Stimulus Incentives Boosts Cathedral City Dealerships' Sales in May

Cathedral City auto dealers are seeing the early benefits of the city's economic stimulus plan.

“We've been able to bring ourselves closer to stability,” said Andy Jessup Jr., president of the New Car Dealers of Cathedral City.

Jessup participated in a panel discussion Wednesday during the Cathedral City Chamber of Commerce Power Breakfast, with City Redevelopment Agency Director Jan Davison, chamber Chief Executive Officer Steven C. Morris and Arrowhead Advertising managing partner Jim Zabel.

The city's auto dealerships have seen sales plummet during the economic downturn, like many dealerships across the country.

Sales were down by as much as 49 percent in March, said Jessup, who is general manager at Jessup Auto Plaza. But by May, sales were down 33 percent, he said.

That's slightly better news for the city, which relies on the auto industry for its sales taxes.

Auto dealers generated more than $50 million in sales tax and vehicle license fees to the city's general fund during the past 10 years, Davison said.

The dealerships and city staff developed an economic development plan as a way to help sustain that tax base and stimulate the economy.

The city redevelopment agency allocated $700,000 to the dealerships to help with their advertising and marketing.

The agency also set aside $50,000 for its Cathedral City “bucks” program.

Anyone who buys a car from a participating dealership receives $100 in Cathedral City bucks. The new car owner can use the money to buy items at other businesses in the program.

Those businesses redeem their customers' bucks for cash from the redevelopment agency. The bucks can be redeemed through Sept. 30, Morris said.

About 30 businesses participate in the program, he said. A list of the participants will be on the chamber's Web site, www.cathedralcitycc.com, later this week.

In addition to those efforts, auto dealers are using their money in bimonthly $5,000 drawings to boost sales, Davison said. Anyone who test drives a car at a dealership in the association is automatically entered in a drawing.