NewRoads Automotive Group CEO Michael Croxon wanted to begin construction of a new auto mall in the Greater Toronto Area this spring — the biggest project in the company’s 58-year history. But the project is now on indefinite hold because of a combination of COVID-19, the resulting shift toward digital retailing, the transition to electric vehicles and, more recently, the soaring costs of construction.
It was to be a relatively straight-forward project in the town of East Gwillimbury, 55 kilometres north of downtown Toronto.
“The demographics and the growth completely support dealerships being in that location,” Croxon said. “Whether the original vision is realized depends on a number of factors, some of which are beyond my control.”
Monte Weis, chair of the Toronto-based Weis Group, which specializes in dealership architecture and design, said the cost of building a store has risen 15 per cent to 20 per cent because of pandemic-related supply shortages.
Even when COVID subsides and the economy returns to some form of normal, Weis said, the prices won’t return to pre-pandemic levels.
“There might be a slight correction,” he said “But because there is such a demand and interest rates are so low, it’s still cheap money for people to build even if it’s a significant increase.”
NewRoads, which operates seven dealerships in York Region, announced the project in January 2020 with the intention of building five stores and an option to add two more.
Croxon said the project was conceived when he realized he needed new locations for his Chrysler-Dodge-Jeep-Ram and Subaru stores in Newmarket, which have expiring leases.
He and partner Rice Commercial Group have an agreement in principle to partner on 28 acres (11 hectares) of vacant land for the auto mall.
A PANDEMIC ‘PAUSE’