During its Tuesday, Sept. 14 meeting, the Signal Hill City Council approved a deposit and reimbursement agreement (DRA) between the City and SJS Long Beach, LLC, property owner of a former Nissan car dealership at 1800 E. Spring St.
The agreement allows SJS to lease the property to electric car maker Tesla Motors, which plans to open for business within the next three to six months.
Under the DRA, SJS—formerly known as HNL Properties—must submit a $600,000 deposit ensuring it will make certain property improvements that it has neglected for a decade, including new paving, lighting, fencing, landscaping and installation of a stormwater device.
According to Economic Development Manager Elise McCaleb, if SJS does not submit the deposit, the City has the legal right to block it from leasing the dealership to Tesla.
SJS must also submit its improvement plans within 30 days, per the agreement. SJS can ask the City to reimburse its construction expenses, which the City will pay out of the $600,000 deposit. If SJS does not complete the work within a year, it forfeits the deposit.
Tesla had expressed interest in moving into the site earlier this year, McCaleb said. The City has already approved its redesign plans—including new interior finishes and lighting, new furniture, new signage and new electric vehicle (EV) charging stations in the parking lot.
The property owner’s decade-long failure to complete agreed-upon improvements at the Nissan site led to a legal battle with the City. A lawsuit filed by the property owner against the City was dismissed by a superior court judge in March.
When it was known as HNL in 2011, the property owner agreed to make the improvements as part of a land-purchase agreement. The City loaned HNL $700,000 for that work, though it was never completed.
HNL then sold the Nissan dealership to Rountree Automotive Group in 2017 while retaining ownership of the land. Rountree did not perform the improvements either, even after submitting plans to the City to do so. Rountree then went out of business in 2019, closing the dealership.
McCaleb said SJS has now agreed to the DRA—including the $600,000 deposit and construction deadline—and submitted preliminary plans for the required site improvements.
She added that the City granted Tesla a building permit at the end of July for its tenant improvements, which it expects to complete in about 12 weeks.
Mayor Edward Wilson said he drives a Tesla, as do some of his coworkers and neighbors. While Tesla has mobile auto servicing, he said he welcomed a local servicing option.
“To have one in the city is going to be a great opportunity for us all,” Wilson said. “I’m excited about this project.”
