January 16, 2009 - Lund Cadillac, Scottsdale AZ

Lund Cadillac has put construction of two dramatic new Cadillac Hummer Saab dealerships on hold.

Lund Cadillac puts two Loop 101 dealership showpieces on hold

Lund Cadillac has put construction of two dramatic new Cadillac Hummer Saab dealerships on hold.

The matching showroom-and-service facilities, one at Loop 101 and Scottsdale Road in Scottsdale and one at Loop 101 and Bell Road in Glendale, were to open in mid-2008.

But now the longtime General Motors Corp. dealership has no timetable to start construction, marketing director Chuck Dimmick said.

"We're not giving up on the plans. We're just waiting to see what happens with the rest of the economy and with GM," he said.

Lund broke ground in April 2007 on the two dealerships. The sleek, steel-colored buildings were to feature vertical red lights inspired by Cadillac's distinctive taillights and entrances resembling the grille of a luxury vehicle.

A top Cadillac executive said at the time of the ground-breaking that they would be "by far the nicest facility in the world."

But the 16-acre parcel on the southeastern corner of Scottsdale Road and the 101 remains scraped bare and surrounded by construction fencing. The Glendale site also is a vacant field.

Lund still has General Motors' approval to build the dealerships for all three brands, GM spokeswoman Susan Garontakos said. GM will still honor the agreement, she said, even though GM has put its Hummer and Saab brands up for sale, so far unsuccessfully.

"We're OK with him building the dealerships, so it's kind of in his lap now," Garontakos said.

Dimmick said Lund still wants to build, but that it is "more prudent to wait" until the economy improves and the future of Hummer and Saab are resolved. The dealership would be affected if, for example, a foreign buyer pulls the brands out of the U.S. market, he said.

No buyers have emerged for Hummer, the hip, military-style vehicles whose sales plunged when gas prices soared last year, nor for Saab, the Swedish automaker that sold a meager 21,000 vehicles in the United States last year.

Lund had been working on the Scottsdale dealership for years. His company struck a deal with Scottsdale in 2002, winning the promise of up to $7.5 million in tax incentives in exchange for placing the dealership on the Scottsdale side of Scottsdale Road and keeping its south Scottsdale Kachina Cadillac dealership open for two years.

Scottsdale estimated at the time that the dealership would generate $107 million to $137 million in sales-tax revenue over 30 years.

The dealership originally was to open in 2004.

But it took five years after the deal with the city for the dealership to break ground. Lund attributed the delay at the time to the extensive development process and input from General Motors.

Once the new dealership opened, Lund planned to close its Legends Cadillac location on Frank Lloyd Wright Boulevard and sell the property. That dealership remains open, Dimmick said, selling the Cadillac, Hummer and Saab brands.

"Right now we're very optimistic," Dimmick said, citing the federal government's funding of GM and its GMAC LLC financing unit. "There are a lot of great deals out there to be had. All the auto companies are being aggressive, and it's a good time to buy."

The Glendale project also took years of planning.

Glendale promised Lund $10.5 million in tax breaks for its new dealership and agreed to pay $6 million to move a sewage lift station from the site. The West Valley city estimated the dealership would bring it at least $36.9 million in sales-tax revenue over 14 years.

Original Story - Arizona Republic