By Gigi Wood

A flooded property in Coralville will be an auto dealership once again.

McGrath Auto of Cedar Rapids is opening a used car superstore in Coralville, in the former location of the McGurk Meyers Motors, 404 Second St., along the Coralville strip.

“I think Pat McGrath has a great reputation and a good business model and to put that property back to use for what it was originally designed for, I think is a great thing,” said Kelly Hayworth, Coralville’s city administrator. “To have one more flood property back in use is just outstanding. That’s a hole in the (Coralville) strip that was important to fill.”

McGrath Auto operates Pat McGrath Chevyland, Pat McGrath Dodge Country, Westdale Used Car Superstore and Marion Used Car Superstore, selling and servicing Dodge, Chevrolet, Chrysler and Jeep vehicles. The group also owns McGrath Powersports, which has Yamaha, Kawasaki, Honda and Polaris motorcycles, watercrafts and ATVs.

Pat McGrath, co-owner of McGrath Auto, said the used car superstore concept has been successful for the dealer and that he had his eye on the Coralville/North Liberty market.
“We looked at the Coralville/North Liberty market and saw a real void in that market of a good quality used car retailer,” said Mr. McGrath, who was a car dealer in Iowa City from 1987-1996 with Pat McGrath Oldsmobile GMC Isuzu. He opened Pat McGrath Chevyland in 1991. The McGrath family has been in the automotive business since 1952.

The dealership property

Future flooding at the site is not a concern, he said.

“I have confidence in the city of Coralville and the flood mitigation work they’ve done on that creek. I’ve talked to Kelly Hayworth and talked to Josh Schamberger (president of the Iowa City/Coralville Area Convention & Visitors Bureau). I couldn’t make the meeting (earlier this year) at Iowa River Power Co. about flood mitigation. But somebody went in my place and said, ‘Coralville’s really done their homework and has a great flood mitigation plan.’ So I’m not concerned about it.”

A flood wall and pump station were constructed adjacent to the property after the 1993 flood. Since the 2008 flood, Coralville has filled a gap in the flood wall. The city also added a duckbill valve to the stormwater sewer opening in front of the property. The valve will help control the flow and pressure of water through the stormwater sewer system.
Next week, the city plans to approve bids for work that will protect the north side of the highway.

“We’ve got that property protected from clear creek but it could come out and around from the north side of the highway because there’s a low spot on highway 6,” Mr. Hayworth said. “That will get the work done that will protect both the north side and the south side of Highway 6 west of Clear Creek. That’s the other key is, we’ve got a little more work to do and we’re going to work on that and get it going.”

The Coralville Used Car Superstore is expected to open the first week of November. Meanwhile, contractors are working on renovation of the building, replacing windows, flooring, lights, insulation, restrooms and reconfiguring offices and showroom space. The building’s exterior will be replaced, as will the overhead doors to the service area.
“The showroom windows were single-pane windows with no insulation above them,” he said. “So we’re going with double-paned, a lot more energy efficient windows, insulation. That’s one reason why we’re tearing the ceiling out. The insulation in there was minimal at best. We want to make it a lot more energy efficient.”

Initially, 18 people will work at the superstore, including Murphy McGrath, Pat McGrath’s great-nephew, who manages the Marion Used Car Superstore and will run the Coralville location. A few managers and salespeople will be moved from McGrath locations in Linn County to the Coralville.

“And we have five salespeople who are going to go down who live in that area,” Pat McGrath said. “We just started to put out feelers to hire people in that area.”
The employee shuffle will open up new positions at McGrath locations in Linn County, as well.

“This really gives us the opportunity to grow our people,” he said. “That’s what is really exciting for us. Murphy is going down there, well that leaves an opening in the company for us to fill Murphy’s job; we’re all about promoting from within … It’s really neat growth. It’s really neat to see the growth happen and people being able to see growth in our company and move up in our company. That’s probably the most exciting thing about it for me.”

The Coralville/North Liberty market

The local car dealership market has changed drastically during the past few years, with many dealerships along Highway 1, Iowa City’s auto row, changing hands or being bought out by large, out-of-state volume dealers.

Mr. McGrath said those changes did not play a part in his company’s decision to open a dealership in Coralville.

“We just looked at how much Coralville and North Liberty are growing like crazy and we just looked at that market and thought there’s a real need for a professional used car store,” he said.

Opening the Coralville location is part of McGrath’s overall expansion. Its Marion superstore opened in October.

“Our goal was to do another superstore and we had our eyes on that Coralville/North Liberty market,” Mr. McGrath said. “So we said, ‘let’s see if we can do one in the next 12 months’ and it’s going to happen pretty close to on time. We really like the superstore concept and our customers really like it.”

McGrath Auto would have preferred a location closer to the Coral Ridge Mall but selected the Second Street location after learning the street’s traffic count.

“Our research shows there’re 28,000 cars that drive by that location a day. That is higher than any one of our four locations up here in Cedar Rapids,” he said. “Gosh, would we have loved to be next to Coral Ridge, holy cow, who wouldn’t? But the costs are so high. Or across the highway by the Walmart and where the new Costco is going in, it’s prohibitive. We would have to charge so much for our cars we wouldn’t be competitive.”

The superstore concept

According to the National Automobile Dealers Association, used-vehicle sales increased 21 percent in 2010, while new vehicle sales increased 19 percent. Mr. McGrath said his business has seen a higher demand for used vehicles since the recession hit.

“The economy has really boosted the need for used vehicles,” he said. “But all around, I think most dealers would agree that business has been good. It’s been a very good new car year; last year was good as well. But the need for, the demand for used cars is definitely higher because of the cost to the consumer is less.”

The Coralville superstore will operate similarly to those in the Cedar Rapids area, he said.

“The inventory mix may be a little different because the import market share down there (Iowa City area) is higher than up in Cedar Rapids, where it’s a little more dominated by domestic,” Mr. McGrath said. “The mix will be a little different but the processes and procedures we have in place in Marion and Westdale will be carried down and be done at the Coralville location.”

The volume will also be higher than other used car dealerships in Johnson County, he said.

“We plan on having a selection of 150 units in stock down there. Plus that store will have the opportunity to get any inventory we have up in Cedar Rapids,” Mr. McGrath said. “The total will be well over 1,200 used vehicles, so the selection will be really bigger than anybody. With our extended inventory in Cedar Rapids and Marion, that Coralville location will have the ability of really more inventory than anybody down there, let alone some of the used car operators.”

The superstore will also accept almost any trade-in vehicle, regardless of the condition or age, he said.

“We won’t take firearms and spouses, that’s one thing I always kid about,” Mr. McGrath said. “Older cars we’re not shy of; we’ll take any vehicle, even if it’s not running and we have to take a tow truck. We have an avenue to dispose of them and to me that person has a real need if they have a vehicle like that. And they have a real need for a nicer, newer vehicle, but they have a real need for how to get rid of it. We have a couple different avenues for how to get rid of it.”

The company employs 55 mechanical technicians who recondition trade-ins. In November, the Coralville superstore will begin detailing and cleaning cars. After the first of the year, technicians will be hired and brought down from Cedar Rapids to recondition vehicles in Coralville. For now, vehicles sold at the Coralville location will be reconditioned in Linn County.

“These are highly qualified technicians and we inspect our vehicles well,” he said. “It’s a machine, it’s a motor vehicle, they’re not perfect but the level of quality will be high.”

McGurk Meyers Motors

This newest development is another twist, albeit a positive one, in the long tale of McGurk Meyers Motors. The dealership property is two doors east of Mondo’s Sports Café and located along Clear Creek, which swelled during the 2008 floods. At the time of the flood, employees took boats down Highway 6 to salvage equipment and parts from the dealership before floodwaters overtook the building. They moved 150 cars off site in half a day. Then, overnight, vandals damaged the remaining vehicles on the McGurk lot.

The dealership moved to a temporary location at 4165 Naples Ave. in Iowa City while it worked to receive insurance proceeds for its flood loss and find a new insurance policy. The business also remodeled the flooded building and renewed its franchise with Chrysler.

After the dealer returned to Coralville and added $900,000 of vehicles to its inventory, it learned that Chrysler would yank its franchise due to the automaker’s bankruptcy troubles. McGurk Meyers tried to make a go of it by selling used cars, mopeds and all-terrain vehicles. Business dried up and the dealership closed about a year ago. The building has been sitting vacant since.