Is the auto mall going extinct?*

Two of the most prized possessions for a California city are a big box store and an auto dealership. Many a redevelopment-agency loan was made to first attract and then keep these revenue generators in town.

But the economic downturn has sucked the life out of many big box stores, and sent a few into bankruptcy. But worse for cities is the loss of dealerships, which generate the sales tax needed to keep city services going. So the news out today that ailing GM and bankrupt Chrysler will eliminate hundreds more dealerships is staggering.

Chrysler told a bankruptcy court it plans to close 789 dealerships nationwide; GM is expected to close as many as 2,600. Already California has lost 145 dealerships and it's not clear exactly how many more will go. The LA Times reports:

Throughout the state, local governments are struggling to keep their auto dealerships alive, because most have become reliant on the big-ticket sellers to provide a steady stream of sales tax income.

Since Proposition 13 limited California property taxes in 1978, many cities have encouraged the construction of malls and other retail uses that bring in sales taxes to fund the municipal budget.

Car dealerships are now among the biggest generators of tax revenue.

*Update: Three San Fernando Valley dealerships are on the chopping block, the Daily News reports.

Obama to grant California auto emission waiver

The New York Times reports that President Barack Obama will move to grant California's request for a waiver to implement the toughest restrictions on automobile tailpipe emissions in the nation. Thirteen other states have since adopted the same law. Together they account for half the market for autos. From the NYT:

The California law, which was originally meant to take effect in the 2009 model year, requires automakers to cut emissions by nearly a third by 2016, four years ahead of the federal timetable. The result would be an increase in fuel efficiency in the American car and light truck fleet to roughly 35 miles per gallon from the current average of 27.

Meanwhile, in Detroit

General Motors has a plan to save money that looks awfully familiar. From the Washington Post:

Struggling auto giant General Motors announced a number of sweeping measures this morning designed to raise cash and stay in business through 2009, including cutting an unspecified number of white-collar jobs, eliminating health-care benefits for retirees 65 and older, the possible sale of some of its model lines and the immediate suspension of dividend payments for investors.