High hopes for new dealerships rolling into Broadway Auto Row

The only thing Mike Murphy loves more than cars is his wife Margot, a bright-eyed brunette whose 8-by-10 inch silver framed photo sits in the office of Murphy’s Volkswagen showroom on the 2800 block of Oakland’s Broadway Auto Row.

“I think both of us always thought we would have one more day—we didn’t live like she was dying,” Murphy said. Even after his wife’s breast cancer spread to her bones, lungs and liver, he added, they continued planning for the future. They even purchased property in Palm Springs—several hours away from Murphy’s Oakland-based VW dealership, but close to where Margot was receiving treatment—to build a new dealership.

After his wife passed away this summer, Murphy returned to Oakland, where last week he opened a new Nissan dealership on Auto Row and where he’ll also be opening a new Infiniti dealership later this month.

City of Oakland officials have high hopes that the new dealerships will help reinvigorate Auto Row, a long stretch of Broadway between Grand Avenue and 40^th Street that since, 1912, has been a hub of city commerce teeming with auto businesses. Prior to the economic meltdown of 2008, the street generated millions of dollars in sales tax revenue for the city, but now it boasts more vacant buildings and “for lease” signs than live dealerships.

“Within the last five years, we have seen a steady decline in revenue from auto sales,” said Gregory Hunter, the director of economic development and redevelopment for the City of Oakland. “We also saw a number of auto dealerships close, but what we’re seeing now with the return of Nissan and Infinity is a rebounding of that industry.”

Murphy’s vision for his ventures, though, is about more than just turning a profit, or even rebuilding Auto Row. Of the $70 to $80 million in revenue he expects the new businesses to earn next year, he hopes to invest up to 30 percent in a nonprofit he’s starting in his wife’s memory. The foundation, which he named Love From Margot, and should be fully incorporated as a nonprofit by year’s end, he said, and provides financial support and medical advocacy to individual breast cancer patients.

Though the success of the foundation is somewhat reliant on the success of the new dealerships, Murphy said he’s not worried about the businesses going the way of dozens of other auto showrooms on Broadway, which closed their doors and emptied their lots after the economy took a downward turn a few years ago. “People still need cars and, most importantly, people need to service cars,” said Murphy, adding that maintenance is a significant source of income for his VW dealership. “Especially being downtown, these tall buildings are full of people who need to get serviced.”

Despite the recession’s negative impact on Auto Row, Murphy said his own business is doing quite well. His VW showroom and its bordering car lot are one of just six dealerships left on auto row, along with Honda, Mazda, Audi, Mercedes Benz and the recently opened Chevrolet lot. The new Nissan and Infiniti showrooms will bring that number to eight. By contrast, Murphy says that when he first came to Oakland in 1996, Auto Row boasted nearly 27 franchises.

Because of the street’s dismal state, Murphy was able to purchase and lease several nearby buildings at depressed prices. In one of these buildings, a block north of his VW dealership he opened a Nissan showroom, which should be fully staffed by the end of this week. Soon after, the lot across the street will be stocked with new and used Nissans.

Besides the dealerships, he plans to open a restaurant in a narrow strip of building at the fork of Broadway and Webster. And across the street from there, in a mostly vacant warehouse that now houses a small restaurant called Z Cafe, Murphy’s new Infiniti dealership will open October 17.

City officials said they are delighted with Murphy’s ventures. Oakland’s Community & Economic Development Agency issued a statement earlier this month, which said that the new ventures “represent a significant investment and belief in Oakland” and demonstrate “his commitment to and belief in Broadway Auto Row.”

The agency, which anticipates collecting $200,000 in sales and business tax revenue from the new dealerships in 2012, awarded Murphy a $30,000 matching redevelopment grant. The recently opened Mazda and Audi dealerships took advantage of the grant program, as well, using the funds to improve their properties and uplift their facades.

City staff is also working with Murphy to make sure the new dealerships receive hiring tax credits and other benefits available through Oakland’s Enterprise Zone program, which aims to attract and keep new businesses to the city.

The Enterprise Zone program is a definite perk, Murphy said, though he added there aren’t really any drawbacks to doing business in Oakland, either. While he admits that it can be difficult to attract suburban consumers to Oakland, his VW dealership draws customers from cities up and down the I-880 corridor.

“To me, Oakland’s been great,” he said. “I’ve never had any major issues here. I find the city very easy to work with, the police department to be very responsive. Actually, my biggest problem is graffiti.”

Murphy said he plans to hire around 80 new employees to staff the dealerships by early next year, though the ventures will remain a family business, run by himself and his two sons. Murphy’s VW dealership, meanwhile, will remain at the center of his expanding enterprise—in part, because it marks his first investment in Broadway Auto Row.

It’s also where he first met his wife, Margot, ten years ago.