ET 11/99: Sign of new times

Sign of new times

Innovation is needed, not sleazy deals for bigger signs.

by Carolyn Chase

group of Mission Valley auto dealers is proposing the city approve a 50-foot high, 33-foot wide, off-premise, freeway-oriented sign north of I-8 and East of I-805 at Mission Rd.

This behemoth (at 1650 square feet, it would be bigger than most people's homes) would be designed in the San Diego "mission style" -- which some have observed could also be seen as the "Taco Bell" style. But dealers are promoting it as being "a model of good taste and communication" and "not physically distinguishable" as a billboard. This must be because a lot of people are against billboards. And, it's against state law to put a sign in this location, according to California's Department of Transportation who cites provisions of the Outdoor Advertising Act.

This is a drawing of the sign that the Mission Valley auto dealerships want the City of San Diego to put up for them -- for free. They assert that it would be "not physically distinguishable" as a billboard, despite being higher than a 4-story building. Although the phrase "Taco Bell" comes to mind, so does "boondoggle."

But never mind that.

According to the City Manager's report, the Mission Valley auto dealers say the sign is needed anyway because they believe that "they and the City of San Diego are losing market share in automotive sales to other car dealerships within surrounding cities."

In his letter to the Land Use and Housing Committee, John Hine Jr., President of John Hine Pontiac Mazda Dodge, stated, "I am convinced that proper signage would immediately increase our sales tax revenues." In an interesting rationale for a business owner, Hine further asks, "Why should dealers in Mission Valley be denied this opportunity to contribute to the San Diego's tax base?"

Taking Mr. Hines stated desire to contribute to that tax base at face value, I decided to find out who owned the property and what the dealers were offering to pay in rent for placing this sign. How much is this sign really worth to them on a month-to-month basis in terms of costs? It turns out that the owner is the City of San Diego. The dealers proposal? The City should not only allow the sign for free, but also pay the estimated $100,000 cost of the sign and then "pay themselves back" from the alleged increased sales tax the City would get. So much for taking things at face value. And if sales taxes don't increase, then what? The public should get stuck with the bill? Do they think the City is stupid, or merely corruptible?

E-liminating the middle man

I would counter with the question, what exactly makes them think that their potential customers aren't asking themselves the more normal business question, "Why should I contribute to San Diego's tax base by buying a car off a lot, when I can comparison shop from the comfort of my own home?" We may be test driving at dealers, but more and more people are pricing and buying on-line. Increased signage is only one factor in any retail business. If the marketplace is any guide, what consumers are really turning to are smaller, more useful virtual signs.

The technological trend toward miniaturization is finally showing up somewhere in land use. We will all need less space in which to shop. If, as the City and developers would have us believe, that industrial and commercial land is "scarce," then expect to see car lots as one of the largest sources of "new" land for redevelopment.

In the space of only three years -- less time than it takes to plan and build one suburban mega-mall -- almost 13 million additional consumer households will have become electronic shoppers, with another 21 million projected to join them by the end of 2002.

While businesses seek traditional responses like bigger signs, these responses are tantamount to screaming louder in an ever-increasing wind. Bigger signs aren't gonna do it for car dealers. Their fundamental business is changing out from under them. Some will adapt, some won't.

Two leading research firms, Jupiter Communications and Forrester Research, predict huge increases in e-commerce spending. Jupiter forecasts on-line spending growth to reach $41.1 billion by 2002 in the business-to-consumer market, very crucial to traditional retailers. Forrester's 2002 forecast for business-to-business e-commerce is in excess of $350 billion.

According to studies by Pepperdine's business school, "One class of commerce feeling the effects of this new paradigm is the traditional car dealership. California Internet companies Autoweb.com and Auto-by-tel.com, just two of a handful of leading comparison shopping sites for car buyers, have given consumers the upper hand in negotiating the purchase or lease of a new vehicle. Dealers, already feeling the effects of the newly empowered and informed consumer, are scrambling to adjust. Forrester predicts that the Internet will influence 8 million US auto-purchasing decisions in 2003. "Indicators and analysts both suggest that this is only the beginning phase of a rapidly growing new center of commerce. The benefits of electronic shopping are significant to consumers and continue to expand. Wider selection, 24-hour access, deeper discounts, and extensive product information are all available in the comfort of one's own home." Why take the chance of fighting traffic? Why be traffic?? More and more people are figuring this out.

Driving the point home

The L.A. Times has reported: "Developers of the hundreds of new movie theaters, coffeehouses, performing arts centers, chain bookstores and retail strips say they are catering to a psychological barrier that makes people reluctant to drive more than 20 minutes for anything," and "the circle of drive time is getting tighter. You can't get as far in 15 minutes as you used to," and "builders, businesses and cultural institutions are worrying more and more about convenience, particularly as consumers complain about their lack of free time." They should be worrying. The pursuit of happiness is not unalterably wedded to the pursuit of driving and shopping.

Before people had cars, they had delivery services. The senior boom is also driving this return to high-service deliveries. Most everything used to be delivered before point-of-sale retail shopping started to be promoted as merely a thing to do. Amusement attractions aside, shopping is not really a social activity and more and more people will come to understand that as they have the ability to save time and afford deliveries.

As columnist Norman Ornstein puts it, "Internet shopping has accelerated astonishingly, and it's not hard to understand why. You don't have to look for a parking space, look all over a store, deal with surly or ignorant clerks, or wait in long checkout lines. And one other big plus: you don't have to pay any sales taxes." At least, not yet.

This unfortunate Mission Valley proposal is only one small outward sign of economic changes that will rock our traditional tax and land use processes. Upcoming proposals for taxing e-commerce will provide the ultimate political showdown over sales taxes.

According to published reports, the dealers requested a delay from a decision by the City Council recently, "to make this work for everybody." The item is currently scheduled to return for a decision on November 30th. While they are to be commended for their evident desire to improve their proposal, bigger signs at taxpayers expense not only don't work for the public, but they aren't going to really work for the dealers either. It doesn't respond to the real issues changing the car business as we know it today. But if the value of sign is really as high as they are claiming ("We estimate that placement of our sign will increase sales tax revenues to the City from between $350,000 and $500,000 annually"), then they should at least put up their own money for it.

But desperate car dealers would do better to target their efforts at innovative competitive actions instead of looking for public handouts and special exemptions from state and local laws.

Carolyn Chase is a founder of San Diego Earth Works, organizers of Earth Day in Balboa Park. She may be reached at .

Sign of new times Innovation is needed, not sleazy deals for bigger signs. by Carolyn Chase
	group of Mission Valley auto dealers is proposing the city approve a 50-foot high, 33-foot wide, off-premise, freeway-oriented sign north of I-8 and East of I-805 at Mission Rd. This behemoth (at 1650 square feet, it would be bigger than most people's homes) would be designed in the San Diego "mission style" -- which some have observed could also be seen as the "Taco Bell" style. But dealers are promoting it as being "a model of good taste and communication" and "not physically distinguishable" as a billboard. This must be because a lot of people are against billboards. And, it's against state law to put a sign in this location, according to California's Department of Transportation who cites provisions of the Outdoor Advertising Act. This is a drawing of the sign that the Mission Valley auto dealerships want the City of San Diego to put up for them -- for free. They assert that it would be "not physically distinguishable" as a billboard, despite being higher than a 4-story building. Although the phrase "Taco Bell" comes to mind, so does "boondoggle." But never mind that. According to the City Manager's report, the Mission Valley auto dealers say the sign is needed anyway because they believe that "they and the City of San Diego are losing market share in automotive sales to other car dealerships within surrounding cities." In his letter to the Land Use and Housing Committee, John Hine Jr., President of John Hine Pontiac Mazda Dodge, stated, "I am convinced that proper signage would immediately increase our sales tax revenues." In an interesting rationale for a business owner, Hine further asks, "Why should dealers in Mission Valley be denied this opportunity to contribute to the San Diego's tax base?" Taking Mr. Hines stated desire to contribute to that tax base at face value, I decided to find out who owned the property and what the dealers were offering to pay in rent for placing this sign. How much is this sign really worth to them on a month-to-month basis in terms of costs? It turns out that the owner is the City of San Diego. The dealers proposal? The City should not only allow the sign for free, but also pay the estimated $100,000 cost of the sign and then "pay themselves back" from the alleged increased sales tax the City would get. So much for taking things at face value. And if sales taxes don't increase, then what? The public should get stuck with the bill? Do they think the City is stupid, or merely corruptible?
E-liminating the middle man
	I would counter with the question, what exactly makes them think that their potential customers aren't asking themselves the more normal business question, "Why should I contribute to San Diego's tax base by buying a car off a lot, when I can comparison shop from the comfort of my own home?" We may be test driving at dealers, but more and more people are pricing and buying on-line. Increased signage is only one factor in any retail business. If the marketplace is any guide, what consumers are really turning to are smaller, more useful virtual signs. The technological trend toward miniaturization is finally showing up somewhere in land use. We will all need less space in which to shop. If, as the City and developers would have us believe, that industrial and commercial land is "scarce," then expect to see car lots as one of the largest sources of "new" land for redevelopment. In the space of only three years -- less time than it takes to plan and build one suburban mega-mall -- almost 13 million additional consumer households will have become electronic shoppers, with another 21 million projected to join them by the end of 2002. While businesses seek traditional responses like bigger signs, these responses are tantamount to screaming louder in an ever-increasing wind. Bigger signs aren't gonna do it for car dealers. Their fundamental business is changing out from under them. Some will adapt, some won't. Two leading research firms, Jupiter Communications and Forrester Research, predict huge increases in e-commerce spending. Jupiter forecasts on-line spending growth to reach $41.1 billion by 2002 in the business-to-consumer market, very crucial to traditional retailers. Forrester's 2002 forecast for business-to-business e-commerce is in excess of $350 billion. According to studies by Pepperdine's business school, "One class of commerce feeling the effects of this new paradigm is the traditional car dealership. California Internet companies Autoweb.com and Auto-by-tel.com, just two of a handful of leading comparison shopping sites for car buyers, have given consumers the upper hand in negotiating the purchase or lease of a new vehicle. Dealers, already feeling the effects of the newly empowered and informed consumer, are scrambling to adjust. Forrester predicts that the Internet will influence 8 million US auto-purchasing decisions in 2003. "Indicators and analysts both suggest that this is only the beginning phase of a rapidly growing new center of commerce. The benefits of electronic shopping are significant to consumers and continue to expand. Wider selection, 24-hour access, deeper discounts, and extensive product information are all available in the comfort of one's own home." Why take the chance of fighting traffic? Why be traffic?? More and more people are figuring this out.
Driving the point home
	The L.A. Times has reported: "Developers of the hundreds of new movie theaters, coffeehouses, performing arts centers, chain bookstores and retail strips say they are catering to a psychological barrier that makes people reluctant to drive more than 20 minutes for anything," and "the circle of drive time is getting tighter. You can't get as far in 15 minutes as you used to," and "builders, businesses and cultural institutions are worrying more and more about convenience, particularly as consumers complain about their lack of free time." They should be worrying. The pursuit of happiness is not unalterably wedded to the pursuit of driving and shopping. Before people had cars, they had delivery services. The senior boom is also driving this return to high-service deliveries. Most everything used to be delivered before point-of-sale retail shopping started to be promoted as merely a thing to do. Amusement attractions aside, shopping is not really a social activity and more and more people will come to understand that as they have the ability to save time and afford deliveries. As columnist Norman Ornstein puts it, "Internet shopping has accelerated astonishingly, and it's not hard to understand why. You don't have to look for a parking space, look all over a store, deal with surly or ignorant clerks, or wait in long checkout lines. And one other big plus: you don't have to pay any sales taxes." At least, not yet. This unfortunate Mission Valley proposal is only one small outward sign of economic changes that will rock our traditional tax and land use processes. Upcoming proposals for taxing e-commerce will provide the ultimate political showdown over sales taxes. According to published reports, the dealers requested a delay from a decision by the City Council recently, "to make this work for everybody." The item is currently scheduled to return for a decision on November 30th. While they are to be commended for their evident desire to improve their proposal, bigger signs at taxpayers expense not only don't work for the public, but they aren't going to really work for the dealers either. It doesn't respond to the real issues changing the car business as we know it today. But if the value of sign is really as high as they are claiming ("We estimate that placement of our sign will increase sales tax revenues to the City from between $350,000 and $500,000 annually"), then they should at least put up their own money for it. But desperate car dealers would do better to target their efforts at innovative competitive actions instead of looking for public handouts and special exemptions from state and local laws.
Carolyn Chase is a founder of San Diego Earth Works, organizers of Earth Day in Balboa Park. She may be reached at .