Joliet neighbors fight budget car dealership plan

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A special-use permit is being sought to locate a CarHop dealership where Cheli's Restaurant and Pancake House was at 700 W. Jefferson St. in Joliet, as seen Thursday, Jan. 26, 2012. | Matthew Grotto~Sun-Times Media

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Updated: February 28, 2012 8:15AM

JOLIET — The same kind of opposition that has blocked pawn shops and gold stores in Joliet now is aimed at CarHop, a company that sells cars to people with bad credit.

A CarHop representative said the company is facing unique opposition in Joliet that amounts to a a fight over whether its business is good for the community, much like the battles Walmart sometimes faces when opening a new store.

“A lot of people think Walmart customers are too stupid to know that they’re taken advantage of,” said David Grimm, regional development manager for CarHop. “At some point we’re relegated to say we sell an awful lot of cars to an awful lot of people.”

Minnesota-based CarHop has opened more than 50 locations in 13 states, including Illinois, since starting business in 1996.

It wants to open a Joliet location at 700 W. Jefferson St., the site of a closed restaurant. The company would need a special-use permit, which is likely to go to a Joliet Zoning Board of Appeals vote Feb. 16.

Neighbors’ groups

Opponents do not compare CarHop to Walmart. They compare it to pawn shops and gold stores that have been blocked by neighborhood opposition in Joliet during the past year.

“We don’t really approve of the way they do business,” said Carol Ann Heinemann, president of the St. Pat’s Neighborhood Association.

Heinemann called the company’s financing practices “predatory lending.”

CarHop says it charges interest rates of 17 percent to 18 percent. Car prices may be higher than other dealers Grimm said. But the company also uses a warranty program and has other costs associated with bad credit that go into the car price, he said. Ultimately, Grimm said, CarHop helps its customers by getting them into cars and helping them improve their credit rating.

“They seem more interested in making money off of those people,” said Bob Nachtrieb, and officer with the Cathedral Area Preservation Association. CAPA has joined St. Pat’s in opposing the CarHop, which would go into a spot between the neighborhoods.

As the neighborhood groups question CarHop’s motives, Grimm questions theirs. He has met with the St. Pat’s group. And, another CarHop representative met with CAPA.

“There’s a real strong sense of not liking our customer and not wanting our customer in someone’s particular neighborhood,” Grimm said.

Told that Grimm suspected her group wanted to keep bad-credit customers out of the neighborhood, Heinemann said, “That has no bearing at all on the situation.”

Business practices

Members researching CarHop did not like what they found, Heinemann said. She argues that CarHop’s interest rates are higher than what the company claims. And, she said, St. Pat’s residents who made calls to try to buy cars at two Chicago-area CarHops found resistance when they offered to pay cash rather than going through the company’s financing.

“We became opposed to it based on the information gathered,” Heinemann said. “It has nothing to do with the clientele coming into his place.”

Heinemann said the group also questions whether the restaurant site is a good place for the CarHop. She said the company would crowd the lot with more than 40 cars. And, Heinemann said, there are no plans for site improvements.

Grimm said the site is ideal for a CarHop, saying nearly half of the company dealerships are at former restaurant locations. He also said CarHop does not load its locations with attention-getting signs and decorations that other car dealers use.

“We don’t do streamers and flags, and we don’t light it up so you can see it from space,” he said. “We’re not going to change that building one iota.”

Grimm said CarHop doesn’t consider itself to be mainly a used-car business: “Primarily, we’re put in place to help people who have credit issues.”