RDA extension keeps store rolling
The Redevelopment Agency made a sensible move in extending
Hollister Honda’s loan repayment schedule because the business
still has tremendous potential while the city would have little to
gain by forcing its hand.
RDA extension keeps store rolling
The Redevelopment Agency made a sensible move in extending Hollister Honda’s loan repayment schedule because the business still has tremendous potential while the city would have little to gain by forcing its hand.
The Hollister RDA this month extended the deferment period – during which the business does not have to pay interest or principle payments – on the Honda store’s loan.
City leaders in 2006 first agreed to a $1.5 million loan to help kick-start the business and in 2007 lent an additional $400,000.
Hollister Honda had performed well at the outset but slumped with the economic downturn. Deferring the loan means it has another two years before possibly having to make those payments. It also means Hollister council members and RDA officials understand there is a lot more to gain than lose by extending the term.
Most important, the store still has tremendous promise. Being a Powerhouse store carrying almost every Honda product aside from cars, it gives another reason for out-of-towners to visit Hollister, some presumably who also will have an interest in Hollister Hills Recreational Area.
At its outset, Hollister Honda proved its potential – especially in times when discretionary dollars aren’t so tight – by hitting high sales marks and being ranked first in the district and 19th in a five-state zone. The store is ranked 190 out of 1,200 dealerships in the country, and the extension, as co-owner Marty Greenwood put it, gives them a “chance to grow the business.” Hollister needs such businesses with a tourist draw, and it needs them to be successful to pursue the kind of economic development for which local leaders are striving.
City council members had a relatively easy call, meanwhile, because they had little choice. Taking recourse against Hollister Honda instead of working with the business only would have damaged the store’s chances to get rolling again and pay back the loan.
If council members had for some reason decided to force the hand of Hollister Honda, it could have ended up negating the investment, wiping out a tax revenue source and leaving another storefront empty, in a city and downtown with far too many of those already.
