But as local and national trends suggest, times are changing. Buyers are turning to the Internet, auto rows are replacing hometown auto dealers and auto manufacturers are encouraging expensive, multi-story remodels.

In Los Gatos, the town witnessed these changing times when Swanson Ford, a business that operated in town since 1938, closed March 12. Los Gatos Auto Mall closed after an explosion in 2005, and Hummer is headed to the auto row in Milpitas.

But instead of waiting for more dealers to close down or leave, the Los Gatos Town Council is hoping to keep the five remaining auto dealers in town: Bentley of Silicon Valley, Los Gatos Acura, Los Gatos Chevrolet, Moore GMC Truck, Pontiac, Buick and South Bay Honda. What's more, instead of seeing empty lots developed for residential or retail uses, the town wants to attract new dealers, though this is a feat some dealers told the council at a study session on March 16 that it is unlikely.

"It's going to be real difficult to get a dealer to relocate to Los Gatos," said John Moore, dealer and property owner of Moore GMC Truck, Pontiac, Buick. He speculates the high price of land in town is a major factor.

Council members were first asked to consider a resolution encouraging the retention of auto dealers on March 6. It stated property owners had to go through a planned development process should they want to convert the property for a use other than an auto dealership.

However, for property owners such as father-son team Robert and Bruce Swanson--who say they are running out of money, have not able to find an auto dealer to sign a lease, and hope to turn their piece of land into profit--the resolution presented another financial hurdle to jump over.

Property owners and dealers told the council on March 16 they did not want them to take any action on the resolution. For the moment, property owners can breathe a sigh of relief--until the next meeting on April 17. Then, the council will listen to input from staff and vote on whether to amend the process for redevelopment of auto dealership sites.

Some dealers say business in town is fine. Dave Moeller, partner of South Bay Honda, wrote a letter to the town showing his support of the proposed resolution, stating Los Gatos is a "very viable place to sell automobiles." David Spencer, who operates Los Gatos Chevrolet, agrees. Meanwhile, Bud Lortz, director of community development for the town, said Bentley of Silicon Valley is looking for yet another location in town. It currently has two 10,000-square-foot locations on E. Main Street.

Other dealers, however, say business is not what it could be in town, attributing it to not only high rents, but also the "10-mile rule." This generally prevents auto manufacturers from operating within 10 air miles of one another, although exceptions are sometimes granted. Moore added he has seen auto sales drop. In 2001, the dealership sold 1,108 new and used cars, and in 2005 it sold 765.

The auto dealerships generated 23 percent, or $1.7 million, of the town's total sales tax revenue in 2005. As the council and staff in Los Gatos work hard to ensure that the auto business in town remains viable, nearby cities have been doing so as well.

Sunnyvale, which has 12 dealerships that contribute $3 million to the city's budget, has been holding round-table discussions since 2004 with dealers to find out what they need, and how the city can help, said John Pilger, the city's communications director.

"We've seen some shift in the auto industry, but we haven't had a lot of them moving out of the city," Pilger said. "We have a very active and successful auto row on El Camino in Sunnyvale, and I think part of it is we work very hard to be business-friendly."

Meanwhile, in Palo Alto, the city staff is working to move some of its dealerships, which are scattered throughout the city, to the frontage road on Highway 101 so they get freeway visibility, said economic development manager Susan Arpan. There are eight dealerships in Palo Alto, and they contribute close to $2 million to the city's budget.

"We have to help them to be competitive in the marketplace," Arpan said, noting one dealer moved recently and another one closed.

Arpan said the city has been working with the dealers the past eight years, trying to find ways to improve their relationship.

"We are trying to be as proactive as we can, but there are some challenges: Land is expensive, and the market is constantly changing," Arpan said.

One thing Palo Alto has done to help its auto dealers is to offer some protection from high rents and relaxed signage requirements. These types of incentives, along with a streamlined permit process, is something Los Gatos will consider."I think that auto dealers were a hard sell for a while. People saw them as big open lots with gorillas flying. But today, they are a big part of our local economy," Arpan said.

The Los Gatos staff report estimated that if the Auto Mall was converted to retail space and Swanson Ford converted to retail, office and residential use, it would result in an increase of 685 daily vehicle trips and a yearly loss of $430,000 in revenue to the town.

Though the council took no action at the study session, some council members indicated that they are leaning toward alternative No. 2 of the original resolution. The alternative expresses support for the town's auto dealerships and states that land use changes would be reviewed carefully by the town. It would not make changes to existing requirements and processes.

"When I first read the resolution, it appeared that staff is trying to protect the town and its best interest. Having heard very informed testimony, I would be in support of alternative No. 2," Councilman Steve Glickman said.

Mayor Diane McNutt asked Moore what he thought of option No. 2, to which he replied, "On the surface, it doesn't sound too bad. I just don't feel, as a property owner, our property use can be limited to auto dealers."

Robert James Swanson, however, said that he would not support the council's decision if it voted for resolution No. 2.

"You open the door, and when does it stop? You need to go back to no action," Swanson said.

The council will meet next on the issue at 7 p.m. on April 17 at 110 E. Main St. in the Los Gatos Town Council chambers.

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