By Leon Worden/SCVNEWS.com

Santa Clarita officials are considering tightening the rules that ban auto repair shops from Newhall’s revitalized Main Street, after one such shop took a quarter-million dollars from the city to move away and then exploited a loophole in the city code book to move right across the street.

In November 2009 the city purchased an entire block on the east side of Main Street between 9th Street and Lyons as it began to implement the Downtown Newhall Specific Plan. The plan calls for a mix of two-, three- and four-story buildings with ground-floor shops and upstairs apartments and offices.

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Current city codes prohibit the types of businesses that would impede that vision of a pedestrian-oriented shopping, dining and entertainment corridor. Banned from the five blocks of Main Street are auto shops, big-box stores, medical clinics, print shops, movie sound stages, drive-through restaurants and other businesses that interfere with a window-shopping and outdoor patio dining experience, and which require mid-block driveways that pose hazards for foot traffic.

The Downtown Newhall Specific Plan calls out auto repair shops in particular, saying they “yield relatively low levels of retail sales and also blight pedestrian-intensive environments.”

Auto shops represented more than 20 percent of the businesses in downtown Newhall when the specific plan was adopted in 2005. Since that time, several have left the area, such as CarQuest, which stood in the way of the Old Town Newhall Library – another component of the specific plan. The city purchased the CarQuest property and demolished the building.

Most of Newhall’s auto repair shops are leaseholders. By law, existing auto repair shops with an active lease can’t be forced out, but city codes prohibit downtown property owners from renting to new ones – except in one instance.

If a downtown Newhall auto repair shop – or any other business on the “banned” list – shuts down or moves away, a new one can replace it in the same location within 180 days. If a shop building is vacant longer than 180 days, the property owner must find a different type of tenant.

When the city’s redevelopment agency bought the block in 2009, it became the landlord to three auto repair shops. In March 2011 the redevelopment agency reached an out-of-court settlement with two of the three shop owners to quash their leases in exchange for $530,338. Automotive Technology received $255,000 and $275,338 went to Wanjon Autobody Inc.

The city has yet to reach agreement with the third shop, Insurance Auto Collision Center at the corner of Lyons and Main. In May 2010 the owner exercised an option to renew his lease through April 2015.

Wanjon received its payments in March and April and shut down.

Rather than leave the area, Automotive Technology got its check for $255,000 in April and moved directly across Main Street to a space previously occupied by S&W Cycle Service and Repair (and before that, by Winston Tires. The building is for sale.)

The move was legal because the space had been vacant for less than 180 days.

City officials plan to plug that loophole.

“We are working to amend our code to change the time period from 180 days to 30 days to remove the legal non-conforming land use designation,” city spokeswoman Gail Ortiz said.