A few years ago I was touring a down-and-out portion of City X (it doesnâ€™t really matterâ€”could be any city) for the first time, when a colleague of mine made the observation: â€œYou can immediately tell that land values are low here; just look at all these used car dealerships!â€Â I concurred without saying anything; I didnâ€™t need to.Â It seemed like a truism.Â Of course this area was low-rent.Â It had bombed-out factories, a trash-clogged creek, the occasional boarded-up house, and retail that is generally not associated with anything but poor neighborhoods.Â But where did those used car lots fit in?
Iâ€™ve since thought about her observation in a number of urban environments that I have visited, large and small, andâ€”no surpriseâ€”this correlation plays out everywhere.Â But the statement needs refinement: not every used car dealership automatically signals depressed real estate.Â Specifically, the mom-and-pop, unlicensed dealers not tethered to a regionally known last name offer the best examples of cheap land: in other words, the polar opposite of Hubler or Ray Skillman or Pedigo.Â These dealerships typically look more like this:
Typically these dealerships rest on an important street but not necessarily a major arterial like a state highway (those go for the Hublers and Pedigos).Â The mom-and-pops often feature the ownersâ€™ initials as part of the establishmentâ€™s name.Â Prices are nearly always painted on the cars windshields, and rarely (if ever) are they in the five digits.Â And usually their inventories are much, much smaller than a licensed dealership, averaging only a few dozen vehicles on display.Â I must confess that I have never patronized one of these businesses, so Iâ€™m speculating here, but I would assume they donâ€™t involve a great deal of finance options, if any.Â I suspect there are few options for legal recompense if the purchaser finds within a week that he or she has bought a lemon.Â Itâ€™s possible that many of these places expect payment in cash.Â In short, they cater typically to clientele whose credit and income are likely to prevent them from financing a car.Â These cars have sifted their way down to these dealerships and may just be a few thousand miles away on the odometer from the junkyard.
So it isnâ€™t a particularly bold statement to suggest that small used dealerships flourish in low-income neighborhoods.Â Aside from the fact that they are more likely to locate close to their demographic base, these dealerships need cheap land to operate.Â Obviously they require more space than a convenience store or a tax filing service in order to run the business; their inventory occupies a parking lot.Â And since the inventory is already significantly devalued, the best way to guarantee a secure profit margin is to operate on land where the per square foot costs are rock bottom.
Many of Indyâ€™s heavily transitional neighborhoods in Center Township are chock full of these mom-and-pop used car dealerships.Â In fact, the photo above depicts a car lot that many readers here will likely recognize: on Virginia Avenue, just a long block away from the heart of Fountain Square.Â This neighborhood, predating the automobile and even the interurban, no doubt previously accommodated other land uses where these car lots now exist.Â While we can pine for what might have beenâ€”the low-rise commercial and residential buildings that stood here a generation agoâ€”we can also anticipate what the future holds, particularly in the long-undervalued sites that would be easiest to develop with infill.Â Thus, I present to our readers a montage of development sites with high potential across neighborhoods represented by Southeast Neighborhood Redevelopment CDC, better known as SEND.Â The agency focuses on revitalizing a broad enough district to the immediate southeast of downtown Indianapolis (indicated in this map) that it would take me days to chronicle every single used car lot.Â Instead, I have focused on the ones primarily in four neighborhoods: Fountain Square, Holy Rosary, Fletcher Place, and Bates-Hendricksâ€”neighborhoods which are already experiencing varying degrees of revitalization (some quite far along). Â The mom-and-pop used car lot was borne out of low land values in the area; they represent some of the best opportunities at infill as those values rise again over time.
The first photo in the series represents an excellent start point: right near the hub where Virginia Avenue, Shelby Street, and Prospect Avenue all meet.Â First venture eastward along Prospect; just beyond the edge of Fountain Squareâ€™s restaurants and music venues is a fire station, and immediately to its east sits the first used car lot.
Just a block or so further, again on the north side of Prospect Avenue at 1324, sits another.
And a block further, at 1452, is a third:
All three of these lots cluster on a stretch of Prospect before the approach of State Avenue, the next major intersection.Â The last of the three abuts a gas station, which will always prove a costlier redevelopment opportunity, but 1452 on its own could easily host a denser land use.
And for those who doubt the viability of extending the activity level of Fountain Square this far eastward, bear in mind that the easternmost of these three lots sits more or less across the street from the long-successful Santorini Greek Kitchen.
Proceeding along Virginia Avenue from Fountain Squareâ€™s heart, we can easily see land market economics playing out predictably.Â The aforementioned site of A&M Autoâ€”
–sits at the intersection of Virginia and Woodlawn, a prime spot.Â A quick check on Google Streetview indicates that the dealership has changed hands since July 2009 (the date of the Streetview photos), which suggests a certain level of liquidity that probably wasnâ€™t there 20 years ago, when Fountain Square was an economically stagnant neighborhood.
A block further along Virginia reveals a used car lot that is very much in a state of transition:
Coopâ€™s was in operation at the time of Google Streetview, but not anymore.Â The current owner of the property recently sought to build a gas station on the site, which the C-5 zoning classification would allow.Â Urban Indy covered this mild controversy a few months ago, when the proposal first reached the Indianapolis Historic Preservation Commission (IHPC).Â Due to overwhelming neighborhood opposition on the prospect of a gas station fronting the Cultural Trail, the developer shelved the plans, and further proposals are forthcoming.
Continuing down Virginia across the interstate reveals another vacant used car lot on the edge of Fletcher Place:
Advance Auto Sales is also no longer in operation.Â It was for sale three years ago, as indicated from Google Streetview; recent photos reveal the sign has been removed.Â It doesnâ€™t take a brain surgeon to conclude that the desirability of this leg of Virginia Avenue has increased to the point that the owners of these used car lots have determined that selling their property is a more profitable venture than retaining a business that buys and sells vehicles for less than one grand.Â Property taxes and other carrying along Virginia Avenue may have risen to the point that running a used car lot no longer makes sense as a business model; Coops and Advance Auto Sales could easily have found depressed real estate in another part of town to continue their operations.
At about this point, Virginia intersects with College Avenue, which proceeds into the heart of the Fletcher Place neighborhood.Â Continue two blocks northward, and look at the northeast corner at the intersection of College and Fletcher Avenue:
Another used car lot, right next to the neighborhood institution, Iariaâ€™s.
Returning to Virginia Avenue, near the busy intersection of Virginia, Fletcher, South and East Streets sits a final, inconspicuous car lot:
This one, Members Auto Source, LLC, appears to be a slightly different operationâ€”more of an automobile brokerage firm.Â Â It promotes its proximity to the Lilly Corporate Center, so it will be interesting to see if the company remains on this tiny parcel as land values inevitably rise over the next few years.
Turning southward on East Street then crossing I-70, the Bates-Hendricks neighborhood offers a huge array of used car lots.Â Iâ€™m including the most prominent ones with the greatest opportunity for redevelopment, and the East Street intersection with Prospect Avenue and Morris Street provides an unlikely cluster.Â The first sits at the northeast corner of East and Prospect:
Immediately to the south of it, on the southeast corner of that same intersection, sits another.
Directly abutting that lot and again to the south (on the east side of East Street) is a third:
And, separated only by an alley, a fourth lot sits immediately to the south, looking particularly underutilized:
Standing at the southwest corner of Morris Street and looking in a northeastward direction, it is easy to see the four used car lots lined up in succession along East Street.
But my favorite is the lot at the southeast corner of Morris and East, where I was standing for the previous photo:
The dealer at this tiny parcel only has room for about twenty cars.
My suspicion is that many of the used car lots on Virginia Avenue will transform to infill development within the next five years; the parcels in Bates-Hendricks will probably take longer.Â While most of these lots were born out of the economic decline of their respective neighborhoods, their current conditions (as well as their assessed value) will owe a lot to successive speculations between buyer and seller.Â It is likely that Bates-Hendricks (and possibly Fountain Square) will remain the home of a demographic that depends on the prices that these dealers offer.Â While I have my suspicions that the unlicensed used car dealership business as a whole encourages some predatory practices, I also expect that broad generalizations are equally unfair.Â Keep an eye out for these parcels over the next few years; more of them are likely to change hands, and, with the combination of a visionary developer and a supportive neighborhood network, these could offer infill opportunities that elevate the communities into some of the most active urban neighborhoods in Indy.