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Staff photo by Mike Pare / Kelly Subaru on Riverfront Parkway is among auto dealerships taking new actions as it continues to sell vehicles amid the COVID-19 crisis.

Chattanooga mayoral candidate Tim Kelly is selling his family's automobile dealership that has been a fixture of Chattanooga's Westside for 49 years.

Crown Automotive Group, a regional chain of 21 automobile dealerships in Florida, Ohio and Tennessee, is buying Kelly Subaru as it continues to expand Crown's automobile retail business in the Southeast. The proposed purchase, which is scheduled to be completed next week, will be the first Subaru franchise for Crown Automotive and the third local dealership in the Chattanooga market following Crown's takeover of the Chrysler franchises in Chattanooga and Cleveland over the past decade.

Jim Myers, president of the St. Petersburg, Florida-based Crown Automotive Group, said Crown tries to expand in growing markets where people like to live such as Chattanooga. In looking for more dealership opportunities in Tennessee, Myers said "we liked the management, staff and market approach Tim applied at the dealership.

"Subaru enjoys a very strong reputation and Tim and his team have done a great job in building customer trust and confidence," Myers said.

The new owners plan to keep the 54-employee staff at Kelly Subaru under the leadership of General Manager Steve Marlin.

Kelly said the sale of the Subaru dealership he helped build in Chattanooga since 1988 "is bittersweet" and ends an 85-year history of automobile dealerships by his family dating back to when his grandfather bought the former Ayers Motors in Chattanooga as a General Motors dealership.

Kelly, who announced in May he in running to become Chattanooga's next mayor in the city elections in March, said the sale "is a natural segue to the next chapter of my life in public service."

Kelly said he believes now is a good time to sell the dealership, noting that Crown is paying a richer price to buy the company assets than another dealership offered a year ago when he first began negotiating the sale of the business before he even launched his mayoral bid. That sale was held up by the pandemic, but ultimately auto sales, especially for Subaru, have increased during the pandemic.

When Kelly brought the first Subaru dealership to Southeast Tennessee in 1988, he said only a dozen cars were sold in a typical month. But the dealership expects to sell more than 1,000 vehicles this year, Kelly said.

Kelly will retain ownership of the 2.9-acre site of Kelly Subaru site at M.L. King Boulevard and Riverfront Parkway, which Kelly first developed as a Cadillac dealership in 1971. Terms of the sale were not disclosed.

Kelly, a 53-year-old businessman, continues to own Southern Honda Powersports, the largest Honda motorcycle dealer in Tennessee. Kelly also remains chairman of the Chattanooga Football Club.

Although Kelly says he "was never a car guy," he says his dealership taught him the value of listening and serving customers — assets he says he is bringing to his campaign for mayor.

"As I continue to move toward a chapter of public service, one of the most valuable lessons I've learned is applying business principles that promote accountability, commitment to excellence and integrity in every transaction," he said.

Kelly' said his dealerships have generated more than $36 million in state and local sales taxes over the last 20 years and the business donated over $1 million to local charities. Kelly Subaru was recently honored with the "Torch Award" for ethical business practices by the Better Business Bureau of Chattanooga.

The Crown Automotive Group, one of the top 100 automobile retailers in the country, entered the Chattanooga market in January 2011 by acquiring the Chrysler franchise in Chattanooga formerly held by Joe Prebul, who declared bankruptcy in 2009 after being charged with wire fraud and losing the Chrysler franchise. In 2012, Crown Automotive bought the former Kyle Chrysler dealership in Cleveland, Tennessee.

In early 2021, Crown is moving into a new $10 million-plus Chrysler and Jeep dealership at Exit 20 that will include a test track where motorists can test out a rock crawl and other features.

"We've really enjoyed being in the Hamilton and Bradley county markets, which are not only great places to live but growth markets for auto sales," Myers said. "As an outdoor-oriented community, it's well suited for Subaru and in the future, we'd love to grow even more in the Chattanooga market with other dealerships."

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

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