The new Morgan Hill Chrysler Dodge Jeep Ram store on Condit Road opened earlier this year under unusual circumstances for an automotive dealership—with temporary facilities on a gravel lot and an off-site service center.
A cluster of double wide trailers serving as sales offices and a customer waiting lounge surround an outdoor canopy that provides shade for more space for staff to meet with customers. The service center is currently located across town on Church Street.
The inventory of new cars on the CDJR lot has grown from 14 when the dealership opened Feb. 1, to more than 100 as of this week, according to General Manager Brandon Goldstein.
The new dealership is owned by the Marina-based Cardinale Automotive Group, which has high hopes for their new store in Morgan Hill. So does the Chrysler company, apparently—and that’s why the local lot was given the blessing to open before even starting construction on a new 33,000-square-foot building.
“We are the only CDJR store in the country that they allowed to do this setup,” Goldstein said Monday afternoon. “Cardinale Automotive has a good name with the manufacturers.”
The new dealership—located next door to the Ford Store—has all the permits they need from the city to begin construction on their new building, which is expected to begin in June. Goldstein said the construction will last about 9-10 months.
Plans for the 9.25-acre CDJR dealership property, Goldstein said, also include a 4X4 track adjacent to the east side of Highway 101 to help showcase a featured product—the luxurious new Jeep Grand Wagoneer—when it makes its debut this summer.
Cardinale Automotive owns 21 foreign and domestic car dealerships, most of which are located in California. The Morgan Hill store is their first CDJR dealership, Goldstein said.
Goldstein, a U.S. Air Force veteran, has worked for the company for about three years. He worked at Cardinale’s Audi store in Bakersfield before moving to Morgan Hill to open the new store.
He can already tell the dealership is going to like Morgan Hill. City staff have been “super easy to work with” in gaining all the permits needed before opening, and the local customer base is generous and giving.
“People here really care about supporting local businesses,” Goldstein said. “This feels like a large small town, and there’s a good sense of community here.”
The local dealership’s mission is posted clearly on the walls inside the temporary offices: “We develop outstanding relationships where everyone wins!”
Among those winners could be the City of Morgan Hill. The new CDJR dealer could generate up to $200,000 in sales tax revenue just in the first year, Morgan Hill Economic Development Manager John Lang said at an April meeting of the Chamber of Commerce Economic Development Committee. After construction is finished and the lot is fully inventoried with new cars, that figure could climb higher than $400,000 per year.
A guest at the same chamber meeting was Cardinale Vice President Chris Pullara. He said of all the company’s recent business, “The thing we’re most excited about now is Morgan Hill.”
“We see Morgan Hill as an absolute boom of an opportunity for us,” Pullara added. “In the next two to three years, we expect it to be one of our biggest stores.”
When the Cardinale company first began working with Chrysler to open a dealership in the region, they initially looked at purchasing a former CDJR store in Gilroy, Pullara said. However, Chrysler’s negotiators suggested they open in Morgan Hill because the manufacturer saw the locale as an even bigger opportunity.
Pullara said the Condit Road location with easy access to the freeway is a “perfect location” with its access to the Bay Area as well as the Monterey and Salinas areas.
The CDJR site, in fact, has drawn interest from other auto dealers in recent years. Josh Towbin, owner of a successful chain of dealerships in Nevada, once owned the property with intentions to build a Chrysler and Fiat dealership. Last year, Ford Store of Morgan Hill owner Tim Paulus presented plans to open a Chrysler dealer at the site, and even gained a tax incentive agreement from the city to do so.
Both those dealers eventually changed their plans, but now Cardinale Automotive is committed to the Morgan Hill site. The dealer has also secured a tax incentive agreement with the city similar to that offered to the Ford Store.
Under the agreement, the city will provide sales tax rebates potentially worth up to tens of thousands of dollars—or much more—if the CDJR dealer surpasses specific annual sales benchmarks, according to city staff. Morgan Hill has used such agreements with auto dealers in the past in an effort to entice these businesses to town. Car dealerships generate far more sales tax revenue for the city than other businesses.
Pullara said in April that the tax sharing agreement with the city allowed Cardinale to increase its initial investment in the Morgan Hill property. By the time the dealership is fully developed, the company will have spent at least $18 million on the project.
But the Cardinale group is optimistic about the auto industry in general, for at least the next couple years as the Covid-19 pandemic becomes more controlled and more commuters get back on the road.
“There is still a huge demand. We cannot keep a truck in stock,” Pullara said. “I think you’re going to see a nice run with automotive.”