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Old 09-13-2010, 05:51 PM   #1
XDCX
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Default $1 Million loan secures new Volkswagen Dealership for Davis

News reports indicate the city of Davis has approved a $1 Million loan so a nearby Volkswagen dealer can open a new dealership. The new Volkswagen dealership will fill a vacated Ford dealership that closed last year. For the full report - click here

Even better, the entire $1 Million loan is forgivable if the dealer meets certain sales targets.

While I know deals like these are somewhat common, I was amazed a Volkswagen deal could command a $1 Million loan. The dealer currently has a Volkswagen franchise in a neighboring community and only sells 14 to 15 Volkswagens per month. It's likely he'll do little more than move the franchise from the old location to the new location to be eligible for the $1 Million loan.

From my vantage point, getting a $1 Million forgivable loan for moving an existing store sounds like a great deal.
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Old 09-14-2010, 04:14 AM   #2
Ralph
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Let me get this straight, a City has decided to loan a mil to a private businessman...and has said up front it is forgivable? Is Davis printing money...or is that from property and income taxes? Wow, Government Motors on a small scale.
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Old 09-14-2010, 09:51 AM   #3
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Originally Posted by Ralph View Post
Let me get this straight, a City has decided to loan a mil to a private businessman...and has said up front it is forgivable? Is Davis printing money...or is that from property and income taxes? Wow, Government Motors on a small scale.
The best part, as I understand it, is the dealer is currently running a dualed Subaru/Volkswagen point in a neighboring city and will simply split off the Volkswagen franchise to pick-up the $1 Million loan. Imagine if he was getting pressure from one of the OEMs to break the dual - what a fantastic solution.

The only reason I keep posting threads like this is remind our members that some local governments are starving for sales tax revenues and have development funds to attract new businesses.
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