as Ed Goetz does, neighborhoods of walkable housing and retail areas, nodes of commerce and community.

"What cities are moving toward are more vibrant street fronts and more interactive business landscapes," said Goetz, director of the Center for Urban and Regional Affairs at the Humphrey Institute of Public Affairs. "The options are unlimited."

"Most local governments are constantly thinking about redevelopment strategies," said Goetz. "This is made more critical by the current economic situation. If a car dealership goes belly up, [cities have] got themselves a real issue to deal with. That is a very noticeable vacancy in the landscape. One would hope they've got plans in place for how to reuse this land."

He and others note that dealerships, with minimal land improvements, aren't big property tax generators compared with denser residential or commercial developments.

Pluses and pitfalls

Former dealerships have much to offer in terms of visibility, access and relative ease of development, but there are pitfalls, too. Some areas, those adjacent to interstates, for example, never will be suited for mixed-use, pedestrian-friendly development, Goetz said.

Then there's the economy.

"Some car dealership sites may prove to be excellent development sites in the future," Collins said, "but in the current economy, we're not likely to be purchasing in the short term for redevelopment opportunities."

For the short term, Villaseñor said, cities should promote uses that keep closed lots occupied and cared for without precluding future development: churches, schools, storage, municipal offices. "Anything that will pay your rent and help you cover your cost of ownership," he said. "Then you'll be sitting on a very prime piece of retail dirt." But plans already are in the works in a number of Twin Cities locations: A transit hub at a former Denny Hecker site in Shakopee. A Bedrock Motors store at a Hecker location in Blaine. Dick Grone's Cambridge Commercial Realty guided construction of the three LA Fitness gyms.

Now is the time to plan the right future projects because land costs are down across the board, he said.

Grossman Chevrolet-Cadillac in Burnsville was marked for closing by GM last spring. Owner Mike Grossman is among the franchisees in arbitration. Still, a group including Grossman, Cambridge and others are in talks about putting a Costco on the location should the arbitration bid fail.

The site, near Burnsville Center, is part of an "extremely robust retail area," said City Manager Craig Ebeling.